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Bm 1.3 Organizational Objectives
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Bm 1.3 Organizational Objectives

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IB Business and Management (Standard Level) …

IB Business and Management (Standard Level)
All material taken from the IB Business and Management Textbook:
"Business and Management", Paul Hoang, IBID Press, Victoria, 2007

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  • 1. Business and Management : 1.3 Organizational Objectives Lesson 1 Pages 41-44
  • 2. 1. Focus Questions
    • 1. What are some important organizational objectives?
    • 2. What is a mission statement?
    • 3. What is a vision statement? Do they differ?
  • 3. 2. An overview
    • What is the core role of management?
      • Starts with a D_____? Anyone?
      • Decision-making…right!
    • 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?
  • 4. 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.
    • Organizational objectives have three (3) functions :
      • To control a firm’s plan (set up targets within a department.
      • To motivate or inspire people to reach a common goal.
      • To direct ; to provide an agreed and clear focus for everyone in the organization.
  • 5. 4a. The importance of objectives
    • Why is target setting vital in all businesses?
      • If you do not do this you will have no clear sense of direction.
      • No clear purpose.
    • Aims and objectives are set for many important reasons :
      • Give a business a sense of direction, purpose and unity .
      • Forms the foundation for business decision-making .
      • Encourages strategic thinking (planning for long term).
      • Provides a basis for measuring and controlling the performance of the workforce, the management, and the entire business.
  • 6. 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.
  • 7. 5. Business objectives at different levels
    • Corporate objectives:
      • Deal the with whole organization .
        • Goals, profit maximization, growth, over all survival.
    • Departmental objectives
        • Very specific objectives; departmental targets
    • Individual objectives
        • Targets set for you or by you .
        • Often used in performance appraisal
          • Sales targets; if you are a salesperson.
  • 8. 6a. Mission and Vision Statements
    • A vision statement:
      • Outlines a business’s aspirations ( where it wants to be ).
      • They relate to the attainment of success
        • “ I have a dream…”
        • “To be the leading sports brand in the world”
      • It is an image of an ideal situation in the future.
  • 9. 6b. Mission and Vision Statements
    • A mission statement:
      • Explains what the business is trying to achieve.
      • Outlines the organizations values.
      • It is a simple declaration that states the purpose of an organization’s existence.
      • It will outline how a vision statement will be achieved.
      • These statements do not have a time frame.
      • They should be clearly defined and realistically achievable.
      • It will serve to unify all people and corporate culture in an attempt to achieve the organization’s vision.
        • As a manager you will need to ensure that decisions are consistent with the mission statement.
  • 10. 6c. Mission and Vision Statements…still confused???
    • 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.
  • 11. Business and Management : 1.3 Organizational Objectives Lesson 2 Pages 44 - 50
  • 12. 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?
  • 13. 2. Aims and Objectives
    • 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.
  • 14. 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 ?
  • 15. 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.
  • 16. 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 .
  • 17. 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. …
  • 18. 6a. Ethical Objectives
    • 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.
    • Examples of ethical objectives :
      • Reducing pollution
      • Increase recycling
      • Friendly waste disposal
      • Treating employees well.
      • Fairer trade conditions.
    • Pressure from within or outside the business to act ethically may occur .
    • Some examples of Unethical business behavior :
      • Financial dishonesty
      • Environmental neglect
      • Exploitation of workers
      • Exploitation of suppliers
      • Exploitation of customers …
  • 19. 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.
  • 20. 6c. Advantages / Limitations
    • Advantages:
    • Improved corporate image.
    • Increased customer loyalty.
    • Cost cutting.
    • Improved staff motivation.
    • Improved staff morale.
    • Providing accurate information and labeling.
    • Active community work.
    • Having consideration for the environment.
    • Adhering to fair employment practices.
    • Limitations :
    • Compliance costs.
    • Lower profits.
    • Stakeholder conflicts.
    • 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
  • 21. Business and Management : 1.3 Organizational Objectives Lesson 3 Pages 44 - 50
  • 22. 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?
  • 23. 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 .
  • 24. 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 ?...
  • 25. 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…
  • 26. 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  )…
  • 27. 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. …
  • 28. 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.
  • 29. 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:
      • S pecific
      • M easurable
      • A greed
      • R ealistic
      • T ime constrained