1.3_Organisational_objectives_2023 (5)

1.3 ORGANISATIONAL OBJECTIVES

VISION STATEMENT

• A philosophy, vision, or set of principles guiding the direction and behavior of an organization (GAP).

• Serves as a guide for decision-making within the organization.

MISSION STATEMENT

• Clearly defined statement of a business’s core aims that motivates employees.

• Aims to generate interest from outside groups.

• Can contain elements that reflect the identity and purpose of the company.

PURPOSE AND CHARACTERISTICS OF MISSION STATEMENT

Defining Aspects

• Defines the Organisation: Identifies what the organization is.

• Aspirations: Outlines what the organization aspires to be.

• Core Values: Emphasizes essential organizational values.

• Distinction: Differentiates the organization from others.

Additional Purpose

• Must be broad enough to allow for growth.

• Motivates workers by providing a sense of purpose.

• Must be articulated clearly for all stakeholders.

OUR MISSION

• Nike: "Bring inspiration and innovation to every athlete in the world. If you have a body, you are an athlete."

VISION STATEMENT OF NIKE

• "To do everything possible to expand human potential.”

MISSION AND VISION STATEMENT CONCEPT

Vision Questions

• What do we want?

• Points to the future; reflects long-term goals.

Mission Purpose

• Why are we doing what we are doing?

• It communicates what should be done to achieve the vision.

Audience

• Relevant to both internal and external stakeholders.

• The mission statement might need adjustment based on evolving circumstances, while the vision should remain consistent.

BUSINESS OBJECTIVE

• Long-term goals of an organization.

• General statements regarding an organization’s purpose and intention.

• Tend to be qualitative in nature.

STRATEGIC OBJECTIVES

• Long-term goals indicating how a business intends to fulfill its mission.

• Examples include increasing market share or improving profitability.

• Involves careful planning and execution of strategies.

TACTICAL OBJECTIVES

• Short- to medium-term targets which support the achievement of strategic goals.

• Utilizes different methods or tactics for attainment.

COMMON BUSINESS OBJECTIVES

• Profit maximization.

• Growth.

• Protecting shareholder value.

• Increasing market share.

• Ethical practices and Corporate Social Responsibility (CSR).

CHARACTERISTICS OF CORPORATE OBJECTIVES

• Specific: Clearly defined goals.

• Measurable: Easily quantifiable.

• Agreed: Have consensus among stakeholders.

• Realistic: Achievable considering the resources.

• Time-Specific: Have a deadline for achievement.

DETERMINANTS OF CORPORATE OBJECTIVES

1. Size and status of the business.

2. Power of stakeholders.

3. Ownership structures.

4. External and internal pressures.

5. Risks associated with objectives.

6. Corporate culture of the organization.

7. Number of years the business has been in operation.

DIFFERENT STAGES IN SETTING AIMS AND OBJECTIVES

• Aims: To be the most successful car dealer in the city.

• Strategic Objectives: Achieve the highest market share among city car dealers.

• Tactical Objectives: Hire enough salespeople for customer service.

• Operational Objectives: Ensure average customer waiting time to be greeted is under two minutes.

THE HIERARCHY OF OBJECTIVES

• Aims: Maximize shareholder value.

• Corporate Objectives: Increase profits by 10% each year.

• Divisional Objectives: Increase market share within one region by 5%.

• Departmental Objectives: Reduce long-term borrowings by 5% in Finance.

• Individual Objectives: Introduce five additional clients each year in Marketing.

THE NEED FOR CHANGES IN OBJECTIVES

Factors Influencing Changes

• Leadership: Styles and decisions at the top influence directions.

• HR: Human resource needs and management practices.

• Organization Structure: How the organization is organized impacts objectives.

• External Factors: Market, economic, and competitive challenges.

• Product: Development and management affecting objectives.

• Finance: Financial health influences strategic direction.

• Operations: Efficiency and productivity in operations affect goals.

THE NEED FOR CHANGES IN OBJECTIVES (CONT.)

External Factors

• Social: Changing societal expectations and norms.

• Technological: Advances that require adaptations in business strategies.

• Economic: Fluctuations that impact operational capabilities.

• Political: Changes in laws and regulations.

• Legal: Compliance and its implications on business.

• Ecological: Environmental responsibilities and initiatives that shape corporate objectives.

CORPORATE SOCIAL RESPONSIBILITIES (CSR)

• The concept that businesses should contribute to the economic, social, and environmental well-being of society instead of focusing solely on increasing shareholder value.

BENEFITS OF CSR

1. Better company image.

2. Attracting motivated employees.

3. Improved relations with various stakeholders.

4. Enhanced long-term profitability.

DRAWBACKS OF CSR

1. Short-run costs could increase.

2. Potential loss of cost and price competitiveness.

3. Risk of losing clients during economic downturns.

4. Risen risk of social backlash due to perceived CSR failures.