1.3 Organizational Objectives Flashcards
what is a mission statement?
is where an organization formally sets out and publicizes its core objectives
what is a vision statement?
is where an organization sets out where it would like to be in the long term based on its core objectives
what are the aims of vision and mission statements?
- give strategic decision-making an overall sense of direction
- provide employees & managers with a sense of strategic direction of the business
- motivates employees & managers within the business & provide them with a reference point for their own aims and values
- attract outside stakeholders such as customers, banks, and investors to an organization
what’s the difference between a mission statement and a vision statement?
a mission statement is an inspiring statement that provides the stakeholders with the business’s purpose and what it wants to achieve in the future. On the other hand, a vision statement is a more concrete and tangible statement of what the business wants to do now.
what are the common business objectives?
Survival/ Breakeven Cost minimization Growth (market share) Profit maximization Profit satisficing (achieve enough profit to make the owner happy but not making a maximum profit)
Define aim, objective, strategy, and tactics.
Aims: long-term goals that a business wants to achieve in the future
Objectives: targets set by an organization to achieve its corporate aims
Strategy: the long-term plan that sets out the ways a business is going to achieve its corporate aims
Tactics: the specific techniques used by a business to archive its objectives
List reasons as to why businesses might change their objectives:
- Internal changes in ownership and management
- A business may have satisfied the survival objective and now needs to pursue objectives of growth to increase profits
- Political change: government policy and laws
- Economic change: the economy fluctuates
- Social change: consumer tastes and preferences
- Technological change: advances in technology
define what an ethical objective is.
it’s a business objective influenced by moral values. Reflect ethical positions and moral issues of stakeholders.
define corporate social responsibility (CSR).
is where the organization considers the interests of society by taking responsibility for the effects their decisions and activities have on customers, employees, communities, and the environment.
list advantages of CSR:
- drives innovation as a business develops products and systems to be socially responsible
- attracts consumers to buy products and increase sales
- strengthens a business’s brand image
- attracts employees and investors
- has favorable tax advantages and government grants are available
list disadvantages of CSR:
- it can increase costs ($$$)
- if businesses do not meet their ethical standards, it damages brand image
- it can lead to a conflict with some stakeholders who might see profits reduced by ethical objectives
what are some examples of objectives?
- reducing pollution by using more environmentally friendly production processes
- disposal of waste in an environmental manner
- increased recycling of waste materials
- offering staff sufficient rest breaks during work
- fairer conditions of trade with less economically developed countries
what are some examples of unethical behavior?
- financial dishonesty
- environmental neglect and damage
- exploitation of the workforce
- exploitation of suppliers
- exploitation of consumers
how can businesses adapt to their social responsibilities?
- providing accurate information and labeling
- adhering to fair employment practices
- having considerations for the environment
- active community work such as sponsoring or participating in local community events
what is SWOT analysis?
a planning tool used by organizations as a method for guiding business strategy by considering the Strengths, Weaknesses, Opportunities, and Threats the businesses faces.
internal and external influences:
strengths and weaknesses are internal to a business
opportunities and threats are external influences on an organization
define strengths:
- quality of the goods or services provided
- skills of the workforce
- investment in the latest technology
- efficiency of production methods
- strength of an organizations leadership
define weaknesses:
- manufacturing problems with the product
- difficulties in motivating employees
- outdated machinery
- inefficient production methods
- conflict within management
define opportunities:
- growth in the economy and market
- technological advances in the product it sells
- reduced regulations in the market
- change in the taste of consumers that favors its products
- positive media reports about the market the product is sold in
define threats:
- an economic recession and declining market
- political instability
- technological advances from its competitors
- increased regulation in the market
- bad publicity relating to the market where the product is sold
what is ANSOFF MATRIX?
it’s a tool used by management to develop a marketing plan by considering growth strategies related to the products the business sells and the market it operates in.
list 4 ways to grow:
- selling more of what a firm already sells to existing costumers
- Entering new markets with existing products and/or services
- producing new goods or services
- selling new goods and services to new customers
what are the four categories?
- market penetration
- product development
- market development
- diversification
what is market penetration?
selling more goods and services to existing customers, by doing what it already does but better
how is market penetration achieved?
- increasing brand loyalty
- differentiate products by creating USP- unique selling proposition
- persuade existing customers to use the product more frequently
- encourage customers to use more of a product at a time
what is product development?
is marketing new or modified products to existing markets
what is market development?
it involves marketing (selling) an existing product in a new market.
what does diversification mean?
selling new products and services to a new market. marketing a new product. this is the riskiest growth strategy because it involves the greatest change for the organization.
list the strengths of ANSOFF MATRIX:
- clearly sets different growth strategies
- sets out the different approaches needed for different strategic directions
- gives some assessment of risk associated with a strategy
- can be presented in an understandable way to different stakeholders
list of weaknesses of ANSOFF MATRIX:
- only considers two main factors in the strategic analysis of a business option
- difficult to apply the model too complex strategic decisions
- judgements about risk are difficult to forecast accurately
- statistic model that does not adjust for changes in the business environment
