1.3 Business aobjective Flashcards
Mission statment
Motivating statment of organisations core purposee.
- why it exists (identity) and what they do (focus)
- no time frame
- more qualitative instead of quantitative.
Vision statment
Inspirational/aspirational state of what the business achieves to be in distinct future.
-Indicates the core values
- clear guide when planning current/future strategies
- where they want to be
Aims
The long-term Aspiratinol goals of an organisation.
- general brief statement of purpose
- benchmark managersemplyees can be rewarded/held accountable.
Objectives
Specifiy what an organisation strives to achieve.
-long term objectives(strategic objectives): Senior management
- medium term (tactical objectives): Middle management
- short term( opertinol objectives): junior managment
Stratagies
The actions a business takes to reach its long-term organizational aims and corporate-wide objectives.
- Senior leadership/BOD decides how strategies are used to achieve the strategic objectives.
- strategies affect and are affected by the funcitnol areas of a business (HR, operitniol management, etc)
Tactics
The shorter term actions to ahcieveing (tactical and opertiniol objectives)
- methods business use to meet specfic/measurable goals
Common business objectives
Growth: Measured by increase in sales revenue/ market share.
- essential for survival of business
Profit shareholder value: Business objective is about generating long term value for shareholders. Protecting/ maximising shareholder value is about earning profitable return for shareholder.
- BOD and other are mostly responsible for this.
Profit: Most BOD for private sector organisation is to max profits.
- without profit motive most owners and investors find it difficult to justify the existence of the business.
Business ethics: Actions business that are morally correct emply.
- act morally towards employees, customers, shareholders, and environment.
- achieve ethical objectives there must be an “ethical code of practice” in annual report.
EValuation of Ethical objectives and practice
ADVANTAGS:
- Improve corporate image
- Increase custimer loyalty
- Cost cutting: can help avoid litigation costs that can arise from being unethical.
- Improve staff moral and motivation
Disadvantages
- Complienece cost(it is expensive)
-Lower profits( if being ethical doesn’t get passed onto consumers in the form of higher prices then business has to adapt into a lower profit plan)
- Staekholder conflict: Not all of them want to be ethical, they can be more interested in short term profits and not long term ethical stance.
- Subjective nature of business ethics: What society belives what right from wrong changes over time and in each culture can be different.
Strategic Objectives
and what are the objectives
The long term goals of a business set by senior amnagment such as:
Market standing: The extent a business has a presence int he industry.
- having high/good market standing brings competitive advantages.
Image and reputation: enhancing their image and reputation
Market share: Businesses might want to increase market share over time.
- higher a firm’s market share = greater market dominance.
Tactical objectives
Short term goals that affect a unit os the firm. They are specfic goals that guide daily functions of certain operations/functions.
Surival: New business might have problems (lack of recongnisoon, small customer base,etc)
- survival becomes a key tactical objective
Sales revenue maximizing: New businesses want to maximize sales revenue.
Change in business objectives(Internal factors)
CORPORATE CULTURE
- firms with flexible and adaptable organization cultures, have creative objectives that change over time.
TYPE AND DSIZE OF ORGANISATION
- change in legal status means a change in objectives
PRIVATE VS PUBLIC SECTOR ORGANISATION
- private will want to strive for profit maximization, public not
AGE OF THE BUSINESS
- new business might have survival as key objectives, old business can have growth or market share.
FINANCE
- amount of money available determines scope of firms objectives.
RISK PROFILE
- owners with high ability to take risks might have ambitious objectives.
CRISIS MANAGMENT
- business has internal crisis( unexpected high staff not attended and labour turnover)
Change in business objectives (external)
STATE OF ECONOMY
- teh economy cna change objective
e.g economic boom is good
GOV CONSTRAINTS
- constraint can limit creativity and what business strives to achieve
PRESENCE AND POWER OF PRESSURE GROUPS
- -pressure groups can harm corporate image if it doesn’t have socially responsible/sustanoble approach.
NEW TECHNOLOGIES
- can create new business opportunities, changing the objectives
Coprtae scoail responisbility
the idea that businesses should operate according to principles and policies that make a positive impact on society and the environment.
EValuation of corporate social responsiblity
ADVANTAGS:
- Improve corporate image
- Increase custimer loyalty
- Cost cutting: can help avoid litigation costs that can arise from being unethical.
- Improve staff moral and motivation
Disadvantages
- Complienece cost(it is expensive)
-Lower profits( if being ethical doesn’t get passed onto consumers in the form of higher prices then business has to adapt into a lower profit plan)
- Staekholder conflict: Not all of them want to be ethical, they can be more interested in short term profits and not long term ethical stance.
- Subjective nature of business ethics: What society belives what right from wrong changes over time and in each culture can be different.
