Business Organization and Environment Unit one- section 3- Organizational objectives

1. Business organization and evironment
1.3 Organizational objectives
Dr. Fereshteh Mohammadian

2. Vision and Mission
• Vision Statement is more
forward looking and speaks to
the long-term aims and highest
aspirations of a business.
• Mission Statement is more
grounded in the aim of
accomplishing objectives to
achieve the mission, and
intermediate step on the way to
the vision.
The two statements should complement each other.

3. Vision Mission
Concept What do we want? What are we doing and why?
Purpose Point to the future. (would like to see) Where the business is now, what needs to be
done in order to achieve the vision.
Audiences To internal stakeholders: inspire and
motivate employees.
For external stakeholders: binds them to
the business by giving a sense of shared
beliefs.
To internal stakeholders: provides a means for
accountability by defining key performance
indicators.
For external stakeholders: measures how
successful the business is at achieving its
vision.
change As an expression of the business core
values, should never change.
In a world of dynamically changing external
environments , a mission statement may need to
be modified to meet new circumstances.

4. Aims, objectives, strategies, and tactics
• Aims: the long-term goals of business (what it wants to
achieve in the future).
• Objectives: the medium- to short term goals that clarify how
the business can reach its vision. (a mission summaries the
objectives).
• Objectives are in the following three forms:
– strategic
– tactical
– operational

5. Vision and 3 types of objectives
Vision (summary of aims)
-long-term and
highest aspiration
Strategic objectives
-long-term goals
-to achieve the
aims
Operational objectives
-day to day goals
-to reach tactical
objectives.
-medium or short term
goals
-to achieve strategic
objectives
Tactical objectives

6. The hierarchy of objectives
Aim
-a few
-set by entrepreneur or CEO
-should be rather general
e.g.: to be the most
successful car dealership in
the city
Strategic objectives
-more than the aims
-concrete
-set by set by senior
managers (directors or
executives)
-SMART objectives
e.g.: to have the highest
market share of car
dealerships in the city
Tactical objectives
-more than the strategic obs.
-set by middle managers
e.g.: to hire and retain
enough salespeople so that
the dealership has sufficient
sales people to serve
customers at all times
Operational objectives
-more than the tactical obs.
-set by floor managers/
workers
e.g.: to have the average
amount of time that a
customer waits to be greeted
by a salesperson to be less
than two minutes
An important difference between aims and objectives is that objectives are
concrete and can translate into something specific and measurable.

7. SMART Objectives(goals)
• Specific: objectives should relate to the nature of business, clear
and well defined.
• Measurable: objectives should be measurable to see whether they
have been achieved or not?
• Achievable: they should be realistic, can reduce dissonance and
distraction, and can motivate employee.
• Relevant: set objectives for specific employees in their related area
of responsibility.
• Time-specific: they should have a frame of time or deadline.

8. Business strategy
• A plan to achieve a strategic objective in order to work towards the aims
of the business.
• It is medium to long term and needs to be set by the owners or the
CEOs.
• Strategies are planned and involve careful analysis of:
– Where the business is
– Development of a plan of how to get where the business wants to be(aims)
– How to implement the strategy
– Periodic evaluation process to determine whether the plan is working or after a
specific of time, has worked.

9. Business tactic
• A plan to achieve tactical objectives in order to work
towards business strategies.
• It is short term and should be set by middle
managers.
• Easier to change
• Less close to the long term health of the firm and
more focus on how to achieve measurable targets
within the strategy.

10. The need for organizations to change objectives
• Businesses often need to change strategic , tactical and day to
day objectives.
• The reasons for changing these objectives are:
– The internal environment (refers to changes in the conditions within
the business)
– The external environment (refers to changes outside of the business
that has a bearing on its operation or performance)

11. Internal environment changes
• Leadership: change of aims and objectives by changing the leadership and its style
• HR: altering the objectives by changing the conditions related to HR
• Organization: rethinking of objectives through organization’s mergering or
acquisition/ modification of some business aspects by internal pressure /changing
strategic or tactical objectives because of interconnectedness of business function
• Product: change of strategic and tactical objectives for product performance in
marketplace
• Finance: change in strategic and tactical objectives by changing of financial
circumstances (fewer or decreased finance or world recession)
• Operations: changes objectives because of innovating operations (not just
development of production stage or delivering of core service or product) or
everyday reasons(relocation of a factory)

12. External environment changes (STEEPLE)
• Social: reappraise the objectives by social change(increase the
number of women in universities) or cultural change (increased
preference for expensive coffees).
• Technological: products can be rendered obsolete or uncompetitive
because of technological innovation or development of new
methods for cheaper production.
• Economics: changes in market conditions( new competitors) or
changes in economy (global financial crisis)
• Ethical: quick or slow changes of social values (ethics in lending,
diversity in hiring, attentiveness to sexual harassment, product
safety and sustainability)

13. • Political: drastic political change will put at risk the investment
or operations of a business outside or inside home such as
election and its effect on the legislature of a country, and
sometimes unexpected political change(a scandal, a crime, or
even an accident)
• Legal: changes in legislation responsibility from one party or
coalition to another or legal environment
• Ecological: growing environment awareness and the “green”
revolution (emergence of hybrid cars, products sustainability)

14. Ethics
Ethics are concerned with what is ‘right’ or
morally correct.
Business ethics are concerned with
the conduct, principles and patterns
of behaviour in business dealings
that involve ‘doing the right thing’.

15. Ethical behaviour
Examples of ethical behaviour include:
• Not using child labour
• Not testing products on animals
• Respecting the human rights of workers
• Ensuring working hours are not excessive
• Keeping pollution to a minimum

16. Sustainability
Sustainability it concerned with adopting production
methods so that resources can be used now, but can
also be used by future generations.
Sustainable practices include recycling, minimising
waste and replacing resources where possible e.g.
replanting trees used in paper manufacture.

17. Corporate social
responsibility
Corporate social responsibility is concerned
with the responsibilities of organisations to
have positive impact on the all stakeholders
including the local community, society and
the environment.
A company committed to CSR
is intending to act as a good
“corporate citizen”, and have
more than a sustainable
business model.

18. Relation between ethical objectives and CSR
• As part of CSR policy, a business can implement a particular
ethical objective, for example open an early childhood care
center for its employees.

19. Benefits of ethical behaviour
• Improved reputation and confidence
• Increased ability to attract more customers, workers and investors
• Increased employee motivation
• Can be used as a Unique Selling Point in some markets

20. SWOT Analysis
• The SWOT analysis help that a business set the SMART objectives of its strategic plan.
• First stage in planning purposes which help managers perceive strengths, weaknesses,
opportunities and treats
• Stronger SWOT analysis needs wider sources and more reliable data
Weaknesses
Positive factors Negative factors
Strengths
Opportunities Threats
Internal to the business
External to the business
The SWOT matrix

21. • Then the purpose of a SWOT analysis is not to brainstorm the
strengths and weaknesses of a business strategy itself; it is the
first part of the strategy development by identifying the
different strengths and weaknesses of the business. Once they
are known, the SWOT matrix can be analyzed and so a strategy
can be formulated.

22. SWOT analysis and market position
WO- Reorientation strategies
-positive and long-term
-address of weaknesses to use
available opportunities
Strengths weaknesses
SO - Growth strategies
-the most positive short-term
-confident about no big issues in
any other area
ST-Defusing strategies
-neutral & short-term
-defuse the threats by focusing on
core strengths
WT- Defensive strategies
-the most negative short-term
-at the most
-combination of threats and
weakness
Opportunities
Threats

23. The Ansoff Matrix
Market penetration
-Increase market share by productivity or
Different product for different market
segments
-the growth potential of the market
-the strength of customer loyalty
-the power and ability of competitors
i.e. iTunes for MAC
Product development
Genuinely or wholly new product/
upgradable products/ product variation
-effective market research
-having strong research & development
system
-having first mover advantages
i.e. iPod for MAC only
Or iPad2, iPad3 and iPad mini
Market development
New markets or new market segments
-effective market research
-having local knowledge of new market
-having an effective distribution channel
i.e. iTunes & iPod for Windows
Diversification
Lack of familiarity and experience
The untested new product
-effective market research
-testing the attractiveness of the market and
the cost of entering the market
-Recognition of the existing business
-possible tie-ups with experienced
businesses
i.e. iPhone
PresentNew
Present New
Market
product
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