Organizational Objectives

The Importance of objectives Give businesses a sense of direction, purpose and unity Form the foundation of business decision making Help to encourage strategic thinking Provide the basis for measuring and controlling the performance of the workforce

Vision statements A vision statement outlines a business’s aspiration in the distant future “To be a leading sports brand in the world” is the vision of Adidas Vision statements relate to attainment of success

Mission statements A mission statement tends to be a simple declaration that broadly states the underlying purpose of an organization. “To be a world class institution in nurturing the holistic development of our students” Clearly defined and realistically achievable Serve to unify all people and corporate cultures within the workforce

Vision & Mission statements Vision statements focus on long term whereas mission statements can focus on the medium or long term Mission statements are updated more frequently than vision statements Vision statements do not have actual targets The mission statement tends to highlight the values of the business

Aims Aims are the general long term goals of an organization. Broadly expressed and unquantifiable statements Example, ‘to promote social and environmental integrity’ Long term aims are usually set by senior directors of a business

Objectives Objectives are short term and more specific goals of an organization, based on aims. For example, for a school ‘to achieve 100% pass are IB examination’ Setting objectives may be delegated to senior or middle management

Short Term vs Long Term Objectives Strategy is any plan or scheme to achieve long term aims of business. Strategy is used for strategic objectives. Tactics are short-term ways that firms can use to achieve their aims and objectives

Short Term vs Long Term Objectives Strategy is any plan or scheme to achieve long term aims of business. Strategy is used for strategic objectives. Tactics are short-term ways that firms can use to achieve their aims and objectives

Levels of Strategy Operational strategies are the day-to-day methods to improve efficiency of an organization Generic strategies are those that affect the business as a whole Corporate strategies are aimed at the strategic objectives (long-term) of an organization.

Tactical Objectives Tactical objectives (operational) are short-term objectives that affect a segment of an organization, such a department Short-term objectives tend to refer to targets set for the next 6-12 months Example, a tactical objective could to maximize sales revenue

Strategic Objectives Strategic objectives or primary objectives refer to long term aims of business organization Examples in next slide

Types of Objectives Profit maximise. Some business try to profit maximise. Growth. Many businesses pursue growth for survival. Increasing shareholder value. Public listed company run the company to increase share price and dividends. Image and reputation Market standing is interlinked with corporate image and reputation of a business. Sales revenue maximization.

The CSR Vineyard You are an analyst with a private equity firm. For the first time, your firm is thinking of investing in a business with ethical objectives. Watch the video to know the company better. Advise your manager whether to invest in this company.

The CSR Vineyard

Ethical Objectives Ethics are moral principles that guide decision-making and strategy. Morals are concerned with what is considered right or wrong from society point of view Ethical objectives may include: - Reducing pollution by using environmental friendly production methods - recycling of waste materials - disposal of waste in an environmental friendly way - Offer staff sufficient rest breaks during their work shift

Ethical Objectives Examples of unethical business behaviour - Financial dishonesty - Environmental neglect - Exploitation of the workforce - Exploitation of suppliers. - Exploitation of consumers.

Ethical Objectives Advantages of ethical behaviour Improved corporate image. Increased customer loyalty Improved staff motivation Improved staff moral

Ways to social responsibility Providing accurate information and labelling Active community work Having consideration for the environment. Adhering to fair employment practices.

Limitations of ethical behaviour Compliance costs. For example, organic products are more expensive. Lower profits. Stakeholder conflict.

Corporate Social Responsibility Socially responsible firms are businesses that act morally towards their stakeholders. Free market CSR attitude. Many economists argue that the role of businesses is to generate profits Altruistic CSR attitude. These businesses do what they can to improve the society Strategic CSR. Business adopt CSR if such actions help them grow.

Social Auditing Socially responsible firms are businesses that act morally towards their stakeholders. Free market CSR attitude. Many economists argue that the role of businesses is to generate profits Altruistic CSR attitude. These businesses do what they can to improve the society Strategic CSR. Business adopt CSR if such actions help them grow.

Changes in Corporate Objectives & Strategy (HL) Internal factors: Corporate culture – norms and customs of a business and its workforce Type and size of organization Age of business – any new business will place break-even and survival as their key objectives Finance Risk profile of key stakeholders Private vs Public organizations

Changes in Corporate Objectives & Strategy (HL) External factors: State of economy – boom or slump Government constraints – rules and regulations Pressure groups – may force business to change through lobbying

Changes in Societal Expectation of Business Behaviour Attitudes towards CSR changes over time. CSR is a subjective issue – what is right or wrong largely based on public opinion Pressure groups affect organisational behaviour. Businesses become more aware of environmental damage