1.3 Organisational Objectives Flashcards
Vision statement
> Written expression
Organisation’s long term ambitions for the future
Optimistic view of what the organisation wants to accomplish
Mission statement
> Written expression
Organisation’s purpose and reason for being
Seen as means of accomplishing the organisation’s vision
Vision statement for internal stakeholders
Inspires and motivates all stakeholders
Vision statement for external stakeholders
Binds them to the business by giving sense of shared beliefs
Mission statement for internal stakeholders
Provides a mean for accountability by identifying KPI’s
KPI’s - Key performance indicators (SMART Objective)
> Specific
Measurable
Time-bound
Attainable
Relevant
Mission statement for external stakeholders
Measures how successful a business is to fulfil the vision
Define business objectives and purposes
> What a business is trying to achieve by leading individuals and business in the right direction
Minimises confusion
Accomplishes a longer-term company vision
Measures business overall success
The 4 common business objectives
Growth, profit, protecting shareholder value, ethical objectives
Business objective: Growth
> Essential for survival of business in changing and competitive world
Measured: Increase in sale revenues or market shares
Business objective: Profit
> Incentives for entrepreneurs to take risks in running a business
Justifies the existence of a business
Measured: Net income - expenses
Business objective: Protecting shareholder value
> Generating long term value for owners of business
About earning a profitable and sustainable return for shareholders
The result of the business strategy pursued by the director
Ethical objectives
> Moral principles that guide decision-making + business strategy
Guides organisations to employ a morally right way of function
E.g. equal treatment of employees, utilising sustainable materials that are more expensive
Strategic Objectives
> Long term goals an organisation wants to achieve
Used to achieve overall vision
Strategy = overarching plan
Tactical Objectives
> Short term specific goals in an organisation
Delegated to lower hierarchy employs
Tactics = individual steps to achieve strategies
