a lyt

An l
ica
o o ls
T

1.3 Organisational
objectives
 From the specification
- Vision and mission statements
- Aims, objectives, strategies and tactics, and their relationships
- Change in reaction to internal and external changes
- Ethical objectives and corporate social responsibility(csr)
- Reasons why and impact of ethical objectives
- The role and nature of CSR
- SWOT analysis
- Ansoff’s matrix
Vision and mission statements
 Vision and mission statements
Mission statements A vision is a long-term
complement vision goal that the
statements by explaining organisation hopes to
what the organisation reach sometime in the
does, right now, at the
future.
present time, in order to
achieve its vision. If the
The vision statement
vision statement expresses that goal in
expresses what the firm order to inspire
would like to accomplish, everyone involved with
the mission statement the firm.
describes what it actually Vision statements are
does. Go online and see if you can find the often somewhat
vision and mission statement of a idealistic.
company of your choice.
 RECAP

Mission and vision statements

Aims and objectives
Why set objectives?
 Aims, objectives, strategies and tactics

Aims Objectives
Aims are the general and longterm Objectives are the short-to-medium term specific
goals of an organisation. They are targets an organisation sets in order to achieve its
broad and general goals that are used aims.
to give a direction for the organisation.
They are often expressed in a mission
statement.
The difference between aims & objectives
 Why have objectives?

● Motivates employees/owners as it gives them

something to work towards

● Used to assess performance - Helps assess

the performance of the business if objectives
are set.
Why might objectives change over time?
 Why might objectives change over time?
The internal environment refers to situations and settings
within the organization itself. Hence, the organization will have
some degree of control over these matters. Changes in the
internal environment have an impact on organizational
objectives. Examples include changes in:
The external environment refers to situations and factors that
are those beyond the control of an organization. This includes
consideration of changes in the following aspects of the external
business environment, known as STEEPLE analysis (see
Unit 1.5):

• Corporate culture ● Social factors

● Technological factors
• Growth and size of the ● Economic factors
organisation ● Environmental factors
● Political factors
• A change in senior ● Legal factors, and
management ● Ethical factors.

• Crisis management
Objectives and change

Again, changes in the external environment will impact on the organizational objectives of a business. Examples of such factors include
changes in:

● The state of the economy, e.g. whether it is in an economic boom or a slump

● Laws and regulations governing business operations and practices
● The degree or intensity of rivalry (competition) in the industry
● Innovations and new products launched by competitors
● Social trends, e.g. attitudes towards business ethics and corporate social responsibilities
● Technological progress and the impact on business operations, e.g. e-commerce and online shopping.

For any organization of your choice, investigate how the coronavirus pandemic of 2019 - 2020
caused changes to its organizational objectives and its business operations.

Zoom, Netflix, Deliveroo, Uber, AirBnb

 Aims, objectives, strategies and tactics
A strategy is a plan,
approach, or scheme
for achieving an aim
or objective.
Strategies are
generally considered
to involve important
decisions that may be
risky and are taken by
senior management.
A tactic is an approach or
scheme for achieving an aim or
objective. Compared to
strategies, tactics usually
involve fewer resources and
may be less risky. They may
therefore not involve senior
management because they can
be more easily reversed or
modified compared to strategies
Aims, objectives, strategies and tactics
 Ethical objectives and corporate social responsibility

Ethics is one of the 7 core concepts of business. Ethics are the moral principles that
guide decision making. CSR is the consideration of ethical and environmental practices
in relation to business activity.

Starbucks https://edition.cnn.com/2018/11/01/business/starbucks-holiday-cups/index.html

McDonalds

Apple

Ben and Jerrys

 Ethical objectives and corporate social responsibility

Ethics is one of the 7 core concepts of business. Ethics are the moral principles that
guide decision making. CSR is the consideration of ethical and environmental practices
in relation to business activity.
 Ethical objectives and corporate social responsibility

● Corporate social responsibility (CSR) refers to the value, decisions and actions that impact society in a positive way. It is about an
organization’s moral obligations to its stakeholders, the community, society as a whole and the environment.
● CSR is about an organization using ethical objectives to commit to behaving in a socially responsible way towards its internal and external
stakeholders, not just to shareholders.
● It is based on the values of the organization, in accordance to society’s norms and beliefs.
● Ethics are, essentially, about what is deemed to be right and what is considered to be wrong, i.e. morality from society's point of view.
● Business ethics provide moral guidelines for the conduct of business activities.
● Ethical objectives are organizational goals based on moral guidelines in order to influence or determine business decision-making.
● Ethical decision-making considers more than just calculating costs, benefits and profits.
● Examples of ethical objectives include: improving the overall wellbeing of workers, fair treatment of customers and suppliers, adopting
green (clean / renewable) technologies, pursuing sustainable growth strategies, using socially responsible advertising, and corporate
governance (such as financial integrity and transparency).
● As part of its CSR strategy, businesses may establish an ethical code of practice - a formal documented policy setting out the way the
business believes it should behave, including how to respond to situations that challenge its integrity or social responsibility.
● Examples of poor corporate social responsibility and unethical business ethics include: the exploitation of stakeholders (such as low-paid
workers, suppliers being paid late, and poor delivery of services to customers), exploitation of the natural environmental and ecosystems,
and fraud (financial deception)
 Ethical objectives and corporate social responsibility

● Organizations are ever more aware of the need for businesses to set ethical objectives as part of their corporate social responsibility (CSR).
● Doing so helps businesses to earn or sustain a positive corporate image in the eyes of external stakeholder groups such as pressure groups,
the government and customers.
● Internally, it can also help to improve employee morale, motivation, retention and productivity.
● In the long run, setting ethical objectives and acting ethically can help the organization to gain competitive advantages and improve its
profitability.
● The internet and social media make it very easy to expose organizations that act unethically.
● It can help to create greater customer loyalty.

Nevertheless, pursuing ethical objectives can have its drawbacks too. These limitations include:

● Compliance costs of always trying to act in a socially responsible way, i.e. the costs of compliance with the firm's ethical code of conduct.
● The added level of bureaucracy in following ethical codes of practice and formal company policies can delay decision-making in business
organizations.
● Hence, this can cause stakeholder conflict, i.e. upset shareholders and investors due to the impact of higher costs on the organization’s
profits.
 Activity:
Sainsbury’s Strategic Direction

In pairs - read the case study and answer the questions that follow.
 a lyti
An l
ca
o o ls
T

SWOT and Ansoff

1.3 Organisational Objectives
 Recap:
Vision and mission
Aims
Objectives
Tactical - short term
Strategic - long term
Ethics and CSR
Strategies and tactics

Tactical Objectives Strategic objectives

Short term Long term
Strategies and tactics

Tactical Objectives Strategic objectives

Short term Long term

Survival Profit maximisation

Growth
Sales revenue
Image and reputation
maximization
Market share
Ansoff matrix for different growth strategies
The Ansoff Matrix is another
business tool which businesses
use to help them plan and set
objectives.
Ansoff matrix for different growth strategies
The Ansoff Matrix is another
business tool which businesses
use to help them plan and set
objectives.

The matrix looks at the growth

potential in terms of the market
and product and considers both
the existing markets and
products, and new markets and
products.
Market Penetration
The market penetration strategy involves selling more of the
same products and services to pretty much the same
customers, or at least the same types of customers. The
market penetration strategy is usually considered the least
risky growth strategy as it often does not entail making large
investments. In the case of a neighbourhood bakery, for
example, market penetration might involve extending hours,
changing pricing strategies, or using loyalty cards in an
attempt to increase sales.
Product development
Product development involves selling new products in the
organisation’s existing market, often to existing customers. In
the example of our bakery, product development might
involve selling cakes, sandwiches or beverages to complement
the simpler baked goods.

Product development usually involves some risk because it

requires investment in time and resources to carry out. The
bakery will have to experiment with sandwich offerings or
various cake recipes to see which ones prove the most
popular. Investment in storage and refrigeration equipment
may be required. These efforts may distract the owner from
the 'core', or primary, business of making bread. Efforts to
commercialise new products may fail if managers do not
understand or are unable to meet customers’ desires and
expectations.
Market Development
Market development involves selling existing products to new
customers. In our bakery example, this might involve opening
a new bakery in a new location that sells the same products as
the original shop. Market development is also considered
more risky than a penetration strategy, as the organisation
may not understand the needs of the new customers and its
offerings might not be adapted to the new market.

● Market development strategies often involve a new

geographic market, such as moving to a new
neighbourhood, or a new town, or even a new country.
● Market development can also involve selling the
existing product to a new demographic group or target
market. For example, Crocs were originally designed
for use by boating enthusiasts before they were
commercialised to a wider range of people.
Diversification
Diversification is considered the most risky growth strategy,
as it involves selling new products in a new market. The
business is thereby getting involved in an activity of which it
has little knowledge and as a consequence there is more
potential for making costly mistakes.

If the new activity has some similarities with the existing

business it may be considered 'related diversification'. For
example, if our baker decides to open a chocolate shop in a
new location there may be some similarities to his existing
activity. His expertise in terms of managing a small shop and
satisfying customers will be useful in running the new
business. If, on the other hand, he decides to sell furniture
online, little of his existing expertise will be relevant.
Therefore, engaging in diversification that is unrelated to the
original business is in most cases the most risky growth
strategy.
Ansoff
Ansoff matrix for different growth strategies
Existing product New product

Existing Market penetration Product development

market Increase sales to the existing market - firm
focuses on what it knows and does well
Penetrate more deeply into the existing
market
New product developed for existing
markets
Medium risk as this often involves
significant investment in R&D

New Market development Diversification

market Existing products sold to new markets.
Element of risk as new customers have
different tastes.
Added cost of market research
New products sold in new markets
High risk
Related diversification means that the
organisation stays in an industry they are familiar
with
Ansoff matrix and risk
Existing product New product

Existing Market penetration Product development

market
Lowest risk - existing customers Medium risk as this often involves
significant investment in R&D

New Market development Diversification

market
Moderate risk as new customers have High risk
different tastes.
Ansoff matrix for different growth strategies
Apple - Primary product? iWatch itunes
iPodipad
iPhone X
Beats
Apple TV
Ansoff matrix for different growth strategies

Using the Ansoff matrix, evaluate the

two possible growth strategies for A4A.
N16HP2
Ansoff matrix for different growth strategies
Groups of 4

Each person will present an argument

2 arguments supporting the option
2 arguments against the option

All points must use evidence in the case to back it up - this means each point
must make specific reference to the case study and the impact of your point on
A4A.
Using the Ansoff matrix, evaluate the
two possible growth strategies for A4A.
N16HP2
For one relevant issue that is one-sided, award up to [3]. For
more than one relevant issue that is one-sided, award up to a
maximum of [4].

If a candidate evaluates / addresses only one growth strategy,

award a maximum of [5].

Award a maximum of [6] if the answer is of a standard that shows

balanced analysis and understanding throughout the response
with reference to the stimulus material but there is no
judgment/conclusion.

Candidates cannot reach the [7–8] markband if they give

judgment/conclusions that are not based on analysis/explanation
already given in their answer.

Using the Ansoff matrix, evaluate the

two possible growth strategies for A4A.
N16HP2
 a lyti
An l
ca
o o ls
T

SWOT
1.3 Organisational Objectives
 SWOT analysis
SWOT is commonly used as part of strategic planning and looks at:
● Internal strengths
Internal factors that reveal what the organisation does well compared to its rivals

● Internal weaknesses
Internal factors that reveal what the organisation does not do so well compared to its
rivals

● Opportunities in the external environment

External factors that may enable the organisation to develop and prosper

● Threats in the external environment

External factors that may hinder the organisation’s ability to achieve its aims
SWOT analysis
 SWOT analysis aims to discover:
● What the business does better than the competition
● What competitors do better
● Whether it is making the most of the opportunities available
● How a business should respond to changes in its external environment
 SWOT analysis
The key point to remember about SWOT is that:

Strengths and weaknesses

Are internal to the business

Opportunities and threats

Are external to the business
relate to changes in the
environment which will impact
the business
 SWOT analysis
The key point to remember about SWOT is that:
SWOT analysis
IKEA SWOT analysis
SWOT analysis
SWOT analysis
SWOT analysis
SWOT analysis
 SWOT Task
Using a company of your choice, conduct a SWOT analysis of it in the
current market.

- You must include a min of 3 points under each heading

- You must reference each point ( include the link to the website you
found the data, try use a variety of sources)
- You must present your SWOT in a one page slide/document which you
will outline to the class in lesson 2 of tomorrow’s lesson ( 2 min
explanation)
SWOT