IB Business and Management 1.3 – Organisational Objectives

Learning Outcomes Explain the importance of objectives in managing an organisation Explain the purpose of mission and vision statements Analyse the role of vision and mission statements in an organisation Distinguish between Objectives, strategies and tactics and discuss how these interrelate Evaluate the need for firms to change objectives in response to changes in the internal and external environment (HL)

In a nut shell…..

Task….. In pairs Write your answer to the IB exam question: Define the term ‘objective’ [2] Remember what you need to do in order to gain the full 2 marks in a definition question

What is an objective? An objective is a target or goal. This is a desired result that a person or group of people envisage, plan and commit to

Personal Objectives Objectives are not restricted to businesses, many individuals set objectives too….. Examples of types of objectives: Weight loss Grades Saving money Can you think of any others?

Objectives Should be SMART What does SMART stand for? Specific Measurable Agreed Realistic Timed

Are these objectives SMART? To lose 15kg within 2 weeks To save $600 dollars within the next year To achieve at least 4 grade 7’s in the IB in June To get fitter by Christmas

Task – 2 minutes Write 2 SMART objectives for yourself

BUSINESS OBJECTIVES

Hierarchy of Objectives….. Corporate Aims Strategic Objectives Tactical/Operational Objectives Individual Objectives Why do the arrows flow in this direction?

Task Open the document ‘The Differences between Strategic and Tactical Objectives’ Drag and drop the descriptors into the right side of the table.

Types of Strategic Objectives Profits Liquidity Revenues Market Share Repeat customers Brand Recognition Customer Satisfaction Growth Shareholder value Return on Investment Environmental Ethical

Task - As you know, tactical objectives are set at departmental level. Write a list of the types of tactical objectives that might be set by each of the following departments: – Production/Operations – Finance – Human Resources – Marketing

ACHIEVING OBJECTIVES

Achieving Objectives Corporate Aims Strategic Objectives Tactical/Operational Objectives Individual Objectives Achieved using Tactics Achieved using Strategies

Importance of Objectives…. Why are Objectives so important? Measure and Control Motivate Direct Aid Decision making

VISIONS AND MISSIONS Let’s rewind….. What do businesses need to do before they can write meaningful objectives……

Vision Vs Mission Vision Future based Answers the question ‘Where is the business going?’ Focus on the long-run Is inspirational and should shape strategic decision making Mission Based in the present A declaration of the core values of the company Answers the question ‘Why does the business exist?’ Communicated to internal and external stakeholders

WHOSE VISION????

“Our vision is to be earth's most customer centric company; to build a place where people can come to find and discover anything they might want to buy online.”

‘Our goal is to build great mobile products that enable billions of people worldwide to enjoy more of what life has to offer. Our challenge is to achieve this in an increasingly dynamic and competitive environment.’

‘To be the worldwide leader in sharing delicious tastes and creating joyful memories.’

Who’s mission? Our mission is to be the world's premier consumer products company focused on convenient foods and beverages

Who’s mission? To organize the world‘s information and make it universally accessible and useful.

Who’s mission?

to enable people and businesses throughout the world to realize their full potential.

Who’s mission? Our mission: to inspire and nurture the human spirit – one person, one cup and one neighbourhood at a time.

Who’s mission? To bring inspiration and innovation to every athlete* in the world. *"If you have a body, you are an athlete."

Who’s mission? To give people the power to share and make the world more open and connected.

Task – Lets be creative Pick a company from the ones below. Can you write a mission statement for them? Try to be inspirational

Task…. What are the key benefits to a business of having a vision and mission statement? Why are there critics of vision/mission statements?

Homework Task Research and find mission statements for 3 different businesses. Try to find concise and unusual mission statements Next lesson you will read them out and we will guess which company they come from

AIMS AND OBJECTIVES

Ethical Objectives Businesses often have additional moral objectives which they may develop into an ethical code of practice. These may refer to impacts on: Environment Consumers Suppliers Workforce

Ethics and Profits High Ethical Standards Good Consumer Image Consumer loyalty Cost Cuts Staff Motivation Improved Staff Morale High Sales and Profits

Draw backs of behaving ethically Compliance Costs Reduced Profits Stakeholder conflict

Marks and Spencer A Case Study in Ethics

Corporate Social Responsibility Socially Responsible Firms are those that act morally toward their stakeholders This may be due to a desire to be ethical or a fear of negative publicity It can often provide firms with a competitive advantage

Examples of CSR Activities Community work Practising Fair trade Supporting Charities Environmental policies Investing in employees

From Co-operative Bank Website

Task - McDonalds Research using the McDonalds Website Summarise what CSR activities McDonalds undertakes

What is Social Auditing? Social auditing is a process that enables an organisation to assess and demonstrate its social, economic, and environmental benefits and limitations. It is a way of measuring the extent to which an organisation lives up to the shared values and objectives it has committed itself to. Social auditing provides an assessment of the impact of an organisation's non-financial objectives through systematically and regularly monitoring its performance and the views of its stakeholders. Social audits are generated by the organisation themselves and those directly involved. A person or panel of people external to the organisation undertakes verification of the social audit's accuracy and objectivity

Arguments against CSR Some theorists (Milton Friedman for example) say that a business’ only responsibility is to maximise profit Is it the government’s job to be socially aware? Should a business only be socially responsible as long as it generates the maximum profit?