Notes: 1.3 Business Objectives

Vision statements
- Outline an organization’s aspirations in the distant future.
- Focus on the very long term.
- Expressed as a broad view of where the company wants to be.
- Very long-term, broad ideals; infrequently updated.
- Do not specify actual targets to achieve (about "some day" in the future).
Mission statements
- Simple declaration of the underlying purpose of an organization’s existence and its core values.
- Focus on the medium to long term.
- A well-written mission statement is clearly defined and realistically achievable.
Vision vs. Mission (summary)
- Vision: aspirational, future-oriented, broad, infrequently updated, no concrete targets.
- Mission: declares purpose and values, present orientation, more concrete targets, updated more frequently.
- How they relate: Vision articulates the destination; the mission defines the purpose/values guiding actions toward that destination.

Objectives provide targeted direction for the future.
Common structure (from broad to specific):
- Vision: Very long-term, broadly expressed ideals.
- Mission: Medium to long-term purpose and values.
- Strategies: Medium to long-term plans to achieve objectives; somewhat specific.
- Tactics: Short-term actions that implement strategies; very specific.
Relationship to time and specificity (as depicted in the unit):
- Vision → very long-term, broad ideals
- Mission → time-oriented, more concrete
- Strategies → medium-to-long-term plans
- Tactics → short-term, highly specific actions

Often measured by: ext{sales revenue growth} or ext{market share}
Importance: essential for survival and adapting to changing, competitive conditions
Risk of not growing: declining competitiveness and threats to the firm’s sustainability

Traditional core objective: profit maximisation
Rationale: provides incentive for entrepreneurs to take risks and invest in the business
Quotation illustrating a controversial view: "There is one and only one social responsibility of business - to use its resources and engage in activities designed to increase its profits." – Milton Friedman

Focus: earning a profitable return for shareholders in a sustainable way
Balance required: short-term dividends versus long-term value investments
Guiding sentiment: "If the customer is happy, the business is happy, and the shareholders are happy."

Ethics = moral principles that guide decision-making and strategy
Moral vs societal perspectives: morals concern what is right or wrong from society’s viewpoint; business ethics are actions considered morally correct
CSR context: ethical considerations shaping business decisions

Definition: CSR is the conscientious consideration of ethical and environmental practices in business activity
Practice: CSR policies require regular review to adapt to evolving attitudes and expectations across markets
Potential benefits: can provide competitive advantages and support long-term sustainability
Common CSR policy examples:
- Accurate product labelling
- Environmental impact awareness
- Fair employment practices
- Community contributions via volunteering or charitable work

Definition of terms:
- Tactics: actions required to achieve short-term objectives; short-term and functional
- Tactical objectives: short-term, specific goals for particular functional areas with definitive timelines
- Strategies: actions required to achieve long-term objectives; medium to long-term plans expressed specifically
- Strategic objectives: long-term goals the organization continually strives to achieve
Relationship between concepts:
- Strategies are plans of action to reach long-term objectives
- Tactics are the methods used to enact strategies
- Fulfilment of tactics enables the achievement of strategic objectives

Market standing: depth of presence in the industry
Image and reputation: consumer beliefs and perceptions of the firm
Market share: firm’s sales revenue as a percentage of industry sales
Example: Microsoft described as having strong market presence, high-quality products, and leading OS market share

Tactics: concrete methods to enact strategies
Often short-term and adjusted to respond to changing conditions
Example contexts include responses to COVID-19 where firms shifted tactics to survive

Visual relationship:
- Vision informs the mission; the mission shapes behaviors to turn vision into reality
- Strategic plans fulfill the mission
- Tactical actions build up to form strategic approaches

Examples of CSR policies (brief): accurate product labelling, environmental impact awareness, fair employment practices, community volunteering/charitable work
Pros and cons: e.g., accuracy of labels (trust vs cost of standardization), CSR initiatives for furniture recycling (IKEA), community engagement (Nissan), employee well-being initiatives

Warren Buffett: “It takes 20 years to build a reputation and five minutes to ruin it.”
Bill Gates: “Vision without execution is daydreaming.”
Milton Friedman: “There is one and only one social responsibility of business - to use its resources and engage in activities designed to increase its profits.”
Mark Zuckerberg: “The biggest risk is not taking any risk… In a world that is changing really quickly, the only strategy that is guaranteed to fail is not taking risks.”