1. Business Objectives
Chapter 4

2. Chapter Objectives
The nature and significance of business objectives in the private and public sectors
Decision-making and influences on business objectives

3. Business Objectives
4.1

4. Business Objectives An objective is a target
A good objective will state:
what is to be achieved (e.g. an increase in profit)
how much the business wants it to be (e.g. $25 000)
when it wants this done by (e.g. three years)

5. Business Objectives This means a good objective should be:
specific in terms of what the target is
quantifiable (measurable)
time specific in terms of when it should be completed

6. Business Objectives A business will have an overall objective
Such as doubling profits within 5 years
Managers will then set departmental targets
Such as the marketing department increasing sales by 40% over an agreed period
The operations management department reducing costs by 20% of the next three years
The human resources department increasing labor productivity by 8% over the same time period
Each individual should also have their own objective

7. Business Objectives Corporate objectives Apply to the entire business
Examples include:
Growth
Expansion
Overall sales objectives

8. Case study: Tesco’s growth objective takes it to Turkey
Explain how the Tesco employees responsible for its marketing might help the company to achieve its objective of growth in Turkey.
Discuss the extent to which Tesco benefits from its clearly stated business objectives.

9. Corporate Social Responsibility as a Business Objective
A business may have many objectives relating to different areas
Example, it may want to boost profits but at the same time be aware of the impact on society and the environment
All countries have different laws on how a business should conduct itself within their borders
Minimum wage
Age
Environmental protections

10. Corporate Social Responsibility
Accepting obligations to society over and above the legal minimum
What do you think this means?

11. Corporate Social Responsibility
For example, a business may:
believe it should ensure that work is interesting and that employees have a good career path within the organization
believe it has a responsibility to keep people in work as much as possible and therefore be reluctant to force anyone to leave the business
believe that it is important to pay suppliers quickly rather than taking as long as possible and holding on to the money
believe that it should invest in its local community to improve the area and quality of life of the community where it is based.

12. Examples of Corporate Social Responsibility
Environment:
Businesses, both large and small, have a large carbon footprint
Philanthropy:
Donating to national and local charities
Whether it involves giving money or time, businesses have a lot of resources that can benefit charities and local community programs
Ethical labor practices:
Treating employees fairly and ethically
Especially true of businesses that operate in international locations with labor laws that differ from country to country

13. Growing Importance of CSR
Areas of CSR include:
environmental concerns
poverty
human rights
animal rights
Businesses are realizing the importance of CSR in attracting and maintaining employees and customers
Stakeholders are demanding that businesses give back to the larger community in which they operate
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14. Toms “One for one” motto is a well known phrase
They’ve recently upped the ante by donating a portion of their sunglass sales to vision care for children in need
Toms’ employees participate in an annual Shoe Drop where they travel and donate a variety of goods to children
Their careers page specifically calls for employees that want to change lives and be a part of a movement

15. LinkedIn
One Friday each month LinkedIn’s employees participate “InDay.”
InDay’s purpose is to give back to the community through employee volunteerism and resources.
Each InDay has a different theme allowing diverse departments to come together for a common cause.
InDay activities range from guest speakers discussing global justice, to initiating global learning programs, and volunteering in local communities

16. PG&E PG&E does its part to serve the communities of California
On Earth Day employees help clean and restore 18 state parks
They are exemplary members of Habitat for Humanity and volunteer by providing solar panels on new Habitat homes
Participate in various food programs

17. Zappos
Zappos is known for a company culture that focuses on the well being of their employees and they are on a mission to make the world a better place
They donate huge amounts of Zappos goods to tons of charitable organizations
Their employees are paid for time off if they are volunteering

18. Now It’s Your Turn
In pairs, find another example of a company that utilizes CSR.
Give a short presentation to the class

19. Case Study: Intel Sets Itself Social Objectives in Malaysia
Using examples, explain the difference between mission and objectives.
Evaluate the extent to which Intel benefits from having a widely publicized mission statement.

20. Mission Statement, Objectives, Strategy and Tactics
The mission of a business is the fundamental reason why it exists
A mission statement sets out the purpose of the business
The mission is a rather general statement and, unlike objectives, whether or not it has been achieved cannot easily be measured.

21. Mission Statement, Objectives, Strategy and Tactics
Once these targets have been set the business has to decide how to achieve them most effectively
The long-term plan to achieve an objective is known as a strategy.
The strategy has to be put into action.
The shorter-term action plans that combine to make up the strategy are known as tactics.

22. From Mission to Tactics
A mission statement sets out the overall purpose of a business.
An objective is a target that is measurable and has a given timescale.
Strategy is a long-term plan to achieve the objective of the business.
Tactics are short-term actions needed to implement the strategy.

23. Mission Statement A mission sets out the purpose of the business
Example: An airline company may exist to be the “best airline in the world”
Mission is determined by the owners of the business

24. Objectives
Objectives are measurable targets that are given a timescale

25. Strategy
Long-term plan to reach an objective

26. The Importance of Business Objectives
Business objectives set out what the business wants to achieve
This provides a focus for all decisions
Everyone in the business should know what their role is to lead the company to achieve those objectives
Objectives can:
motivate employees by providing a target
provide a measure of control as progress can be reviewed against the target

27. The Role of Objectives in the Stages of Business Decision-Making
4.2

28. The Role of Objectives in the Stages of Business Decision-Making
Managing a business involves many different decisions
Making right decisions is important

29. Decision Making Involves
Setting objectives: A success of a plan can only be judged against the objectives that were set.
Gathering information: You need information on where you are at the moment, what is happening and your opinion to analyze the situation.
Selecting a suitable strategy: Figuring out the best strategy
Implementing the strategy: Put your tactics to work
Reviewing: Essential to see how you have got on and what if anything needs to change. Can also change targets at this point.

30. How Objectives Might Change Over Time
Internally: A business may have new owners or managers who want to achieve different things
Example: more concerned about environmental record, faster growth, etc.
Externally: Perhaps the economy has changed so the business needs to change their targets
If the economy is in decline, growth targets will be reduced
New competitors would affect profit targets
Decision-making is a continuous process that changes as new objectives are set

31. Turning Objectives Into Targets and Budgets
With each objective there should be a strategy of how it is to be achieved and specific tactical targets showing the details of the activities that need to be undertaken
A plan will show:
Who is in charge of what
What they have to do
When it must be done
How much do they have to spend (a budget)
A budget is a financial plan

32. The Communication of Objectives
There needs to be a discussion with people who will be responsible for achieving the objectives
Having objectives can be motivating for employees because it provides a sense of direction
Also could be demotivating if the objectives are unrealistic and if there is no one that believes in them

33. How Ethics May Influence Business Objectives
Ethical behavior is behavior that is thought to be morally correct, and not necessarily the most profitable
How businesses consider right or wrong in terms of business behavior
Should we produce a product that is harmful to the environment even though it is much cheaper for us?
Example: plastic bags. Many businesses have stopped using plastic bags and make you purchase reusable bags
Sometimes objectives can encourage unethical behavior:
If the objectives are set too high
Sales objectives for example, might encourage the sales team to trick customers or pressure them into buying something they don’t want or need

34. Encouraging Ethical Behavior
Beyond written codes of ethics, organizations have unique cultures—ways of doing things that evolve through shared values and beliefs
Subordinates look to their supervisors as role models of ethical behavior
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35. Ethical Issues: Bribes
Bribery is the act of giving money, goods, or other forms of compensation to a recipient in exchange for an alteration of their behavior
A kickback is a form of negotiated bribery in which a commission is paid to the bribe- taker in exchange for services rendered
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36. Ethical Issues: Conflict of Interest
An ethical challenge that occurs when an individual or organization is involved in multiple interests that are at odds with one another
Self-dealing: Officials enter into a deal benefiting them personally
Outside employment: The interests of one job may contradict another
Family interests: Officials employ or purchase goods from a relative. Abuse of this type is called nepotism
Gifts from friends who also do business with the person receiving the gifts

37. Case Study: Ethics at Texas Instruments (TI)
Explain why TI sets out its ethical objectives on its website.
Discuss the case for and against TI operating with ethical behavior as a key objective at all levels in the business.

38. Practice Question
You are on a committee interviewing applicants for a position. A friend has applied. What should you do?
Inform the head of the hiring committee that you know one of the applicants and ask whether you should remove yourself from considering her application
Look at your employee code of conduct
Advocate for your friend. You would enjoy working together
Inform the head of the committee and look at the code of conduct.