Organizational Organizational ObjectivesObjectives

The Importance of objectivesThe Importance of objectives

Give businesses a sense of direction, Give businesses a sense of direction, purpose and unitypurpose and unity

Form the foundation of business decision Form the foundation of business decision makingmaking

Help to encourage Help to encourage strategic thinkingstrategic thinking

Provide the basis for measuring and Provide the basis for measuring and controlling the performance of the controlling the performance of the workforceworkforce

Vision statementsVision statements

A A vision statement vision statement outlines a business’s outlines a business’s aspiration in the distant futureaspiration in the distant future

““To be a leading sports brand in the To be a leading sports brand in the world” is the vision of Adidasworld” is the vision of Adidas

Vision statements relate to attainment of Vision statements relate to attainment of successsuccess

Mission statementsMission statements

A A mission statement mission statement tends to be a simple tends to be a simple declaration that broadly states the declaration that broadly states the underlying purpose of an organization.underlying purpose of an organization.

““To be a world class institution in nurturing To be a world class institution in nurturing the holistic development of our students”the holistic development of our students”

Clearly defined and realistically achievableClearly defined and realistically achievable

Serve to unify all people and corporate Serve to unify all people and corporate cultures within the workforcecultures within the workforce

Vision & Mission statementsVision & Mission statements

Vision statements focus on long term whereas Vision statements focus on long term whereas mission statements can focus on the medium mission statements can focus on the medium or long termor long term

Mission statements are updated more Mission statements are updated more frequently than vision statementsfrequently than vision statements

Vision statements do not have actual targetsVision statements do not have actual targets

The mission statement tends to highlight the The mission statement tends to highlight the values of the businessvalues of the business

AimsAims

Aims are the general long term goals of Aims are the general long term goals of an organization.an organization.

Broadly expressed and unquantifiable Broadly expressed and unquantifiable statementsstatements

Example, ‘to promote social and Example, ‘to promote social and environmental integrity’environmental integrity’

Long term aims are usually set by Long term aims are usually set by senior directors of a businesssenior directors of a business

Objectives Objectives

ObjectivesObjectives are short term and more are short term and more specific goals of an organization, based specific goals of an organization, based on aims.on aims.

For example, for a school ‘to achieve For example, for a school ‘to achieve 100% pass are IB examination’100% pass are IB examination’

Setting objectives may be delegated to Setting objectives may be delegated to senior or middle managementsenior or middle management

Short Term vs Long Term Short Term vs Long Term Objectives Objectives

Strategy is any plan or scheme to achieve Strategy is any plan or scheme to achieve long term aims of business.long term aims of business.

Strategy is used for strategic objectives.Strategy is used for strategic objectives.

Tactics are short-term ways that firms can Tactics are short-term ways that firms can use to achieve their aims and objectivesuse to achieve their aims and objectives

Short Term vs Long Term Short Term vs Long Term Objectives Objectives

Strategy is any plan or scheme to achieve Strategy is any plan or scheme to achieve long term aims of business.long term aims of business.

Strategy is used for Strategy is used for strategic objectivesstrategic objectives..

Tactics are short-term ways that firms can Tactics are short-term ways that firms can use to achieve their aims and objectivesuse to achieve their aims and objectives

Levels of StrategyLevels of Strategy

Operational strategies Operational strategies are the day-to-day are the day-to-day methods to improve efficiency of an methods to improve efficiency of an organizationorganization

Generic strategies Generic strategies are those that affect are those that affect the business as a wholethe business as a whole

Corporate strategies Corporate strategies are aimed at the are aimed at the strategic objectives (long-term) of an strategic objectives (long-term) of an organization.organization.

Tactical Objectives Tactical Objectives

Tactical objectives (operational) are short-Tactical objectives (operational) are short-term objectives that affect a segment of term objectives that affect a segment of an organization, such a departmentan organization, such a department

Short-term objectives tend to refer to Short-term objectives tend to refer to targets set for the next 6-12 monthstargets set for the next 6-12 months

Example, a tactical objective could to Example, a tactical objective could to maximize sales revenuemaximize sales revenue

Strategic Objectives Strategic Objectives

Strategic objectives or primary objectives refer Strategic objectives or primary objectives refer to long term aims of business organizationto long term aims of business organization

Examples in next slideExamples in next slide

Types of Objectives Types of Objectives Profit maximise. Profit maximise. Some business try to profit Some business try to profit maximise.maximise.

GrowthGrowth. Many businesses pursue growth for . Many businesses pursue growth for survival.survival.

Increasing shareholder valueIncreasing shareholder value. Public listed . Public listed company run the company to increase share company run the company to increase share price and dividends.price and dividends.

Image and reputationImage and reputation

Market standing Market standing is interlinked with corporate is interlinked with corporate image and reputation of a business.image and reputation of a business.

Sales revenue maximizationSales revenue maximization. .

The CSR VineyardThe CSR Vineyard

You are an analyst with a private equity You are an analyst with a private equity firm.firm.

For the first time, your firm is thinking of For the first time, your firm is thinking of investing in a business with ethical investing in a business with ethical objectives.objectives.

Watch the video to know the company Watch the video to know the company better.better.

Advise your manager whether to invest in Advise your manager whether to invest in this company.this company.

The CSR VineyardThe CSR Vineyard

Ethical ObjectivesEthical ObjectivesEthicsEthics are moral principles that guide decision- are moral principles that guide decision-making and strategy.making and strategy.

Morals Morals are concerned with what is considered are concerned with what is considered right or wrong from society point of viewright or wrong from society point of view

Ethical objectives may include:Ethical objectives may include:

- Reducing pollution by using environmental - Reducing pollution by using environmental friendly production methodsfriendly production methods

- recycling of waste materials- recycling of waste materials

- disposal of waste in an environmental friendly - disposal of waste in an environmental friendly way way

- Offer staff sufficient rest breaks during their - Offer staff sufficient rest breaks during their

work shiftwork shift

Ethical ObjectivesEthical Objectives

Examples of unethical business behaviourExamples of unethical business behaviour

- Financial dishonesty- Financial dishonesty

- Environmental neglect- Environmental neglect

- Exploitation of the workforce- Exploitation of the workforce

- Exploitation of suppliers.- Exploitation of suppliers.

- Exploitation of consumers.- Exploitation of consumers.

Ethical ObjectivesEthical Objectives

Advantages of ethical behaviourAdvantages of ethical behaviourImproved corporate image. Improved corporate image.

Increased customer loyaltyIncreased customer loyalty

Improved staff motivationImproved staff motivation

Improved staff moralImproved staff moral

Ways to social responsibilityWays to social responsibility

Providing accurate information and Providing accurate information and labellinglabelling

Active community workActive community work

Having consideration for the environment.Having consideration for the environment.

Adhering to fair employment practices.Adhering to fair employment practices.

Limitations of ethical behaviour Limitations of ethical behaviour

Compliance costs. For example, organic Compliance costs. For example, organic products are more expensive.products are more expensive.

Lower profits. Lower profits.

Stakeholder conflict. Stakeholder conflict.

Corporate Social ResponsibilityCorporate Social Responsibility

Socially responsible firms are businesses Socially responsible firms are businesses that act morally towards their stakeholders.that act morally towards their stakeholders.

Free market CSR attitudeFree market CSR attitude. Many economists . Many economists argue that the role of businesses is to argue that the role of businesses is to generate profitsgenerate profits

Altruistic CSR attitudeAltruistic CSR attitude. These businesses do . These businesses do what they can to improve the society what they can to improve the society

Strategic CSRStrategic CSR. Business adopt CSR if such . Business adopt CSR if such actions help them grow.actions help them grow.

Social AuditingSocial Auditing

Socially responsible firms are businesses Socially responsible firms are businesses that act morally towards their stakeholders.that act morally towards their stakeholders.

Free market CSR attitudeFree market CSR attitude. Many economists . Many economists argue that the role of businesses is to argue that the role of businesses is to generate profitsgenerate profits

Altruistic CSR attitudeAltruistic CSR attitude. These businesses do . These businesses do what they can to improve the society what they can to improve the society

Strategic CSRStrategic CSR. Business adopt CSR if such . Business adopt CSR if such actions help them grow.actions help them grow.

Changes in Corporate Objectives Changes in Corporate Objectives & Strategy (HL)& Strategy (HL)

Internal factors:Internal factors:

Corporate culture Corporate culture – norms and customs of a – norms and customs of a business and its workforcebusiness and its workforce

Type and size of organizationType and size of organization

Age of business Age of business – any new business will place – any new business will place break-even and survival as their key objectivesbreak-even and survival as their key objectives

FinanceFinance

Risk profile Risk profile of key stakeholdersof key stakeholders

Private vs Public organizationsPrivate vs Public organizations

Changes in Corporate Objectives Changes in Corporate Objectives & Strategy (HL)& Strategy (HL)

External factorsExternal factors::

State of economy State of economy – boom or slump– boom or slump

Government constraints Government constraints – rules and – rules and regulationsregulations

Pressure groups Pressure groups – may force business to – may force business to change through lobbyingchange through lobbying

Changes in Societal Expectation Changes in Societal Expectation of Business Behaviourof Business Behaviour

Attitudes towards CSR changes over time.Attitudes towards CSR changes over time.

CSR is a subjective issue CSR is a subjective issue – what is right or – what is right or wrong largely based on public opinionwrong largely based on public opinion

Pressure groups affect organisational Pressure groups affect organisational behaviour.behaviour.

Businesses become more aware of Businesses become more aware of environmental damageenvironmental damage