1.3 Objectives

Organisational Aims & Objectives

Vision vs Mission

Vision

• Future-based

• Answers the question “Where is the business going?”

• Focus on the long-run (long-term)

• Is inspirational and should shape the strategic decision making

Mission

• Based in the present

• A declaration of the core values of the company

• Answers the question “Why does the business exist?”

• Communicated to internal and external stakeholders

Mission statements should:

• Define what the organisation is and what it aspires to be

• Be limited enough to exclude some ventures and broad enough to allow for creative growth

• Distinguish a given organization from all others

• Server as a framework for evaluating both current and prospective activities

• Be stated in terms sufficiently clear to be widely understood throughout the organisation

What is an objective?

• An objective is a target or goal. This is a desired result that a person or group of people envisage, plan and commit to.

Has to be S.M.A.R.T.

• • Specific

  • Measurable

  • Agreed

  • Realistic

  • Timed

Difference between aim and objectives

• Aims

• General statement of what the business intends to achieve

• Objectives

• More precise and detailed statements of the aims / goals

Hierarchy of Objectives

1. Corporate Aims

2. Strategic Objectives

3. Tactical/Operational Objectives

4. Individual Objectives

The need to change objectives

• Political and regulatory environment

• Economic environment

• Technology and innovation

Ethical Objectives & Corporate Social Responsibility (CSR)

What are ethics?

• Ethics are moral guidelines which govern good behaviour

Common Areas of Unethical Business Behaviour

• Financial dishonesty

• Environmental neglect

• Exploitation of the workforce

• Exploitation of suppliers

• Exploitation of consumers

Ethical Objectives

• Businesses often have additional moral objectives which they may develop into an ethical code of practice

Reasons for ethical objectives

• Genuine ethical motives

• Pressure

• As a marketing tool

Advantages

• Increased sales (customer support)

• Less price elastic demand

• Improved brand and business awareness and recognition

• Better employee motivation and recruitment

• New source of finance - e.g. ethical investors

Disadvantages

• Higher costs - e.g. sourcing from Fairtrade suppliers rather than lowest price

• Higher overheads - e.g. training and communication of ethical policy

• Stakeholder conflicts

• A danger of building up false expectations

What is CSR (Corporate Social Responsibility)?

• How a company manages its business to produce an overall positive impact on society

CSR involves

• Community and Society

  • Plays an active role in the community

• Customer Relationships

  • Fair, respectful and honest with customers/clients

• Environment

  • Works to minimise the impact of its operations, products/services on the environment

• Supplier Relations

  • Makes purchasing decisions that takes social and environmental values into consideration

• Corporate Governance

  • Considers long-term, social, environmental and economic impacts when it makes decisions

• Employee Relations

  • Employees are treated fairly, respectfully and honestly

• Human Rights

  • Respectfully manages human rights

Ethics vs CSR

• Ethics concern actions which can be assessed as right or wrong by reference to moral principles

• CSR is about the organisation’s obligations to all stakeholders, not just shareholders