Organizational Objective

1
Organizational Objective

• Unit 1.3

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Importance of Objectives

• Setting a target is Vital to Business
• Organizational aims and objectives are set for
  several reasons
• They serve to give businesses a sense of
  direction, purpose and unity.
• They form the foundation for business
  decision-making.
• They can help to encourage strategic thinking.
• They provide the basis for measuring and
  controlling the performance of the workforce, the
  management of the whole business.

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Importance of Obj. (Cont. )

• Objectives can be set at several levels
• Corporate objectives deals with the whole
  organizations goals
• Ex. Business survival, Growth and Profit
  maximization
• Departmental Objectives specific objectives for
  the various sections of a business.
• Consistent with corporate objectives
• Individual Objectives- targets that are set for
  and/or by individual employees.
• Ex. Performance Appraisal

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Aims / Objectives

• Aims the general long term goals of an
  organization
• Often expressed within the mission statement
• Ex. Aim for the stars.

• Objectives are short term

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Short Term /Long Term

• Short Term goals can be achieved within a short
  time frame.
• Ex. One day, one week or one month
• Ex. Passing the Biology Chapter Exam next week.
• Long Term Goals can be achieved with a longer
  time frame.
• Ex. one semester, one year, five years, or twenty
  years
• Graduation is considered a long term.

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Mission / Vision

• Mission- have a clear purpose
• Mission Statement a simple declaration that
  broadly states the purpose for the business.

• Vision have an image of an Ideal situation
• Vision Statements outlines where a business
  wants to be in the future

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Differences

• Vision Focus on the very long term goals.
• Mission focuses on the medium to long term goals.
• Mission statements are updated more frequently.
• Vision statements do not focus on a particular
  target. Show what could be possible.
• Mission highlights the values of the business.

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Short Term /Long TermObjectives

• Strategies is used to refer to any plan or
  scheme to achieve the long term aims of a
  business. (strategic objectives)
• Tactics are used as short term ways to achieve
  aims and objectives.

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Levels of Strategy

• Operational day to day methods used to improve
  the efficiency of an organization.
• Ex. Restaurant looks a way to reduce wait time
  and maintain quality
• Generic are those that affect the business as
  a whole.
• Corporate aimed at the long term objectives of
  a business
• Ex. Mergers and Acquisition

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Tactical (Operational) Objectives

• Tactical Obj. Short Term objectives that
  affect a segment of the organization, such as a
  department
• Survival tactical objective for many businesses
• Sales Revenue Maximization business strive to
  maximize sales in order to establish themselves
  in the market

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Strategic Objectives

• Refer to the long term aim of a business
  organization.
• Ex. What to target in the coming years?
• Types of Strategic Objectives
• Profit Maximization number one objective to
  obtain a large amount of profit.
• Growth seen by the increase of sales or by
  market share.
• Economic of Scale Bulk size purchases for less
• Market Power - Being the biggest business in the
  nation causing a monopoly
• Reduced Risk Working with foreign markets

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Strategic Objectives (Cont.)

• Image and Reputation - comments and ads, and
  media setting whether a business is decent
• Market Standing extent to which a firm has
  presence within a marketplace
• Ex. Microsoft has the market for computer
  software
• Ex. Wal-Mart largest employer in the United
  States

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Ethical Objectives

• Ethics the moral principles that guide
  decision-making and strategy
• Morals concerned with what is wrong and right
• Ethical Objectives
• Reducing pollution by using environmentally
  friendly production processes.
• Increase of recycling waste material
• Offering sufficient rest breaks during their
  work shift
• Fairer conditions of trade with less economic
  developed countries

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Unethical Behavior

• Financial Dishonesty
• Environmental neglect
• Exploitation of the workforce
• Exploitation of Suppliers
• Exploitation of consumers

Advantages of Ethical Behavior

• Improved corporate image
• Increased customer loyalty
• Cost Cutting
• Improved staff motivation
• Improved Staff Morales

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Social Responsibility
Advantage

• Providing accurate information and labeling
• Active Community work
• Having Consideration for the environment
• Adhering to fair employment practices

Disadvantages

• Compliance Cost
• Lower Profit
• Stakeholder Conflict

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Corporate Social Responsibility (CSR)

• CSR - Businesses that act morally towards their
  stake holders
• Roles of businesses in delivering social
  responsibility
• Free Market(or non-compliance)
• Economic belief that profit generates for the
  owner
• Altruistic
• To act in an unselfish and humanitarian manner
• Strategic
• Belief that a businesses needs to be socially
  responsible if necessary to gain a profit

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Social Auditing

• Social Auditing independent assessment on the
  affect on society
• Environmental Auditing examines the affects on
  the environment
• Policy may include
• Renewable and sustainable resources
• Reputable and social responsible supplier
• Systems that cater for well being of employees
• Establishment of ethical code of conduct
• Methods to monitor management and employee

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Organizational Strategies

• S Specific Needs to be precise
• M- Measureable - Quantifiable
• A Agreed Accepted and understood
• R Realistic - Has to be obtainable
• T Time Constrained Set Time Frame

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Vocabulary

• Aims are the long-term goals of a business,
• Corporate social responsibility (CSR) refers to
  the consideration of ethical and environmental
  issue relating to business activity.
• Ethics are the moral values that determine and
  affect business behavior and decision-making
• Mission statement refers to the declaration of an
  organizations overall purpose.
• SMART Objectives mean that well-set objectives
  ought to be specific, measurable , agreed,
  realistic and timed.

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Vocabulary (Cont.)

• Social audit refers to an independent assessment
  of how an organizations actions affect society.
• Social responsibility refers to a business being
  conscientiously concerned about the well-being
  of the general public as a whole.
• Strategy refers to the various methods that
  businesses can use in an attempt to achieve their
  mission or vision.
• Tactics refers to the short-term methods that
  firms can use to achieve their objectives.
• Vision statement refers to an organizations
  long-term aspirations

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Review Questions

• What are the objectives important to business
  organizations?
• What is the purpose of a mission statement?
• How do mission statements and vision statements
  differ from one another?
• Differentiate between strategic objectives and
  tactical objective.
• How might objectives of organizations in the
  public sector differ from those in private
  sector?
• When might survival be an important
  organizational objective?

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Review Questions

• What are internal and external factors affect
  changes in organizational objectives?
• Why might a business consider the objectives of
  the local community in which it operates?
• What is social auditing and why might a
  business choose to carry out a social audit
  despite the cost of doing so?
• What does it mean to get SMART objectives?
•  

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Higher Level Review Questions

• Why do objectives have changing significance in
  different situations?
• Outline two recent changes in the societys
  expectations of business behavior.