Aims, objectives and vision

Vision and values A vision is a motivating summary of what an organisation hopes to achieve. It links the objectives with the core values of the business Values are a set of ethical or operating principles and beliefs that guide decision making

Aims Aims are the long term goals of an organisation “to ensure customer satisfaction” “to deliver shareholder value”

Objectives Objectives are medium term targets that act as stepping stones to achieving the aims “to achieve a return on equity of 16%” “to increase profits by 10% in 2012”

Aims and objectives Aims and objectives often relate to: Survival Profit Growth Providing a service Market share Customer satisfaction Ethics and sustainability

Changing objectives Organisations may change their objectives over time because... They may achieve their original objectives The business has grown The competitive environment changes The market changes Technology changes

Conflicting objectives Some objectives may conflict. For example: Profit and growth - expansion can increase costs, especially in the short term Providing a service and growth - smaller firms may know their customers better than large firms and therefore be able to provide a more personalised service

Purpose of aims and objectives To provide direction for the organisation To form a basis for allocating resources To be motivational To monitor performance To measure success

Setting objectives The objectives that organisations set will depend on several factors: The overall aims Analysis of business performance e.g. SWOT analysis Ownership – public sector objectives are more likely to focus on providing a service whereas private sector firms may focus on profit and growth

SMART objectives SMART objectives make it easier to assess if targets have been met S pecific M easurable A chievable R elevant T ime-framed For example... To achieve a 5% reduction in labour turnover in 2011 compared to 2010

Strategy A strategy is a long term plan by which the aims and objectives are met. Strategic decisions are usually taken by senior manager, have long term implications and may affect a whole organisation.

Tactics Tactics are the shorter term activities that a firm puts in place to implement its strategy. Tactical decisions are often made by middle managers.