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1.3 Organisational objectives (1.3.3 Common corporate aim (profit…
1.3 Organisational objectives
1.3.1 Mission statements and vision statements
mission
outline the overall purpose of the organisation (what do we do?, for whom do we do it?, what is the benefit? )
a statement of the business's core aims, phrased in a way to motivate employees and stimulate interest by outside groups
vision
describes a picture of the 'preferred future' and outlines how the future will look if the organisation achieves its mission.
a statement of what the organisation would like to achieve or accomplish in the long term
1.3.2 Aims,objectives, strategies and tactics
corporate aims
the long-term goals which a business hopes to achieves
benefits
become the starting point for divisional / operational objectives on which effective management is based
can help develop a sense of purpose and direction for the whole organisation
allow an assessment to be made
provide the framework
SMART
M- Measurable
A- Achievable
S- Specific
R- Realistic and relevant
T- Time specific
interlinking
set by seniors to ensure
coordination between all divisions
consistency with strategic corporate objectives
adequate resources are provided
relationship
aims and objectives (long-term plans)
differences
strategy
long term
difficult to reserve once made
taken by directors
cross functional
tactics
short to medium term
reversible but there may still be costs involved
taken by less senior managers and subordinates with delegated authority
Impact of tactical decisions is often only one department
1.3.3 Common corporate aim
profit satisficing
growth
increasing market share
survival
maximising short-term sales revenue
maximising shareholder value
profit maximisation
1.3.4 Ethical Objectives
ethics - moral guidelines that determine decision-making
ethical code (code of conduct) - a document detailing a company’s rule ls and guidelines on staff behaviour that must be followed by all employees
Should a toy company advertise products to young children so that they ‘pester’ their parents into buying them?
Is it acceptable to take tribes bribes in order to place an order with another company?
1.3.5 Corporate social responsibility (CSR)
benefits
The image of the business and its products can improved with a green or socially responsible approach , major competitive advantage , attracting new customers and loyalty from existing customers
bad publicity and pressure group activity resulting from socially irresponsible behaviour should not arise
Higher long term profitability should result from all of the factors above
drawbacks
Short run costs could increase
Loss of cost and price competitiveness if rival businesses do not accept social responsibilities and have lower costs as a result
‘greenwash’ issues
1.3.6 Changes in corporate responsibility
CSR and corporate strategy changes
Measuring CSR - social audits
(health and safety record, contribution to local community events, employee benefit scheme)
social audit- an independent report on the impact a business has on society
Issues relating to corporate objectives
based on the corporate aim
-achievable and measurable
-form the frame work
Conflicts between corporate objectives
growth versus profit
short term versus long term
stakeholders conflict
Factors determining corporate objectives
corporate culture
size and legal form of the business
public sector or provate sector
well-established businesses
1.3.7 Changing business objectives
S = strengths
W = weaknesses
O = opportunities
T = threats
SWOT analysis - a form of strategic analyses the main internal strengths and weaknesses and external opportunities and threats that will influence the future direction and success of a business
1.3.8 Ansoff's matrix
a model used to show the degree of risk associated with the four growth strategies of : market penetration, market penetration, market development , product development and diversification
Main variables
the market
the product
market :
to remain in the existing market
to enter the new one
product:
selling existing products
developing new ones
market penetration: achieving higher market shares in existing markets with existing product
product development : the development and sale of new products or new developments of existing products in existing markets
market development : the strategy of selling existing products in new market