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Unit 1.

3
Organizational Objectives

Objectives

Explain the roles of mission and vision


statements (A02)

Compare and contrast aims, objectives,


strategies and tactics, and discuss how these
interrelate (A03)

Discuss the need for organizations to change


objectives and innovate in response to
changes in internal and external
environments. (A03)

Objectives

Describe ethical objectives and corporate social


responsibility. (A01)

Discuss the reasons why organizations set ethical


objectives and the impact of implementing them. (A03)

Examine the revolving role and nature of CSR. (A03)

Prepare a SWOT Analysis of a given organization. (A03,


A04)

Prepare an Ansoff Matrix to examine the different


growth strategies of a given organization. (A03, A04)

The Importance of
Objectives
Why are objectives important?

Organizational Objectives
Key Functions
1. To control
Sets boundaries for business activity
2. To motivate
Inspire all to reach a common goal
3. To direct
Provide a sense of direction

Mission vs. Vision

Vision
A philosophy, vision or set of principles

which steers the direction and behavior of


an organization

Vision Statement
Speaks to the long-term aims and highest

aspirations of the business

Mission vs. Vision

Mission
To have a clear purpose
What is the business trying to achieve and

outlines the organizations values

Mission Statement
A simple declaration that broadly states the

underlying purpose of the organizations


existence
Outlines how a vision statement will be
achieved
Clearly defined

Mission vs. Vision

Differences
Time frame Vision is longer
Measurability Mission is more achievable
Specific Vision is less specific and more

vague

Table 1.3.1 (Page 38)

Real-Life Application
UA Schools
Other Companies

Explain the roles of


mission and vision
statements (A02)

Aims vs. Objectives

Aims
Long-term goals of an organization
Broad, vague, and unquantifiable
General direction of an organization and often

summarized in the vision statement

Objectives
Medium- to short-term and more specific goals

of an organization
Clarify how the business will achieve its aims
and reach its vision
Measurable (Quantifiable)

Aims vs. Objectives


Differences
Aims

Objectives

Longer Time Frame

Shorter Time Frame

Unquantifiable

Quantifiable

Vague

Specific

Objectives

Three types of objectives:


Strategic objectives
Medium- to long-term
Set by upper management to achieve the aims
Tactical objectives
Short- to medium-term
Set by middle managers to achieve strategic
objectives
Operational Objectives
Day-to-day
Set by floor managers and/or workers to achieve
tactical objectives

Hierarchy of Objectives
Aims

CEO/Owner

Strategic
Objectives

Executives/Directors

Tactical Objectives
Operational Objectives

Middle Managers

Floor
Managers

Table 1.3.3
Page 40

More Terms.

Business Strategy
A plan to achieve a strategic objective in order to work

towards the aims of the business (action)


Medium- to long-term and devised by upper
management

Business Tactic
A plan to achieve a tactical objective to work towards the

strategies of the business (action)


Short-term and devised by middle management

What actions do we take to get to where we


want to be?

Compare and contrast aims,


objectives, strategies and tactics,
and discuss how these interrelate
(A03)

Discuss the need for organizations


to change objectives and innovate
in response to changes in internal
and external environments. (A03)

Need to Change Objectives


INTERNAL ENVIRONMENT

Change in Leadership
HR
Business Organization
Product Change
Finance
Operations and
Innovation

EXTERNAL ENVIRONMENT

Social
Technological
Economic
Ethical
Political
Legal
Ecological /
Environmental

Ethical Objectives

Ethical Objectives
Goals based on established codes of

behavior that allow the business to provide


some social benefit (or not be harmful in
the process)

Examples of Unethical Business


Behavior

Financial Dishonesty
Environmental Neglect
Exploitation of the Workforce
Exploitation of Suppliers
Exploitation of Consumers

Is this socially
irresponsible?

Advantages and
Limitations of Ethical
Behavior
Brainstorm a list of
advantages and limitations of
ethical behavior for a business

Advantages

Improved image
Increased customer loyalty
Developing a positive work environment
Improved staff motivation / less turnover
Improved staff morale
Recruitment

Cost cutting
Reducing risk of legal implications
Satisfying customers expectations
Profitability

Limitations

Compliance costs
the potentially high costs of acting ethically

Lower profits

Stakeholder conflict

Resistance to change

Corporate Social Responsibility

The responsibility of a firm to act


morally towards its stakeholders (ie.
employees, community)

The concept that a business has the


obligation to operate in a way that
will have a positive impact on society

Social Responsibility vs. Ethical


Objectives

Ethical Objectives are goals

Social Responsibility is broader

Recognizing CSR will help with a sustainable


business model in todays society

Globalization makes it more difficult

Ethics and Social Responsibility are subjective

Objectives

Describe ethical objectives and


corporate social responsibility. (A01)

Discuss the reasons why


organizations set ethical objectives
and the impact of implementing
them. (A03)

Examine the revolving role and


nature of CSR. (A03)

Strengths

Internal factors that are


positive compared to
competitors
competitive advantage
Current factors

Weaknesses

Opportunities

External possibilities and


prospects for future
development
Near future (likely to
face)

SWOT

Internal factors that are


negative compared to
competitors
competitive
disadvantage
Current factors

Threats

External factors that


hinder the prospects for
an organization
Near future (likely to
face)

The Ansoff Matrix

An analytical tool

Helps managers devise product


and market growth strategies

Shows the various stages that


businesses can take
market new and existing products in

either new or existing markets

The Ansoff Matrix

4 growth strategies (growth


options)
PRODUCTS
M
A
R
K
E
T
S

Existing

Existing

New

Market
Penetration

Product
Development

Lowest Risk

New

Market
Development
Medium Risk

Medium Risk

Diversification
Highest Risk

Market Penetration

Lowest-Risk growth strategy

Focus on selling existing products in existing markets

To increase your market share of current products

How to do this Marketing Strategies discussed in


Unit 4

Market Penetration

Advantages
Focus on markets
and products that
are familiar
Safest of 4
strategies in the
Ansoff matrix

Limitations
Strong reaction
from competitors
Price wars
Is the market
saturated? What
is the growth
potential?

Product Development

Medium-risk growth strategy

Focus on selling new products in


existing markets

New products to appeal to


existing market

Important factors:
Market Research, R&D, First mover

advantage

Product Development

Good for a product that has


reached decline stage of product
life cycle; New life!!

Good for companies that launch


different products under the same
brand name
Apple IPod vs. Apple Ipad
Coke, Diet Coke, Coke Zero

Product Development

Advantages
Prolonged life
Meeting needs of
a changing
market
Not starting from
scratch
Potential first
mover advantage

Disadvantages
Money/Costs
Research and
Development
Might not be
successful

Market Development

Medium-risk growth strategy

Focus on selling existing products in


new markets (or new market
segments)

How to do this:

New distribution channels to sell product in different

locations or overseas
Market to new audience
Additional Marketing Strategies from Unit 4

Market Development

Advantages
Reduced risk
because the
business is
familiar with
product
Larger potential
customer base
Potential first
mover advantage

Disadvantages
Success in one
market does not
necessarily mean
success in another
Advertising/promo
tion costs
R& D and Market
Research is
expensive

Diversification

High-risk (riskiest) growth


strategy

Focus on marketing new products


in new markets

Key Factors:
Effective market research
Testing the market
Forecasting costs

Diversification

Ways to Diversify
Acquisitions
Brands or Complete Takeovers

Examples of Diversified
Companies
Disney (Pixar, ESPN, Theme Parks,

Cruise Lines, ABC)


Proctor and Gamble
Johnson & Johnson

Diversification

Advantages
Increased market
share in
established
markets
Spread risks
New opportunities
for growth,
especially in
saturated markets

Disadvantages
Riskiest growth
strategy of all 4
because new
products and new
markets
Time consuming
and costly
Can cause
distraction
Loss of focus

Ansoff Matrix Current


Event Connections

Review 1.3

Why are objectives important to a business?

What is the purpose of a mission statement?

Differentiate between a mission and a vision


statement

Differentiate between aims &objectives

Differentiate between strategic objectives


and tactical objectives