1.3 Business Objectives Flashcards
what is a mission statement
succint and motivating declaration of an organization´s core purpose (why it exists), identity (who they are), and focus (what they do). focused on present. tangible concrete statament of what business wants to do now. what they wish to achieve everyday
vision statements
inspiring or aspirational declaration of what can organization ultimately strives to be, or wants to achieve in distant future. provides info abt business purpose, values and what it wants to achieve in future
what do vision and mission statements aim
- give strategic decision making an overall sense of direction
- provide employees and managers with a sense of purpose and direction of the business
- can help motivate employeez and managers
- attract outside stakeholders such as customers, bbanks and investors
advantages and disadvantages of mission and vision statements
- helps motivate employees with positive aspects of the business
- show customers what business is about
- help align stakeholder interests with business
disadvantages of mission and vision statements
- can be vague and dont always distinguish one business from another
- used for public relations and not followed in business
- do not provide direction sometimes to internal stakeholders or are not taken seriously
Common Business Objectives
Growth, profitability, survival, profit satisficing, protecting shareholder value, ethical objectives
growth as a common business objectives
- measured by an increase in sales revenue or by market share
- growth is essential for survival in order to adapt to changing and competitive conditions
- failure to grow may resylt in declining competititveness
Protecting shareholder value as a common business objective
- earning a profitable return for shareholders in a sustainble way
- balance short term profits (in form of dividends) with an investment in the long term value of a company
profitability as a common business objective
- profit maximization traditionally main objective of most private sector business
- provides incentive for entrepreneurs to take risks in setting and running a business
ethical objectives as a common business objective
- morals are concerned with what is right or wrong from the point of view of society
- business ethics actions of people and orgs considered to be morally correct
ethics
what is deemed to be right and what is considered to be wrong morally from societites pov
business ethics
guiding principles that provide moral guidelines for conduct of business activities
ethical objectives based on moral guidelines to influence or determine business decision making
- considers more than calculating costs, benefits or profits
- act morally toward various stakeholder groups
examples of ethical objectives
- improving overall wellbeing of workers
- adopting green (clean renewable) tech
- honesty and fair treatment with regards to dealings with customers and suppliers
- pursuing sustainable growth strategies
- observing and respecting intellectual property rights of others
- using socially resposible advertising and corporate governance such as financial integrity and transperancy
examples of unethical business practices
- exploitation of stakeholders ( low paid workers, child labour, suppliers being paid late, poor delivery of services to customers)
- misleading marketing gimmicks including direct advertising aimed at young children
- exploitation of natural environment
- fraudulent business activities (such as financial deception)
advantages of ethical objectives
- improved corporate image
- increased costumer loyalty
- improved staff morale and motivation
- increased employee loyalty
- avoiding fines and penalties for unethical business practices
disadvantages of ethical objectives
- compliance costs- costs to implement are high
- lower profit
- often have to charge higher prices
- stakeholder conflict
strategic objectives
plans of action to achieve objectives of an organization. targets that whole org are trying to achieve. medium to long term goals related to what owners of the business want to focus on
tactical objectives
tactics are methods used to enact strategies. easier to change or reverse than strategic objectives. (short term specific targets with definite timelines)
- fullfilment of tactics allow an org to perform strategies
what is CSR
value, decisions, and actions taken by a business that impact society in a positive way. orgs moral obligations to its stakeholders, community and society as a whole and environment
- commit to behaving in a socially responsible way towards its internal and external stakeholders, not just to the owners or stakeholders.
- conscentious consideration of ethical and environmental practices (consider interests of all stakeholders by taking responsibility for the effects their decisions and activities have on customers, employees, communities and environment
- try to do more than just maximize profits, try to do good for society
- have to follow laws of countries they are operating in but CSR goes above and beyond the laws
examples of CSR policies
- be conscious of impacts to the environment
- adhere to fair employment practices
- contribute to communities via volunteer or charitable work
advantages of CSR
- drives innovation as a business develops products and systems to be socially responsible
- attracts costumers to buy nproducts and increase sales
- strengthens brand image
- attracts employees and investors
- has favorable tax advantages and government grants are available
disadvantages of CSR
- costly and time consuming
- must do as they say. if businesses do not meet their ethical standards, it damages brand image
- can lead to conflict with some stakeholders who might see profits reduced by ethical objectives
