MODULE Organisational Objectives IB BM UNIT 1

Corporate Aims & Mission Statements Corporate Aims Broad statements of intent, usually expressed in vague terms, with no time-scale, or precise target that can be easily measured.

Most common commercial business aims concern: Return on investment, profit or sales maximisation. Growth and expansion. Market share, market leadership / domination. Corporate Aims & Mission Statements Corporate Aims

Most common commercial business aims concern: Customer satisfaction, customer loyalty. Quality / value for money. Corporate Aims & Mission Statements Corporate Aims Other aims concern - Image, social responsibility.

Aims of public sector / non profit making organisations: More socially / community orientated. Purpose - to provide protection, support, assistance. Obligations - still to be efficient and provide value. Corporate Aims & Mission Statements Corporate Aims

Public Sector Private Sector  Generate sound return on investment eg Sainsbury’s (PLC)  Be household name eg BT (PLC)  Advance education eg private school. Corporate Aims & Mission Statements Corporate Aims- Examples Profit making to:

Private Sector  Maximise money raised for cause eg Cancer Research (charity)  Advance religion, eg local church (charity)  Relieve poverty eg Barnados (charity) Corporate Aims & Mission Statements Corporate Aims- Examples Non-profit making to:

Private Sector Corporate Aims & Mission Statements Corporate Aims- Examples Non-profit making to:  Maximise employee welfare eg NUT  Conserve environment eg Greenpeace (charity)  Advance education eg Exam board (trust).

Public Sector  Provide a service to the community eg NHS  Expand knowledge / appreciation of area eg libraries (local govt. – municipal undertaking) Corporate Aims & Mission Statements Corporate Aims- Examples

Public Sector  Relieve poverty eg DSS (local government)  Conserve environment eg Dept. of National Heritage (central government) Corporate Aims & Mission Statements Corporate Aims- Examples

Public Sector  Maximise employee welfare eg DFEE (central government)  Advance education eg Dept. for Education and employment (central government). Corporate Aims & Mission Statements Corporate Aims- Examples

Corporate Aims & Mission Statements Corporate Aims- Examples NB Aims of large organisations in private sector may also be to... care for environment, maximise employee welfare,...but these are really subsidiary aims which help to raise their image - support primary aim.

Corporate Aims & Mission Statements Mission and Vision Statements Common in larger organisations who: serve wide variety of markets. cater for wide variety of stakeholders needs.

Corporate Aims & Mission Statements Mission and Vision Statements Describe overall purpose of business aspirations long-term goals/ aims

Corporate Aims & Mission Statements Mission and Vision Statements Should clarify / clearly communicate the following: What business does - main activities. What it hopes to achieve. Key values.

Corporate Aims & Mission Statements Mission and Vision Statements- the differences A mission statement concerns what an organization is all about (in the present). A vision statement is what the organization wants to become (so it is more focused on the future).

These objectives should be far more specific: state specific targets that are needed to achieve aim / mission. Strategic Objectives

Should be S.M.A.R.T. ie Specific Measurable Agreed Realistic Time-scaled. Strategic Objectives

Example: Aim of business - maximise profits / return on investment. Objectives could be: Example: Aim of business - maximise profits / return on investment. Objectives could be: a. increase sales of product x by 10% and / or b.reduce labour costs by 5%, by end March next year. a. increase sales of product x by 10% and / or b.reduce labour costs by 5%, by end March next year. Strategic Objectives

These are specific, measurable, time-scaled. Past performance of business. Current resources. External factors affecting future performance. Are they Realistic? Depends on: Strategic Objectives

Objectives should be agreed by key individuals - more likely to be committed to achieve them. Strategic Objectives

Based on firm’s mission or aims. Concern direction of business as a whole. Often expressed in financial terms eg to make a certain amount of sales, profit, % rate of return / growth. Establish boundaries for departmental objectives.

Departmental/Tactical Objectives Operational objectives. Must be achieved by particular divisions or departments to ensure corporate objectives met.

Departmental/Tactical Objectives Achieve a 10% return on capital employed Marketing: Achieve £50,000 sales per month Human Resources: Secure 95% staff attendance and 100% punctuality figures per month Finance: Gain a 14% average profit margin per month. Production: Reduce production costs by 10% by March Example

Mission statements, aims, objectives, help to: Provide common purpose / sense of direction. Aid motivation, enhance teamwork. Co-ordinate employees’ actions/ activities. Provide common purpose / sense of direction. Aid motivation, enhance teamwork. Co-ordinate employees’ actions/ activities. Role of Objectives and Mission Statements

Objectives, in particular, provide: Role Specific targets to focus on - help to motivate employees. Means of measuring performance - important for control. Driving force for planning - framework for setting strategy. Specific targets to focus on - help to motivate employees. Means of measuring performance - important for control. Driving force for planning - framework for setting strategy.

May be times when business has to change long term goals and concentrate on short term objectives. The Changing Nature of Objectives Age Size & Legal Status Ownership Views of owners / directors / managers Factors influencing objectives:

May be times when business has to change long term goals and concentrate on short term objectives. The Changing Nature of Objectives Consumer tastes Changes in demand Market Political factors Factors influencing objectives:

May be times when business has to change long term goals and concentrate on short term objectives. The Changing Nature of Objectives Legislation State of the Economy Social attitudes Changes in technology Competition Factors influencing objectives:

May be times when business has to change long term goals and concentrate on short term objectives. The Changing Nature of Objectives Availability of finance Ease of implementation Risk Culture Other organisational objectives Factors influencing objectives: