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3 Organizational Objectives

Mission & Vision Statements

Mission Statement: a businesss core aims, phrased in a way, which motivates
employees and stimulates interests by outside groups.

Vision Statement: a statement, which states what, the organization aims to achieve or
accomplish in the long run.



Vision Mission
Concept What do we want? Why are we doing, what were doing?
Purpose A vision is a future forecast, its
what the business will work
towards in achieving
A mission focuses on the present and
how it needs to be communicated in
order to fulfill the vision.
Audience Inspires and motivates employees


External stakeholders relate with
the business due to shared beliefs
Means for accountability by defining key
performance indicators

Measures how successful the business is
for external stakeholders

Change The core values that express the
vision should never change
The mission can change and become
modified as circumstances(time)
changes

Advantages and Disadvantages

+ Informs what the central aims are
+ Helps to motivate employees
+ Can help to guide individual employee behavior (acting ethically)
+ Helps to establish what the business is about
- Too vague and general
- A PR exercise to make stakeholders feel good about the organization
- Impossible to analyze or disagree with
- Lack specific detail

Objectives
These are shorter, more specific goals based on the aims of the organization. They state
what an organization needs to do in order to achieve their aims.
There are two main ways of fulfilling aims; strategies and tactics

Strategic and Tactical Objectives

Strategic Objectives: long-term objectives set by the directors to guide the company in
the right direction in order to fulfill its aims.
o Set by board of directors or senior manages
o Difficult to reverse or change once established
o Long-term goals for the organization
o Often high-risk involving resources

Tactical Objectives: short-term objectives set by
managers to achieve the strategic objectives
o Set by managers
o Easy to change/modify
o Short-term goals
o Less risky involving few resources

Operational Objectives: the day-to-day objectives
set by floor managers (and sometimes workers
themselves) so that the company can reach its
tactical objectives
Set by managers to ensure:
o Coordination between all divisions (
o Consistency with strategic corporate
objectives
o Adequate resources are provided to allow
for the successful achievement of the objectives
Once divisional objectives have been established,
these can be further divided into departmental
objectives and finally budgets and targets for
individual workers. This is known as MBO
management by objectives)

Importance of Objectives
Gives a sense of direction
Purpose and unity within the organization
Encourages strategic thinking
Foundation of decision making
Basis for controlling and measuring performance
SMART Criteria

What ideally business aims should fulfill:
S Specific
M Measurable
A Achievable
R Realistic
T Time specific

Corporate Objectives
Important, broadly defined aims that a business aims to achieve
o Profit maximization
o Profit satisficing
o Growth
o Increased market share
o Survival
o Corporate social responsibility

Factors determining corporate objectives
o Corporate culture
o Size and legal form of business
o Public or Private sector
o Well established-businesses

Changing business objectives
These can change over time in response to changes internally (resources) or externally
(economic environment). Reasons for changes include:
A business may have reached its original objective and now needs to set some
new ones
Changes of senior staff may lead to changes in direction
External competitive and economic environment may change (eg. recession)
A short-term objective might be replaced with a long-term objective
Changes in the internal environment of a business might include:
Leadership - new leaders coming into the organisation
HR (Human Resources) - industrial action could force change in an organisation
Organisation - mergers or acquisitions can cause many objectives to have to
change
Product - performance in the marketplace may force changes to be made to a
product
Finance - recessions could mean less finance is available to a business
Operations - relocation of a factory of purchase of new technology
Changes in the external environment of a business might include:
Social - changes in society or culture
Technological - rapidly changing technology
Economic - changes in market conditions or recessions/booms
Ethical - changing values in society (Fair Trade, Organic, sustainability)
Political - changes in government could lead to changes in the business
environment
Legal - regulations, taxes etc can affect the external environment
Ecological - growing awareness of being green can cause a business to make
changes
Ethical Objectives

Ethics: a set of values and beliefs, which influence how individuals, groups and societies
behave.

Pressure for a business to operate ethically can be from internal or external influences.
This will affect business decisions. A business can act ethically by:
o Reducing pollution
o Recycling
o Using environmentally free disposal methods
o Treating staff well
o Doing fair trade with less developed countries
Businesses use their ethical practices as a unique selling point. This is a very costly
process, so the business must that they get the return (profits) of implementing these
practices.

Why are ethical objectives important?

Builds customer loyalty
Creates a positive image about the organization
Develops a positive work environment
Reduces the risks of legal address
Satisfying customers even higher expectations for ethical behavior
Increasing profits

Benefits and Limitations of acting ethically

Benefits Limitations
Avoiding bad publicity Lower profitability due to higher
costs
Avoiding legal cases for acting
unethically
Free economy, businesses can do
what they like
More loyal consumers May hinder from main aim; which
is to provide a good or service
More government contracts Can cause conflict between
stakeholders
More well qualified and well
trained staff


Corporate Social Responsibility (CSR)

CSR is when businesses act morally towards stakeholders, boosting their reputation. This
should only be done in the interest of the business, as it is costly.
The main reasons businesses have changed their approach to CSR are:
Increasing publicity from international pressure groups like Greenpeace
The UN development goals have forced many countries to take environmental
concerns into consideration
Global concern over climate change is forcing companies to consider the
consequences of their actions
Legal changes have forced businesses to refrain from certain practices
Free-Market Attitude this is the attitude towards CSR that such social issues are the
responsibility of governments, not businesses. They instead make profit, pay tax and
provide employment only.
Altruistic Attitude this is the attitude that businesses should always seek to give back
to society simply out of humanitarianism and unselfishness.
Strategic Attitude this is the attitude that businesses should be socially responsible if it
will benefit them and will bring profit and growth.

SWOT Analysis
Positioning is a perceptual location. It's where your product or service fits into the
marketplace. Effective positioning puts you first in line in the minds of potential
customers. SWOT analysis can be combined with positioning to develop one of the
strategies below:
Growth - combine the strengths of the business with market opportunities
Defensive - this is a good strategy when a business has both threats and
weaknesses and is a survival strategy
Re-orientation - the focus is on addressing the weaknesses in order for a
business to use the opportunities available
Defusing - designed to eliminate threats in the market by focusing on the
strengths of the business

Ansoffs Matrix
A useful business tool to help businesses plan and set objectives - particularly growth
strategies.

The matrix looks at the growth potential in terms of the market and product and
considers both existing and new markets and products.
Market penetration - occurs when a business grows by increasing its market
share, selling more of its existing products in the same market
Market development - expands the market by looking for new markets or for
new market segments in the existing market
Product development - development of
new products for the existing market
Diversification - a business can
introduce a new product into a new market -
the most risky strategy