1.2 The O rganisation 1.2.1: Business objectives and their importance

1. 1.2 The Organisation1.2.1: Business objectives and their importance UNIT 1.1

2. 1.2 The Organisation

3. Aims • An aim is a goalor target. • A business may have more than one aim. • Aims should always be appropriate to the business activity and size of the business.

4. Example of aims • The main aim of the Australian football team in 2013 was to win the World Cup. • This aim would not have been appropriate for a local club.

5. Example of aims • A school or college may aim to improve its examination results (this links to the core activity) • A supermarket may aim to increase its profits. • Microsoft wanted to gain a share of the computer games market with its Xbox. This aim would not have been appropriate for a small, local computer company.

6. Types of business aims • A business aim does not always have to be to make profit

7. Types of business aims: Private sector • To survive as a business or expand • To make a profit • Growth • Increase market share • Image, reputation and social responsibility

8. Aims: Public Sector • Proving health care • Providing education • Providing community activities

9. p • Aims and objectives give organisations a direction to work towards • Private sector organisations seek to make a profit, usually the main focus for their aims and objectives. • Public sector organisations may seek to make a profit but will focus on public service.

10. Mission Statement • The overall reason for a business’ existence is known as its corporate aim or mission. • Eg. A business could set out to be ‘the lowest cost producer in Europe's or ‘the worlds favourite car hire firm’. • A mission statement is meant to inspire and define the underlying purpose of the organisation • -general purpose and aims of the business ‘To boldly go where no man has gone before’ -Star Trek

11. From Mission Statement to Objectives • A mission statement may be motivating but it lacks the specific information needed for planning. -What does ‘best industry mean’? Or ‘Most profitable’? • To plan properly a business needs to turn the mission into a objective.

12. Distinction between aims (or mission) and objectives • Mission: The purpose of the business • Aims: The goals the business wants to achieve • Objectives: specific targets. Must be achieved if the business can fulfil its aims. Practical steps to achieve the goals – usually quantified An aim is what you set out to do An objective is a target you want to achieve

13. Objective • Will specify exactly what the business wants to measure, how much of an increase it wants to measure and when it wants to achieve its target. ‘To increase profits by 20% over a five-year period’ The business then has to turn this overall objective into more detailed targets for individual departments and managers.

14. Objectives • Objectives are steps which help to achieve an aim. • All objectives should be measurable – so that achievement can be checked. • All objectives must be monitoredregularly – to check achievement.

15. Objectives The best objectives are SMART. S Specific M Measurable A Agreed (Achievable) R Realistic (researched) T Time-constrained

16. Example of SMART objectives S Save £130 for a holiday M £5 per week A Friends informed! R Leaves £20 for spends T Do for 6 months

17. Setting and Monitoring Aims And Objectives

18. Activity On a separate piece of paper to hand in • Write down your Mission statement for your studies this year. • Write down your aim for iGCSE Business • TARGET for iGCSE Business studies (Grade). • Write at least one SMART objective for yourself. • E.g ‘ To study at least 2 hours a week and achieve a B at the end of the year’ (Measureable and time specific)

19. Why set aims and objectives? • Aims provide a focus for the business. • Aims highlight key areas of development and achievement. • Objectives ‘break down’ aims so that they are easier to achieve • Objectives can be ‘shared’ so that many people are responsible for their achievement in their own areas.

21. Example of shared objectives Aim: To improve profits Objective 1: To increase sales by 10% over the next 6 months • Sales investigate new selling opportunities • Marketing increase advertising/promotions • Production produce more to meet increased demand • Distribution increase supply of goods to retailers

22. Summary • Mission: The purpose of the business • Aims: The goals the business wants to achieve • Objectives: Practical steps to achieve the goals – usually quantified. • Aims must be relevant to the organisation. • Objectives are steps to achieve targets. • Objectives can affect everyone in the organisation. • Objectives must be monitored regularly.

23. p • Businesses work to broad goals, which may be broken down to objectives. • Objectives should be SMART • Broad objectives usually relate to profit, growth & market share

24. Sell this Product The challenge: Identify an important feature/concept from this lesson…. ‘Sell it’ to the class. • ‘Our product ‘setting aims’ are like no other because…’ • ‘Your company needs to ‘have a mission statement because’ our product because…’ • ‘Setting Objectives will revolutionise… • ‘Benefits of setting aims is groundbreaking because….’

25. PlenaryLevel achieved_____ What do you now know as a result of today’s lesson? What are your areas for improvement? What are you going to do about this?

26. 1.2 The organisation1.2.2: Stakeholders and their differing objectives UNIT 1.1

27. 1.2 The Organisation

28. What are stakeholders? • People or organisations with a special interest in a business. • This is normally because they are directly affected by the business and how it operates – both now and in the future.

29. Employees and managers Customers Financiers Stakeholders Owners and shareholders Suppliers Pressure groups The local community The government Types of stakeholders

30. Power and influence • Some stakeholders are powerful. They can influence how the business operates. • Some stakeholders have little power. The business can virtually ignore their views.

31. Identify the powerful Which three have the power? • An individual employee in a large firm • A bank which has lent a lot of money to a small firm • A supplier of a major product, eg Microsoft • A small supplier to a large supermarket • An important customer of a small firm

33. Stakeholder interests All stakeholders have different types of interests: • Customers – price, quality, range of supplies, opening hours, facilities, etc • Employees – pay, working conditions, job security • Owners/shareholders – profit, share price, dividends • The local community – road building, pollution, safety, house values, jobs

34. Stakeholder interests • Government – legal issues, environmental issues, competition • Pressure groups – interests of members and those they represent • Suppliers – price paid for their supplies, further orders • Financiers – profits, return on money invested, repayments of loans

36. Conflict and stakeholders Conflict can arise in a business because stakeholder objectives are different. • Local community against expansion of business, employees want job security • Shareholders want high dividends, managers want to use profits for investment • Suppliers want high prices for goods they supply, customers want low selling prices

37. Stakeholder summary All stakeholders have an interest in a business. • Different groups have different interests • Interests may conflict • Business will be most likely to respond to the most powerful groups

39. p • A stakeholder is an individual or group that has an interest in decisions taken by a business. • Sometimes stakeholders have the same interests, but their interests may also differ and conflict. • Owners are very important stakeholders. They play a key part in setting up and ensuring the continual success of a business. • Main stakeholders are owners, employees, customers, communities, government, pressure groups, trade unions and employer associations.

40. 1.2 The Organisation COMPLETE

41. PlenaryLevel achieved_____ What do you now know as a result of today’s lesson? What are your areas for improvement? What are you going to do about this?

42. Unwrap the ‘present’ answer the question(teacher prepare before hand)

43. 1.3 Changing business environment

44. Starter Stars Plan the starter for next lesson… recapping this lesson (e.gMind map pg25)