Topic 3 - Objectives. Higher Business Management
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1 Topic 3 - Objectives Higher Business Management 1
2 Learning Intentions / Success Criteria Learning Intentions Objectives of businesses Success Criteria Learners should be aware of the following aims/objectives of the organisations and be able to explain any similarities or differences in these aims/objectives. Corporate social responsibility Growth Satisficing Managerial objectives 2
3 Corporate Social Responsibility (CSR) In order to have a positive public image and gain customer trust, many businesses look to improve the working conditions of their employees, their treatment of the environment and working with society. 3
4 Methods to Ensure Good CSR Methods of good corporate social responsibility can be carried out in the following areas: ethical and environmental responsibilities philanthropy economic responsibilities legal responsibilities. 4
5 Ethical and Environmental Avoiding the use of child labour. Responsibilities Paying staff a living wage instead of minimum wage. Making sure raw materials come from sustainable sources (sources that can be replaced), e.g. trees when paper is being manufactured. Trying to reduce its carbon footprint as much as possible, e.g. using the most environmentally friendly method of distribution. Making sure suppliers are paid fairly for what they produce, e.g. by adopting a fair trade policy. Recycling as much as possible / minimising packaging for customers. Providing opportunities for employees to participate in physical activity and promoting healthy eating, e.g. providing cycling facilities to get to work or providing healthy options in the canteen. 5
6 Philanthropy Donate to charity. 6
7 Economic Responsibilities Use fair and competitive marketing. 7
8 Legal Responsibilities Abide by laws that govern businesses. 8
9 Advantages of Positive CSR The business gains a good reputation for its caring nature. Customers who agree with the aim are likely to use the business. The business can attract high-quality staff who believe in the ethics of the business. Society and the environment are kept in good order, which will benefit the business in the long run. 9
10 Satisficing Satisficing means aiming for a satisfactory or adequate result rather than the best possible outcome, especially during a recession. Most private sector businesses would ideally aim to maximise profits; however, through satisficing, a business could aim only to make a level of profit which is good enough to satisfy the main stakeholders, perhaps making enough profit to cover satisfactory dividends to stakeholders. 10
11 Managerial Objectives Managers may try to improve their status within the company, for example, expansion into new markets, or developing new technologies. Managers might have their own internal objectives, either financial or non-financial. They may aim to have many subordinates reporting to them in order to increase the responsibility, and therefore their salary. They may also want to receive bonuses for achieving certain targets, other fringe benefits ( perks ) such as a company car or promotion. 11
12 Growth Businesses might aim to grow for a number of reasons: To increase sales and profit which in turn will increase the return on investment for owners (e.g. dividends for shareholders). To increase the number of customers which will increase profits and market share, and may enable the organisation to become a marker leader. To take advantage of economies of scale (discounts for bulk buying), thereby reducing costs. To reduce the risk of a takeover by another organisation. To gain a better reputation in the marketplace which will encourage new customers to buy, thereby increasing sales and ultimately profit. 12
13 Advantages/Disadvantages of Internal Growth Advantages Can be less risky than taking over another business Can be financed through internal sources Can build on existing strengths such as brands and good customer relations. Disadvantages A slower method of growth Limited by the size of existing market. 13
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