Business Objectives

DO NOW Introducing the Topic page 56 Business Studies book, answer all questions.

SMART objective What are your goals? What are your objectives? Are they SMART? Specific Measurable Achievable Realistic and Relevant Time Specific

Activity Johnson Automotive is a newly formed business and are unsure about setting business objectives, they have come to you for some business advice. You are required to set a SMART objective for Johnson Automotive. (15mins)

Hierarchy of objectives AIM MISSION STATEMENT CORPORATE OBJECTIVES DIVISIONAL OBJECTIVES DEPARTMENTAL OBJECTIVES INDIVIDUAL TARGETS

Aim Overall long-term goals which a business hopes to achieve. The starting point for the entire set of objectives on which effective management is based They can develop a sense of purpose and direction They allow an assessment to be made They provide a framework

Mission Statement “A statement of the business’s core aims, phrased in a way to motivate employees and to stimulate interest by outside groups” King’s College Mission Statement ‘We aim to provide excellence in teaching and learning within a well-balanced educational context involving the academic, cultural, social, physical, emotional and spiritual dimensions of life’

Mission Statement - Activity You are required to write a mission statement for this year, make sure that it’s the same sort of structure as a Businesses Mission Statement. (15 mins)

Homework Activity 4.1 page 60 Business Studies Text Book – 1-3 Blog Duty –Student to discuss today's lesson, others to check and comment

DO NOW Homework out for inspection what is your Mission Statement?.

Mission Statements “It is the Mission of Advance Auto Parts to provide personal vehicle owners and enthusiasts with the vehicle related products and knowledge that fulfill their wants and needs at the right price. Our friendly, knowledgeable and professional staff will help inspire, educate and problem-solve for our customers” “Guided by relentless focus on our five imperatives, we will constantly strive to implement the critical initiatives required to achieve our vision. In doing this, we will deliver operational excellence in every corner of the Company and meet or exceed our commitments to the many constituencies we serve. All of our long-term strategies and short-term actions will be molded by a set of core values that are shared by each and every associate“

Business Objectives Video Do you agree with him? What other objectives should we have?

Corporate Objectives Specific targets based upon the aim and mission Profit Maximization – the greatest difference between cost and revenue. (seems the most rational objective) Issues more competitors enter market. To increase market share you often have to sacrifice profit. Environmental and Employee concerns often impact on decisions leading to less profit.

Corporate Objectives Profit Satisficing – Earning enough profit to keep the owners happy and to give them a comfortable life. (common in small businesses. Growth – the business expands and makes more money, resulting in economies of scale and increased benefits for employees.

Corporate Objectives Increasing Market Share – being the leader in your market the consumers choice ie Coke. Survival – Very common in the early years of business.

Corporate Objectives Corporate Social Responsibility – Businesses who consider the issues of society to be important. Most businesses now have sustainability procedures and work within the community as it is good for there image, and future sales. Ie Cadbury chocolate is now fair trade.

Corporate Objectives Maximizing Short term sales revenue – not common as often you have to reduce prices to make more sales or increase advertising which eats away at your profit margin. Maximizing Shareholder Revenue

Reuters Achieving its Aims Activity 4.2 page 62 all questions

END OF UNIT TEST AS BUSINESS FRIDAY 11 th March 2011 (This Friday) Topics – Enterprise, Structure, Size and Objectives 5 Short Answer Questions 28 Marks (one 8 mark question)

Conflicts between Corporate objectives Growth VS Profit – profit can be sacrificed to increase sales. Short Term vs Long term – buying new machinery or developing new products will result in a short term loss for a long term gain. Stakeholder Conflicts.

Changes to objectives Economy might change (recession) resulting in a change of objectives. New business moving out of survival mode.

Homework Study for Mid unit Test tomorrow

DO NOW list three common corporate objectives.

Factors that determine objectives Corporate culture – A code of behavior and attitudes that influence the decision making of managers. The size and Legal form of a business – A small business may be concerned with making enough profit to be comfortable where as a large organization may want increased market share.

Factors that determine objectives The Number of years the business has been operating – Survival vs Making Profit

Hierarchy of objectives AIM MISSION STATEMENT CORPORATE OBJECTIVES DIVISIONAL OBJECTIVES DEPARTMENTAL OBJECTIVES INDIVIDUAL TARGETS To maximise shareholder value To increase profits of all divisions by 10% per year Within one region, to increase market share by 10% and cut overheads by 5% E.g. Marketing: increase profit margins by 7% E.g. in marketing department: - Increase sales by an average of 5% per client - Introduce 5 more clients to the business each year

Business Ethics - Video

Who Should survive Activity Business Ethics Why did you make the decision you did?

Business Ethics The moral guidelines that determine decisions made. Ie Sweat shops in China Bribes for buying off a supplier Gifts in exchange what is crossing the line? Palm Oil – the Cadbury saga

Business Ethics Being ethical can add to business costs, ie fair trade chocolate Loss of sales if bribes are not taken Being ethical often means more trust from customers and therefore greater loyalty. You will get publicity for acting ethically.

Homework Case Study page 69 questions 1-3 Business Studies Text Book