U1- Objectives Flashcards
Why do organisations set objectives?
These strategic objectives give the organisation goals or targets to work towards
What are possible objectives of a public sector organisation?
To provide the best service
To stay within budget
What are possible objectives of a private sector organisation?
To maintain or maximise sales
To make a profit
What are possible objectives of a third sector organisation?
To raise awareness
Increase donations
Give 3 possible objectives of businesses
Corporate social responsibility (CSR)
Profit maximisation
Growth
Why may objectives change over time?
As the business responds to change in its environment.
In times of austerity in the private sector organisations make decide to keep their prices low or they may reduce the quality of the product to maintain profitability
What is profit maximisation?
This means making as much profit as possible. Can be achieved through charging high prices and keeping costs as low as possible
Competition and the need for growth and development may make this difficult
This is a key objective, every business wants to be successful
What are the factors to keep in mind with regards to profit maximisation?
Higher profits will attract more investment
Seen as a sign of success for the business
High prices may attract negative publicity
Lowering costs could affect the quality
High profits may attract higher pay claims
High profits may attract competiton
What is satisficing?
This means ensuring the stakeholders of the business are happy with the way it operates
Give some examples of satisficing
Shareholders are happy with profits
Managers avoid unnecessary risk
Employees are happy with pay and conditions
Customers are pleased with the service
Government is satisfied the business is meeting all legal requirements
Name 5 managerial objectives
Profit maximisation
Social/ ethical responsibility
Survival
Growth
Sales/ revenue maximisation
Why is social/ ethical responsibility desirable?
The business wants to present a positive image to the community and gain more customers
Why would managers want the business to grow?
To increase their own salary, benefits or importance
This can conflict with the objectives of the organisation
What is a mission statement?
It summaries the strategic aims of the business
It can be released to the press to help market the business and its products, and issues to all employees and other stakeholders
Give 6 features of a mission statement
Shows the business has plans for the future and how these plans will impact stakeholders
May contain information on how the business will treat shareholders, environment and consumers
Can be motivating as it provides direction
Reassure shareholders and customers which will lead to greater success
Provides the opportunity to improve the business reputation
Can attract high quality candidates in the recruitment process
