1. Handout 6: Organisational objectives
PowerPoint presentation
Unit 320 (B&A 59): Principles of business
Handout 6: Organisational objectives

2. Organisational objectives
Long-term aim objectives
Objectives targets
These targets may be in terms of:
profit
quality of service
efficiency
development/expansion
change/crisis management.
An organisation sets a long-term aim - where it would like to be in the future.
It then sets objectives in order to establish its direction and achievement of its aim.
These objectives are then translated into targets.
Objectives that feed into the achievement of the overall aim may be set at corporate level (whole organisation), departmental level and individual employee level.
Every single member of staff needs to be aware of the organisation’s objectives and to understand their own roles and responsibilities in achieving them.
Individuals need to understand their own importance and the vital role they have to play and also to be aware of the consequences of not doing a good job and the impact that it can have.

3. Factors that contribute to an organisation’s objectives
Economic sector
Type
Stakeholders
Size
Objectives are likely to be:
directional – eg market leadership
performance related – eg growth in profit, length of waiting lists
internal – eg efficiency of operation
external – eg social responsibility, corporate image.
Economic sector – public, private or not for profit.
Type – the industry sector; whether the organisations offers a service, makes a product, sells the products.
Stakeholders – there may be public shareholders to satisfy.
Size – national/multi national, partnership, limited company, etc

4. Objectives of different types of organisation
Private sector – focus on the customer and increasing business
Public sector – concentrate on the service they offer
Not-for-profit sector – focus on maximising aid to their cause
Private:
As they exist to make a profit, their objectives will focus on increasing sales, becoming the market leader.
Public:
The main objectives of any organisation in the public sector is to provide efficient and effective public services, whilst carrying out government policy and complying with legislation.
As they are funded with public taxes, they must provide the best value for money services.
Not-for-profit:
They exist to raise funds and give help to a cause and their objectives will point to this.

5. Mission and vision statements
Vision statement – long-term aspirations
Mission statement – broadly states the organisation’s goal
The purpose of a mission statement is to ensure employees and customers are aware of the organisation's purpose, ethics and goals.
It is used not only to paint a picture of its values to customers, but also to motivate and create a cohesive staff.
Mission statements

6. Mission statement
Comes down to primary goals and timelines.
Each type of company has a way of defining success through business goals, and the strategies put into place to achieve those objectives.
A sales-driven firm tends to think about these strategies and objectives in the short term, while a market-driven firm views its goals as long-term benchmarks.

7. Example private sector mission statement
‘To enable people and businesses throughout the world to realize their full potential.’
Microsoft

8. Example not-for-profit mission statement
Greenpeace is the leading independent campaigning organization that uses peaceful protest and creative communication to expose global environmental problems and to promote solutions that are essential to a green and peaceful future.

9. External forces that impact on organisations
Political
Economic
Sociological
Technological
Environmental
Legislative
Political, eg Government tax policy, labour law, environmental law, trade restrictions, tariffs and political stability.
Economic, eg economic growth, interest rates, exchange rates and the rate of inflation.
Sociological, eg cultural and health aspects, population growth rate, age distribution, career attitudes and emphasis on safety
Technological, eg research and development activity, automation, technology incentives and the rate of technological change.
Environmental, eg weather, climate, and climate change, and the potential impacts of climate change.
Legislative, eg discrimination law, consumer law, anti trust law, employment law, and health and safety law.
The way that organisations respond to these forces will have a direct impact on its success.
The different forces may have a greater or lesser effect depending on the organisation type, but may require organisations to respond by restructuring, modifying their strategy, activities or focus.
An analysis to show how these different forces affect different types of organisations at different times and the difficulties involved in their responses to them is known by the acronym PESTEL.
A PESTEL analysis sets out, usually in table or diagram format, the factors affecting the organisation under those seven headings in order to analyse or monitor the external marketing environment.
It is a useful strategic tool for understanding market growth/decline, business position and operations potential and is often used by organisations to assist them in building their vision of the future. 9

10. A useful strategic tool, used to analyse:
PESTEL analysis
A useful strategic tool, used to analyse:
how these different forces affect the organisation at different times
the difficulties involved in their responses to them.
The way that organisations respond to these forces will have a direct impact on its success.
The different forces may have a greater or lesser effect depending on the organisation type, but will require organisations to respond by restructuring, modifying their strategy, activities or focus.
It sets out in table or diagram format the factors affecting the organisation under those six headings in order to decide whether they can be considered positive or negative – to the organisation’s advantage or disadvantage.
It is a useful strategic tool for understanding market growth/decline, business position and operations potential and is often used by organisations to assist them in building their vision of the future. 10

11. Example PESTEL analysis
Political
Economic
Sociological
Technological
Environmental
Legislative
VAT rate
Inflation
Population growth
Emerging new technology
Sustainability
Consumer protection
General elections
Exchange rates
Changing tastes
Energy costs
Waste regulations
Health & safety
Employment law
Unemploy-ment levels
Attitudes to work
Increase in Internet use
Political stability
Interest rates
Mobile phone/app use