business goals - term 2 Flashcards
what are business goals
Agoalis a desired outcome (target) that an individual or business intends to achieve within a certain time frame.
Success in achieving business goals is often determined by the amount of planning. Detailed planning increases the likelihood of successfully achieving business goals.
what are SMART business goals?
specific, measurable, achievable, realistic, timebound
what does specific mean (smart goals)
Goals should be straightforward and emphasise what the business wants to happen.
what does measurable mean (smart goals)
Decide on goals whose progress can be measured so the business owner can see the change occur. This helps the business stay on track.
what does achievable mean (smart goals)
Goals need to be challenging but not be too far out of the business’s reach, otherwise the business owner and employees will become unmotivated due to the lack of success.
what does realistic mean (smart goals)
The goals must represent something that the business owner and employees are both willing and able to work towards.
what does timebound mean (smart goals)
The goals must have deadlines and sub-deadlines attached to them, otherwise the commitment is too vague.
what is the importance of goals (SMMC)
Serving as targets
Measuring sticks
motivation
commitment
Serving as targets (importance of goals)
With goals, managers at all levels would find it easier to make coordinated decisions because they understand what the business is trying to achieve.
measuring sticks (importance of goals)
specific goals act as abenchmarkagainst which the business can measure its performance — that is, the actual outcome is compared with the planned goal.
motivation (importance of goals)
Good quality goals represent a challenge — something to aim for. They act as a motivating force. Employees will gain satisfaction when they successfully achieve a challenging goal. Goals also provide managers with a basis for rewarding performance, which in turn acts as a motivator.
commitment (importance of goals)
Getting an employee to agree to achieve a goal — or better still, having the employee participate in the goal-setting process — gives that employee a personal stake in the success of the business
what are level goals and objectives
strategic goals, tactical objectives, operational objectives
(review diagram in workbook and on connect)
strategic goals (level goals and objectives)
- determined by senior management
- broad aims
- long term (years)
- applied to a business as a whole
tactical objectives (level goals and objectives)
- determined by middle management
- specific aims
- mid-term (months)
- necessary to achieve the businesses strategic goals
operational objectives (level goals and objectives)
- determined by front line management
- specific aims
- short-term (days/week)
- necessary to achieve tactical objectives and strategic goals
what is market share
- refers to the business share of the industry expressed as a percentage
- it is calculated by dividing a businesses sales from the market by the total sales of ll businesses in the industry
what is growth
Internal growth:
- could involve employing more people, increasing sales and establishing more outlets
External growth:
- achieved by merging or acquiring other businesses
merger = combining two businesses to get more market share and to get more clients
Acquisition = where one business buys another business because they think their successful business will be able to expand successfully by acquiring another business
What is Share price
companies need to maximise the returns of their shareholders which is achieved by keeping the share price rising allowing the company to pay healthy dividends
social
businesses can develop social goals and adopt strategies benefiting the community while achieving financial goals
community service: businesses can sponsor sport teams or local schools wich will give back to the community whilst they advertise the sponsoring allowing for marketing
provision of employment: small businesses can hire locally benefiting community society
social justice: ensure employees and other community members are treated equally and fairly
environmental
businesses should consider their impact to the environment to create awareness within society
- businesses are adopting practices of ideas that are environmentally friendly these businesses adopt a new attitude to developing products and ideas that are sustainable
- sustainable development refers to how society and businesses are developing ensuring sustainability
achieving business goals
- business managers have a range of goals because they have a range of different stakeholders who have different needs
- thus in practice, most business managers have a mix of goals
- for managers however, its not always easy to get the right balance of goals
- sometimes managers see conflict in these goals
achieving a mix of goals
achieving an increase in market share may only be achieved at the expense of maximising profits in the short term it may require extensive advertising which increases expenses this lowering profits untill more products are sold
impacts of staff involvement
- staff involvement employees in the decision-making process and giving them the necessary skills and rewards
- employees can share the same vision
- employees who work in successful businesses actively work towards the success of the business
list the different ways managers can involve staff in order to achieve business success (MMIT)
Motivation
Mentoring
Innovation
Training
importance of innovation (MMIT)
Business can obtain competitive advantage if it innovates successfully
Increase levels of employee engagement and job satisfaction
Develop new products – leading to increased revenue
Strategy to achieve innovation (MMIT)
rewards given to employees with innovative ideas that become profitable
a trustful management that does not excessively control — micromanage — people
sufficient financial, management, human and time resources to achieve goals
importance of motivation (MMIT)
Motivated staff increases morale and business productivity
Overall success of the business largely depends on motivated and skilled employees who are committed to its goals
Decreased costs associated with high staff turnover
strategies to achieve motivation (MMIT)
Offer training
Delegate responsibility
Make clear expectations
Communicate regularly with staff
Monetary benefits (bonuses)
Provide interesting work
Show respect and courtesy
Recognise achievements
importance of mentoring (MMIT)
it ensures access to mentors for all employees, regardless of levels of experience, backgrounds, gender or ethnicity
it assists with the training and development of all employees
provides career and psychological support
helps strengthen their dedication and commitment to the firm
Strategy for mentoring (MMIT)
Train mentors to ensure they can effectively teach and guide new staff
Develop mentoring program by offering tutoring, coaching and modeling acceptable behaviour.
Importance of training (MMIT)
improves employee productivity
Employees participate more effectively in work teams
Workforce can adapt to a rapidly changing technological environment more effectively
Increases possibility of staff gaining promotion and therefore their commitment to the business is greater
Strategies to achieve training
- send employers to appropriate conferences and seminars
- develop an informal on-the-job training program for new staff
