Organisational Objectives

Vision Statement

• Defines the philosophy and principles steering the direction and behavior of an organization (GAP).

• Sets a long-term aspirational goal and reflects the organization’s values (Getty).

Mission Statement

• Articulates the core aims of a business.

• Motivates employees and generates interest from external stakeholders (DRAGLE).

Purpose and Characteristics of Mission Statements

What a Mission Statement Defines

• Defines what the organization is and its core values.

• Outlines what the organization aspires to be.

• Distinguishes the organization from others in the industry.

Key Characteristics

1. Must allow for business growth and evolution.

2. Should motivate workers providing a sense of purpose.

3. Must be phrased clearly for easy understanding.

Example of a Mission Statement

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

Nike Vision Statement

• To do everything possible to expand human potential (H.H. the Business Model Analyst).

Understanding Vision and Mission Statements

Purpose Comparison

• Vision Statement: What do we want? Focuses on future aspirations.

• Mission Statement: Why are we doing what we are doing? Communicates actions needed to achieve vision.

Audience

• Vision Statement: Internal and external stakeholders.

• Mission Statement: Also caters to internal and external stakeholders.

Permanence and Change

• The vision should remain stable, while mission statements may need modifications to address changing circumstances.

Business Objective

• Outlines long-term goals; generally qualitative in nature and expresses the purpose and intent of the organization.

Strategic Objectives

• Long-term goals indicating how a business will achieve its mission (e.g., increasing market share, improving profitability).

• Requires careful planning to achieve these strategic measures.

Tactical Objectives

• Short- to medium-term targets to reach strategic goals.

• Employ various tactics and methods to accomplish them.

Common Business Objectives

• Profit maximization.

• Growth and increasing market share.

• Protecting shareholder value.

• Focus on ethical considerations and CSR (Corporate Social Responsibility).

Characteristics of Corporate Objectives

• Specific: Clearly defined goals.

• Measurable: Objectives must allow for assessment of progress.

• Agreed: Stakeholders must reach consensus on objectives.

• Realistic: Must be achievable.

• Time-specific: Clear timelines for achievement must be defined.

Determinants of Corporate Objectives

1. Size and status of the business.

2. Influence and power of stakeholders.

3. Ownership structure.

4. Internal and external pressure.

5. Associated risks.

6. Corporate culture and values.

7. Duration of time operating in business.

Different Stages in Setting Aims and Objectives

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

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

  • Tactical Objectives: Hire sufficient salespeople to meet customer demand.

  • Operational Objectives: Reduce customer wait time to under two minutes.

The Hierarchy of Objectives

• Aims: Maximize shareholder value.

  • Corporate Objectives: Increase profits by 10% annually.

  • Divisional Objectives: Increase market share in a specific region by 5%.

  • Departmental Objectives: Decrease long-term borrowing by 5% in finance sector.

  • Individual Objectives: Increase client acquisition by five clients each year in marketing.

The Need for Changes in Objectives

• Influences from various sectors:

  • Leadership

  • Human Resources

  • Organizational Structure

  • External Factors (Market conditions, competition, etc.)

  • Product development

  • Financial performance

  • Operations efficiency.

Factors Causing Changes in Objectives

• Social Factors: Changes in societal values or expectations.

• Technological Factors: Innovations and updates in technology.

• Economic Factors: Economic downturns affecting consumer behavior.

• Ethical Factors: Changing standards in corporate responsibility.

• Political Factors: New regulations or government policies.

• Legal Factors: Changes in laws affecting business practices.

• Ecological Factors: Environmental considerations and sustainability efforts.

Corporate Social Responsibilities (CSR)

• Emphasizes the importance of businesses contributing to the economic, social, and environmental well-being of society rather than focusing solely on increasing shareholder value.

Benefits of CSR

1. Improved company image and reputation.

2. Attraction of motivated employees who value CSR initiatives.

3. Enhanced relations with different stakeholders.

4. Higher long-term overall profitability.

Drawbacks of CSR

1. Short-term costs may increase.

2. Potential loss of cost and price competitiveness.

3. Risk of losing clients during economic recessions.

4. Possible backlash from social movements or criticism.