Organizational Objectives

Four Important Questions Where are we now; Where do we want to go How do we get there How do we know we are there? Why To control; to motivate to direct

Importance of Objectives Many groups are interested in business success Stakeholders Groups interested in or affected by the activities of a business Shareholders, employees, the public, etc.

Mission & Vision Statements Vision Statement Outlines the aspirations of a business Mission Statement Simple declaration to broadly state the purpose of an organization Mission statement outlines HOW a vision statement will be achieved

Aims and Objectives Aims – long term; expressed in Mission Stmt. Objectives Short-term, more specific goals of an organization More likely to be quantifiable or measurable Example – to have an exam pass rate of 90% Strategic – medium to long-term objectives Tactical – Medium to short-term objectives Operational – day-to-day objectives

Hierarchy of Objectives Relationship of Goals Aim – General, Vague Objectives – concrete; can be translated into a SMART goal S – specific M – measurable A – Achievable R – Relevant T – Time specific

Need for “Change” Objectives change because of changes in: LeadershipHuman Resources OrganizationProduct FinanceOperations SocialTechnological EconomicEthical PoliticalLegal Ecological

Ethical Objectives Goals based on codes of behavior that allow a business to benefit society or the environment or at least not hurt society while making a profit WHY? Builds customer loyalty Creates a positive image Develops a positive work environment Reduces the risk of legal consequences Satisfies customers high expectations Increases profits

Impact of ethical objectives Affects the business itself Competitors – may have to respond Suppliers Customers Local community Government

Business Ethics Ethics –principles to guide decision making Morals – what is right and wrong Many examples of unethical behavior Advantages of ethical behavior Improved image Increased customer loyalty Cost cutting – recycling; lower litigation costs Improved staff motivation/morale

How can a business be socially responsible? Provide accurate information & labeling Active community work Consideration for the environment Adopt fair employment practices

Limitations to ethical behavior Compliance Costs Lower profits Stakeholder conflict Ethical behavior can be subjective

Ethical objectives and corporate social responsibility CSR The concept that a business has an obligation to operate in a way that has a positive impact on society. A business is seen to act as a good “corporate citizen” Not only obey laws, but act resonsibly and honestly with customers

Corporate Social Responsibility What is a business’ responsibility toward stakeholders and the community? Different views Extent to which a firm acts, dependent on many factors Can be difficult internationally – differing opinions and ethical values

SWOT Analysis SWOT – a business tool to help businesses set objectives First stage in planning process Strengths, Weaknesses, Opportunities, Threats Based on perceptions Only useful when thoughtfully prepared Inner – Strengths; Weaknesses Outer – Opportunities, Threats Example – page 48 = Apple Computers

SWOT analysis and market position Growth strategies Combine strengths w/ market opportunities Defensive strategies Adopted when a business is most vulnerable Re-orientation strategies Used when addressing weaknesses; positive and long-term Defusing strategies Designed to eliminate threats by focusing on strengths

Ansoff Matrix Business tool Looks at growth potential in terms of market and product Considers existing markets & products and new markets & products Four possible growth strategies: Market penetration Product development Market Development Diversification