1.3 Organisational objectives Flashcards
Vision statement
outlines an organisation’s aspirations in the distant future
Mission statement
a simple declaration of the underlying purpose of an organisation’s existence and its core values
What are the main differences between vision and mission statements?
- vision statement - “what do we want to become?”
mission statement - “what is our business?” - vision statements are focused on the very long term, whereas mission statements can focus on medium or long term
- mission statements are more frequently updated
- vision statements do not have actual targets that must be achieved; allow people to see what could be
- mission statements outlines the values of the business
What are the steps in setting mission statement?
- define the organisation
- outlines what the organisation aspires to be
- limited enough to exclude certain ventures
- broad enough to allow for growth in a creative or innovative way
- distinguishes the organisation from others
- serves to evaluate current business activities
- phrased clearly so that it is understood by all
Aims
general and long-term goals of an organisation
Objectives
short-to-medium term and specific targets an organisation sets in order to achieve its aims
Why are organisational aims and objectives important?
to measure and control
to motivate
to direct
Strategies
the plans of action to achieve the strategic objectives of an organisation
Tactics
short-term methods used to achieve an organisation’s tactical objectives
What are the several levels of business strategy?
operational strategies - day-to-day methods used to improve the efficiency of an organisation
generic strategies - affect the business as a whole
corporate strategies - targeted at the long term goals of a business
What are some differences between aims and objectives?
aims: what the business wants to achieve; short-term goals that affect a section of the organisation; objectives: what the business has to do to achieve the aims
aims: not time-bound; short-term goals that affect a section of the organisation: time-bound
aims: vague; objectives: specific measurable
aims: what a business wants to happen; objectives: what a business needs to happen
aims: set by senior leaders; objectives: set by managers or subordinates
Tactical objectives
short-term goals that affect a section of the organisation
Examples of strategic objectives
survival
sales revenue maximisation
Strategic objectives
longer-term goals of a business
Examples of strategic objectives
profit maximisation
growth
market standing
image and reputation
Internal factors that cause aims and objectives to change
corporate culture type and size of organisation private versus public sector organisations age of the business finance risk profile crisis management
External factors that cause aims and objectives to change
state of the economy
government constraints
the presence and power of pressure groups
new technologies
Ethics
moral principles that guide decision-making and strategy
Morals
what is considered to be right or wrong, from society’s point of view
Examples of ethical objectives
reducing pollution by using more environmentally friendly production process
disposal of waste in an environmental manner
increased recycling of materials
Examples of unethical behaviour
financial dishonesty environmental neglect exploitation of the workforce exploitation of suppliers exploitation of consumers
Corporate social responsibility (CSR)
moral actions that benefit their stakeholders such as their employees and the local community
What are the three attitudes in CSR?
The self-interest (non-compliance) attitude
The altruistic attitude
The strategic attitude
The self-interest (non-compliance) attitude
in order to gain profit, firms become more efficient and prosperous, thus helping the society indirectly.
The altruistic attitude
humanitarian and unselfish behaviour
The strategic attitude
businesses are only socially responsible to become more profitable; sees CSR as a long-term growth.
How can a business adapt to meet their social responsibilities?
Provide accurate information and labelling
Adhering to fair employment practices
Having consideration for the environment
Active community work
What are the factors that decide whether a business is socially responsible?
The involvement, influence and power of various stakeholders, such as pressure groups
Corporate culture and attitudes towards CSR
Societal expectations
Exposure and pressure from the media
Experience
Compliance costs
Laws and regulations
Code of practice
documented beliefs and philosophies of the business
Advantages of ethical behaviour
Improved corporate image
Increased customer loyalty
Cost cutting
Improved staff morale and motivation
Disadvantages of ethical behaviour
compliance costs
lower profits
stakeholder conflict
ethics and CSR are subjective
SWOT analysis
a tool that helps a business with decision-making.
strengths, weaknesses, opportunities, threats
What can SWOT be used to provide a good framework for?
Competitor analysis Assessing opportunities Risk assessment Reviewing corporate strategy Strategic planning
Advantages of SWOT analysis
Quite simple and quick to complete
Helps to determine the organisation’s position in the market - long-term survival
Encourages foresight and proactive thinking in the decision-making process
Help reduce the risks of decision-making by demanding objective and logical thought processes
Wide range of applications
Disadvantages of SWOT analysis
Simplistic, not too detailed
Business environment is always changing - limited use
Only useful if decision-makers are open about weaknesses and are willing to act upon them
Not typically used in isolation
Ansoff Matrix
An analytical tool which usually aids a business in determining its product and market growth.
What are four alternatives of marketing strategies?
Market penetration
Market development
Product development
Diversification
