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Business and Management :

Business and Management :. 1.3 Organizational Objectives Lesson 1 Pages 41-44. 1. Focus Questions. 1. Why are organizational objectives important? 2. What is a mission statement? 3. What is a vision statement? Do they differ? …. Types of Organizational Objectives.

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Business and Management :

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  1. Business and Management: 1.3 Organizational Objectives Lesson 1 Pages 41-44

  2. 1. Focus Questions 1. Why are organizational objectives important? 2. What is a mission statement? 3. What is a vision statement? Do they differ? …

  3. Types of Organizational Objectives To be the leading sports brand in the world To make products that outperform competitors To make athletic shoes that outperform competitors Gain 40% market share in athletic shoes Introduce three new athletic shoe products

  4. Pick the Correct Mission/Vision Statement "The Company exists to benefit and refresh everyone it touches“ • ( ) Air China • ( ) Mira Shower Company • ( ) Gatorade • ( ) Coca-Cola

  5. Pick the Correct Mission/Vision Statement Our mission is "to organize the world's information and make it universally accessible and useful“ • ( ) Microsoft • ( )Hewlett Packard • ( ) Amazon • ( ) Google

  6. Pick the Correct Mission/Vision Statement "We work to help people and businesses throughout the world realize their full potential“ • ( ) Harvard Business School • ( ) Microsoft • ( ) Apple • ( ) Wal-mart

  7. Pick the Correct Mission/Vision Statement "Connecting people has always been, and continues to be, our reason for business“ • ( ) Apple • ( ) Nokia • ( ) Panasonic • ( ) Samsung

  8. Pick the Correct Mission/Vision Statement “To be the most successful premium manufacturer in the industry“ • ( ) BMW • ( ) Versace • ( ) Uniqlo • ( ) Rolex

  9. 2. An overview • What is the core role of management? • Starts with a D_____? Anyone? • Decision-making…right! • …

  10. 2. An overview There are four (4) key questions that management MUST ask in the decision-making process: • Where are we now? • Where do we want to be? (we are going to focus on this) • How do we get there? • How do we know we are better? • …

  11. 3. Where do we want to be? • This question answers this: • The aims and objectives of business organization. • How do organizational objectives guide a business? • Gives the business a sense of direction. • When you drive a car and get lost, what do you use to find your way? • A road map. …

  12. 3. Where do we want to be? • Organizational objectives have three (3) functions: • To control set up targets within a department. i.e. set boundaries • To motivate inspire people to reach a common goal. • To direct; to provide a clear focus and direction for everyone in the organization. • …

  13. 4a. The importance of objectives • Why is target setting vital in all businesses? • What happens when you don’t set goals? • If you do not do this you will have no clear sense of direction. • No clear purpose. • …

  14. 4a. The importance of objectives • Aims and objectives are set for many important reasons: • Give a business a sense of direction and unity. • Encourages strategic thinking (planning for long term). • Provides a basis for measuring and controlling the performance the entire business. • …

  15. 4b. The importance of objectives • What are the many groups affected by the performance and activities of a business? • Stakeholder / shareholder groups • What are they interested in? • Profit….show me the money Jerry! • Local community • What are they concerned about? • Social responsibility of a business. • …

  16. 5. Business objectives at different levels • Corporate objectives: • Deal the with whole organization. • Departmental objectives • Very specific objectives; departmental targets • Individual objectives • Targets set for you or by you.l • Sales targets; if you are a salesperson. • …

  17. 6a. Mission and Vision Statements • A vision statement: • Outlines a business’s aspirations (where it wants to be). • “ I have a dream…” • “To be the leading sports brand in the world” • …

  18. 6b. Mission and Vision Statements • A mission statement: • States the purpose of an organization’s existence. • It will outline how a vision statement will be achieved. • They should be clear and realistic. • …

  19. Vision Statements Focused on long term. Not updated frequently. No actual targets. (what could be) Mission Statements Focused on medium to short term. Are updated frequently. Have actual targets. (what will be) Highlights the values of the business. … 6c. Mission and Vision Statements…still confused???

  20. Activity: Come up with your own Work in Groups • Use the business idea that your group came up with several weeks ago and come up with your both your own vision and mission statement. • If you do not remember what your original business was, you may start a new one. • Due: End of class

  21. Vision Statements Focused on long term. Not updated frequently. No actual targets. (what could be) Mission Statements Focused on medium to short term. Are updated frequently. Have actual targets. (what will be) Highlights the values of the business. … 6c. Mission and Vision Statements…still confused???

  22. Business and Management: 1.3 Organizational Objectives Lesson 2 Pages 44 - 50

  23. 1. Focus Questions 1. What are aims and objectives? 2. What is meant by short-term vs long-term objectives? 3. What ethical objectives do companies follow? …

  24. Aims: Are the long term goals of an organization. They give a purpose to the direction of the company. Are often expressed in the mission statement. Objectives: Are the short term goals of an organization. They are based on the company’s aims. They are quantifiable (measurable) Remember: The main difference between the two is the time scale. Aims are vague, objectives are more specific. … 2. Aims and Objectives

  25. 3a. Short-term vs Long Term Objectives • What does strategy mean? • A plan or scheme to achieve what? • Long term aims of a business. • It is used to achieve strategic objectives. • What does tactics mean? • The short-term ways that firms use to achieve their aims and objectives. • Both strategy and tactics will answer the question…what question will it answer? • 3. How do we get to where we want to be? • …

  26. 3b. Short-term vs Long Term Objectives • What might be the several levels of strategy that a business can adopt? • Operational strategies: • The day-to-day methods used to improve the efficiency of a business. • Generic strategies: • Those that affect the business as a whole • Such as differentiation • Corporate Strategies: • Aimed at the long-term objectives of a business. • Aiming for market dominance – seek ways in doing so. • Mergers, takeovers of rivals etc. • …

  27. 4. Tactical Objectives • So what are tactical/operational/secondary objectives? • Are short-term objectives that affect a segment of the organization. • For example, a sales department will set its own objectives. • The main tactical objective for many businesses is survival. • A second tactical objective might be sales revenue maximization. • Maximize their sales. • Remember: sales revenue is not PROFIT. • …

  28. 5. Strategic Objectives • What are strategic/primary objectives? • Are long-term aims of a business organization. • Targets for the next couple of years. • 1. Profit maximization: • Making as much profit as possible. • 2. Growth: • Measured by an increase in sales or by market share • Benefits of growth include: • Economies of scale, lower average cost of production. • Market power, more monopoly, charge higher prices. • Reduced risks, diversification; helps reduce risk. • 3. Image and Reputation • Having a bad image may turn customers away. • Must also consider the NEEDS of the customer. • Having a good reputation, people will want to do business with you. • 4. Market standing • Refers to the extent which a firm has presence in the marketplace. • Microsoft has high market standing for being number one in the computer software industry. • Walmart, the world’s largest retailer. • Toyota • The Body Shop. …

  29. 6a. Ethical Objectives • Ethics: • Socially responsible actions • Such as Driving Ethics, Teaching Ethics, Medical Ethics, Business Ethics etc… • Business Ethics: • Actions of people and organizations that are considered to be morally correct. • Responsible for its treatment towards its workers, customers, shareholders, stakeholders and the natural environment. • What are ethical objectives? • They are the moral principles that guide decision-making strategy. • Morals are concerned with what is right and wrong, from a society’s point of view.

  30. Ethical Objectives Examples • Examples of ethical objectives: • Reducing pollution by using environmentally friendly process • Increase recycling of waste materials • Waste disposal in environmentally friendly manner • Treating employees well as sufficient rest breaks and meals • Pressure from within or outside the business to act ethically may occur. • May be sourced from within the organization and sometimes from pressure groups as GreenPeace for Carbon emission reduction etc.

  31. Unethical Business Behavior • Some examples of Unethical business behavior: • Financial dishonesty: Bribery, fraud Bills and invoices, huge compensation of Expenses, Altered Account statements etc. Example GOME • Environmental neglect: pollution and use of non renewable resources • Exploitation of workers: Poor pay, poor working conditions, gender harassments etc. Example FoxConn • Exploitation of suppliers: for reduced price pressure, higher credit timeline • Exploitation of customers: Tobacco, alcohol, harmful contents in products as San Lu milk

  32. 6b. How to Achieve Ethical Objectives • How can we achieve this? • Well, a number of businesses have to adopt an ethical code of practice. • This should be published in the mission statement or annual report. • What is this ethical code of practice? • Documented beliefs and philosophies • Guidelines and expectations on employee behavior. • Let’s look at box 1.3a on pg. 49.

  33. Advantages: Improved corporate image: CFC’s (Foam Packing) banned by McDonald Increased customer loyalty: TheBodyShop not testing their products on animals Cost cutting: less use of excessive packaging, recycling the wastage Improved staff motivation: Less labour turnover Improved staff morale: High Quality staff who maintain the ethics Providing accurate information and labeling: More info to customers Active community work: charity work, giving back to the society Adhering to fair employment practices: Decent working conditions 6c. Advantages

  34. Limitations: Compliance costs: potentially higher production costs Lower profits: cannot add the ethics to the cost, so higher costs and lower profits Stakeholder conflicts: profit maximization or Ethics  Note: Ethical behavior is very subjective. What is right or wrong? Depends on the individual. Laws have been put in place to correct this. Anti-discrimination laws. Health and Safety at Work Laws. Lets look at 1.3.3 pg 51 6d. Limitations

  35. Business and Management: 1.3 Organizational Objectives Lesson 3 Pages 44 - 50

  36. 1. Focus Questions • 1. What does it mean to have corporate social responsibility? • 2. What are social and environmental audits and how are they conducted? • …

  37. 2. Corporate Social Responsibility (CSR) • So what are socially responsible firms? • Firms that act morally towards stakeholders, employees, and local community. • So how can firms be socially responsible? • Post-tax profits to charity. • Help clean up the environment. • One benefit of practicing CSR is increased reputation. • Why is this important? • To obtain a competitive advantage. • …

  38. 3a. Differing Views about CSR • Free Market or Non-compliance: • Is the role of business solely to generate profits for their owners? • Should governments, rather than businesses be responsible for sorting out social problems? • This views reasoning is that by pursuing the profit motive, firms will be more efficient and prosperous, thus helping society indirectly (job creation and corporate taxes). • Is this always the case? • What has happened recently?...

  39. 3b. Differing Views about CSR • Altruistic CSR Attitude: • What is altruism? • Refers to acting in a humanitarian and unselfish manner. • Do businesses really help society? • Do they try to improve society? • Which companies do what they can to improve the society, regardless of whether their actions help to increase their profits? • Charities • Local community projects…

  40. 3c. Differing Views about CSR • Strategic CSR Attitude: • What does this view entail? • Argues that businesses should be socially responsible ONLY if such actions help the business to become more profitable (used as a method of long term growth). • So, how can we monitor companies to practice CSR? • How can practice this in other countries? • Is it possible? • What is considered acceptable in one country may be totally undesirable in others. • In some Asian countries cigarette and liquor commercials are everywhere, where as in North America they are banned. • Do managers have a role in CSR? • How so? • Promote and encourage CSR in the workplace. • Box 1.3b gives examples of other means. • To what extent is a firm able to act socially responsible? (7 factors  )…

  41. 4a. Social Auditing • Let’s recap: • Why do corporations get involved in CSR? • To enhance their corporate image and reputation. • So…what is Social Auditing? • Is a way to ensure that SR objectives are being implemented. • Social audit: is an independent assessment of how a firm’s actions affect society. • The audit will review a firms: • Environmental impact (pollution and waste levels) • Staff management (health and safety) • What is an environmental audit? • an independent review of a firms impact on the environment. • What are 5 key parts of social auditing for a firm to devise policies that deal with its impact on society? • See page 53. …

  42. 4b. Social Auditing…the limitations • What are the limitations of Social Auditing? • Auditor charge a fee • Contents of the review may not be positive; could affect the public image and reputation of the company. • …

  43. 5. Organizational Objectives and Business Strategy • “Successful businesses have a clear vision of their aspirations and a mission that outlines their ultimate purpose.” • The performance of a business can be judged by the extent to which it achieves its objectives. • Peter Drucker? Have you ever heard of this guy? • Stated that organizational objectives be SMART • What does it mean to set SMART objectives? • Read pg. 56-57 to find out more. :P • Need to be: • Specific • Measurable • Agreed • Realistic • Time constrained • …

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