1.3 Organizational Objective

Transcription

1 IB Business And Management Page Organizational Objective Sunday, September 22, :02 AM Objectives - Business objectives - Mission and vision statement Objective lead you to your goal Questions you ask Where are we now? Where do we want to be? How do we get there? How do we know we are there?

2 IB Business And Management Page 2 Mission Statements and Vision Statement Sunday, September 22, :26 AM Vision statement - Address the question "what do we want to become" - focuses on the long run - Do not have to be actual targets; it allows people to see what could be Mission statement - Deals with the question "what is our business" - Focuses on the medium and long term - Updated more frequently - Outline or highlights the values of the business - Sets the framework for the workers (managers, employers, employees)

3 IB Business And Management Page 3 Aims and Objectives Sunday, September 22, :17 AM Aims Long term Objectives Strategic Growth Image and reputation Market standing Tactical Sale revenue Survival Ethical

4 IB Business And Management Page 4 NOTE: DO TACTICAL, STRATEGIC AND ETHICAL OBJECTIVES Monday, September 30, :35 AM

5 IB Business And Management Page 5 Corporate Social Responsibility (CSR) Social Auditing Monday, September 30, :38 AM Acting morally towards their shareholders CSR (Corporate social responsibility) Moral - Stake holder Owner Share holder Government Employees Environment Creditors or suppliers Community Customers Corporate social responsibility Social Audit To assure that social responsibility are being implemented. Environmental audit To assure that social responsibility are being implemented towards the environment. S - SPECIFIC/ M- MEASURABLE A - ACHIVABLE (AGREEABLE) R - REALISTIC T - TIME Market Share Industry Cloth Food Phone Telecom Batelco Zain Viva Market share of the company= total sales revenue / the whole industry /revenue * 100 Increases your image and reputation Customer base Profits

6 IB Business And Management Page 6 Slide notes Wednesday, October 2, :49 AM Business and Management: 1.3 Organizational Objectives Lesson 1 Pages Focus Questions 1. What are some important organizational objectives? 2. What is a mission statement? 3. What is a vision statement? Do they differ? 2. An overview What is the core role of management? Starts with a D? Anyone? Decision-makingright! There are four (4) key questions that management MUST ask in the decision-making process: Where are we now? Where do we want to be? (we are going to focus on this) How do we get there? How do we know we are better? 3. Where do we want to be? This question answers this: The aims and objectives of business organization. How do organizational objectives guide a business? Gives the business a sense of direction. When you drive a car and get lost, what do you use to find your way? A road map. Organizational objectives have three (3) functions: To control a firm s plan (set up targets within a department. To motivate or inspire people to reach a common goal. To direct; to provide an agreed and clear focus for everyone in the organization. 4a. The importance of objectives

7 IB Business And Management Page 7 Why is target setting vital in all businesses? If you do not do this you will have no clear sense of direction. No clear purpose. Aims and objectives are set for many important reasons: Give a business a sense of direction, purpose and unity. Forms the foundation for business decision-making. Encourages strategic thinking (planning for long term). Provides a basis for measuring and controlling the performance of the workforce, the management, and the entire business. 4b. The importance of objectives What are the many groups affected by the performance and activities of a business? Stakeholder / shareholder groups What are they interested in? Local community Profit.show me the money Jerry! What are they concerned about? Social responsibility of a business. 5. Business objectives at different levels Corporate objectives: Deal the with whole organization. Goals, profit maximization, growth, over all survival. Departmental objectives Very specific objectives; departmental targets Individual objectives Targets set for you or by you. Often used in performance appraisal 6a. Mission and Vision Statements Sales targets; if you are a salesperson. A vision statement: Outlines a business s aspirations (where it wants to be). They relate to the attainment of success I have a dream To be the leading sports brand in the world It is an image of an ideal situation in the future.

8 IB Business And Management Page 8 6b. Mission and Vision Statements A mission statement: Explains what the business is trying to achieve. Outlines the organizations values. It is a simple declaration that states the purpose of an organization s existence. It will outline how a vision statement will be achieved. These statements do not have a time frame. They should be clearly defined and realistically achievable. It will serve to unify all people and corporate culture in an attempt to achieve the organization s vision. As a manager you will need to ensure that decisions are consistent with the mission statement. 6c. Mission and Vision Statementsstill confused??? Vision Statements Focused on long term. Not updated frequently. No actual targets. (what could be) Mission Statements Focused on medium to short term. Are updated frequently. Have actual targets. (what will be) Highlights the values of the business. Business and Management: 1.3 Organizational Objectives Lesson 2 Pages Focus Questions 1. What are aims and objectives? 2. What is meant by short-term vs long-term objectives? 3. What ethical objectives do companies follow? 2. Aims and Objectives

9 IB Business And Management Page 9 Aims: Objectives: Remember: Are the long term goals of an organization. They give a purpose to the direction of the company. Are often expressed in the mission statement. Are the short term goals of an organization. They are based on the company s aims. They are quantifiable (measurable) The main difference between the two is the time scale. Aims are vague, objectives are more specific. 3a. Short-term vs Long Term Objectives What does strategy mean? A plan or scheme to achieve what? Long term aims of a business. It is used to achieve strategic objectives. What does tactics mean? The short-term ways that firms use to achieve their aims and objectives. Both strategy and tactics will answer the questionwhat question will it answer? 3. How do we get to where we want to be? 3b. Short-term vs Long Term Objectives What might be the several levels of strategy that a business can adopt? Operational strategies: The day-to-day methods used to improve the efficiency of a business. Generic strategies: Those that affect the business as a whole Corporate Strategies: Such as differentiation Aimed at the long-term objectives of a business. 4. Tactical Objectives Aiming for market dominance seek ways in doing so. Mergers, takeovers of rivals etc. So what are tactical/operational/secondary objectives? Are short-term objectives that affect a segment of the organization. For example, a sales department will set its own objectives.

10 IB Business And Management Page 10 The main tactical objective for many businesses is survival. A second tactical objective might be sales revenue maximization. Maximize their sales. Remember: sales revenue is not PROFIT. 5. Strategic Objectives What are strategic/primary objectives? Are long-term aims of a business organization. Targets for the next couple of years. 1. Profit maximization: Making as much profit as possible. 2. Growth: Measured by an increase in sales or by market share Benefits of growth include: Economies of scale, lower average cost of production. Market power, more monopoly, charge higher prices. Reduced risks, diversification; helps reduce risk. 3. Image and Reputation Having a bad image may turn customers away. Must also consider the NEEDS of the customer. Having a good reputation, people will want to do business with you. 4. Market standing Refers to the extent which a firm has presence in the marketplace. Microsoft has high market standing for being number one in the computer software industry. Walmart, the world s largest retailer. Toyota The Body Shop. 6a. Ethical Objectives What are ethical objectives? They are the moral principles that guide decision-making strategy. Morals are concerned with what is right and wrong, from a society s point of view. Examples of ethical objectives: Reducing pollution Increase recycling Friendly waste disposal Treating employees well. Fairer trade conditions. Pressure from within or outside the business to act ethically may occur. Some examples of Unethical business behavior:

11 IB Business And Management Page 11 Financial dishonesty Environmental neglect Exploitation of workers Exploitation of suppliers Exploitation of customers 6b. How to Achieve Ethical Objectives How can we achieve this? Well, a number of businesses have to adopt an ethical code of practice. This should be published in the mission statement or annual report. What is this ethical code of practice? Documented beliefs and philosophies Guidelines and expectations on employee behavior. Let s look at box 1.3a on pg c. Advantages / Limitations Advantages: Improved corporate image. Increased customer loyalty. Cost cutting. Improved staff motivation. Improved staff morale. Providing accurate information and labeling. Active community work. Having consideration for the environment. Adhering to fair employment practices. Limitations: Compliance costs. Lower profits. Stakeholder conflicts. Note: Ethical behavior is very subjective. What is right or wrong? Depends on the individual. Laws have been put in place to correct this. Anti-discrimination laws. Health and Safety at Work Laws. Lets look at pg 51 Business and Management: 1.3 Organizational Objectives

12 IB Business And Management Page 12 Lesson 3 Pages Focus Questions 1. What does it mean to have corporate social responsibility? 2. What are social and environmental audits and how are they conducted? 2. Corporate Social Responsibility (CSR) So what are socially responsible firms? Firms that act morally towards stakeholders, employees, and local community. So how can firms be socially responsible? Post-tax profits to charity. Help clean up the environment. One benefit of practicing CSR is increased reputation. Why is this important? To obtain a competitive advantage. 3a. Differing Views about CSR Free Market or Non-compliance: Is the role of business solely to generate profits for their owners? Should governments, rather than businesses be responsible for sorting out social problems? This views reasoning is that by pursuing the profit motive, firms will be more efficient and prosperous, thus helping society indirectly (job creation and corporate taxes). Is this always the case? 3b. Differing Views about CSR Altruistic CSR Attitude: What is altruism? What has happened recently?... Refers to acting in a humanitarian and unselfish manner. Do businesses really help society? Do they try to improve society? Which companies do what they can to improve the society, regardless of whether their actions help to increase their profits? Charities 3c. Differing Views about CSR Strategic CSR Attitude: What does this view entail? Local community projects Argues that businesses should be socially responsible ONLY if such actions help the

13 IB Business And Management Page 13 business to become more profitable (used as a method of long term growth). So, how can we monitor companies to practice CSR? How can practice this in other countries? Is it possible? What is considered acceptable in one country may be totally undesirable in others. In some Asian countries cigarette and liquor commercials are everywhere, where as in North America they are banned. Do managers have a role in CSR? How so? Promote and encourage CSR in the workplace. Box 1.3b gives examples of other means. To what extent is a firm able to act socially responsible? (7 factors J ) 4a. Social Auditing Let s recap: Why do corporations get involved in CSR? To enhance their corporate image and reputation. Sowhat is Social Auditing? Is a way to ensure that SR objectives are being implemented. Social audit: is an independent assessment of how a firm s actions affect society. The audit will review a firms: Environmental impact (pollution and waste levels) Staff management (health and safety) What is an environmental audit? an independent review of a firms impact on the environment. What are 5 key parts of social auditing for a firm to devise policies that deal with its impact on society? See page 53. 4b. Social Auditingthe limitations What are the limitations of Social Auditing? Auditor charge a fee Contents of the review may not be positive; could affect the public image and reputation of the company. 5. Organizational Objectives and Business Strategy Successful businesses have a clear vision of their aspirations and a mission that outlines their ultimate purpose. The performance of a business can be judged by the extent to which it achieves its objectives. Peter Drucker? Have you ever heard of this guy? Stated that organizational objectives be SMARTJ

14 IB Business And Management Page 14 What does it mean to set SMART objectives? Need to be: Read pg to find out more. :P Specific Measurable Agreed Realistic Time constrained