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Chapter 4 - Business Objectives - Coggle Diagram
Chapter 4 - Business Objectives
Business objectives in the private and public sectors
Business objectives are long term goals or targets that a business will work towards
The objectives will determine all the activities that various sections of the business undertake
The nature and importance of business objectives at corporate, departmental and individual levels
SMART Objectives
Achievable/Agreed - Everyone involved feeling capable of reaching the goal and motivated to achieve it
Realistic - In the timeframe that is set
Measurable - So progress can be assessed
Time specific - Without it is hard to assess
Specific - In what is to be achieved
Typical business objectives
Growth of business, increased market share, increased sales revenue, survival, social objectives (community help), ethical objectives (paying suppliers fairly), environmental objectives (recycling)
Nature of objectives effected by: size of business, business culture, economic environment, private or public sector, how long the business has been around
Can be set at a corporate level (increased market share within 10 years), departmental level (production department increasing output by 5%), or individual (zero defects, increased efficiency)
Objectives are important because they provide focus and a framework for business activity, ensure there is one ultimate goal for the whole company
Corporate Social Responsibility as a business objective
Buying decision influenced by level of CRS
All businesses can benefit if they are seen behaving in a socially responsible manner
Business strive to behave in an ethical manner
Action needed for an organisation to act responsibly to all its stakeholders
The relationship between mission statement, objective, strategy, and tactics
A mission statement is a public statement of the overall intent of an organisation
Objectives and long term goals are set to achieve the mission statement
A strategy is devised to achieve the objective
Tactics are involved to increase the rate at which the objectives are achieved
Objectives and business decisions
Different stages of business decision making and the role of objectives
Stages
Analyse and evaluate the data in the context of the goal
Discuss the advantages and disadvantages of strategies to be used to achieve the goals
Collect relevant data
Identify the problem or goal to be achieved
Implement the chosen strategy
Review the effectiveness of the strategy and refine/change the approach
How objectives can change over time
Circumstances changing
Economic environment changing
New competitors entering the market
Existing competitors becoming more aggressive
Translation of objectives into targets and budgets
Business objectives are in stages
The stages form the base of the short term targets for the objective to be achieved
Targets can be departmental or individual based
Business objectives has an overall budget, which can be divided into smaller budgets and allocated to each division/department
Size of smaller budgets determined by requirements placed on the departments
Communication of objections and their likely impact on the workforce
Objective are communicated to the workforce through agreed channels of communication within a business
A workforce is likely to be informed about objective when the objectives have an impact on the way they work, or output they need to produce
Objectives might be motivating to the workforce by making them aware of their contribution to the main aims of the business
Being aware of objectives gives workforce a feeling of team spirit
There might be a demotivating effect on the workforce if the declared aims used increase machinery, making workforce redundant
How ethics may influence business objectives and activities
Ethics aren't limited to legality but a moral guide to how a business might conduct itself
Using child labour to increase the production rates, and lowering labour costs would deter customers from purchasing products
Non-polluting methods of production may be more expensive, but would increase profits
In order for a business to succeed, it must have customers, but if you are judged as unethical then you will lose customers