6 Objectives

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6 Objectives

  1. 1. BUSINESS OBJECTIVES <ul><li>It is important for a business to </li></ul><ul><ul><li>have well defined objectives (goals) </li></ul></ul><ul><ul><li>be clear about what it wants to achieve </li></ul></ul><ul><li>Business objectives will be </li></ul><ul><ul><li>determined by its stakeholders </li></ul></ul><ul><ul><li>used to determine success </li></ul></ul>
  2. 2. MISSION STATEMENTS <ul><ul><li>immediate and long term objectives </li></ul></ul><ul><ul><li>express objectives in ‘qualitative’ terms </li></ul></ul><ul><ul><li>often focus on the needs of customers </li></ul></ul><ul><ul><li>identifying specific service to be provided </li></ul></ul><ul><ul><li>issued to customers, employees </li></ul></ul><ul><ul><li>displayed in reception areas </li></ul></ul>
  3. 3. <ul><li>in the long run all businesses must make profit to survive </li></ul><ul><li>firms may sacrifice short term profit maximisation for long term profits </li></ul><ul><li>small firms may not wish to maximising profit if it means </li></ul><ul><ul><li>increasing workforce/longer hours </li></ul></ul><ul><ul><li>VAT threshold </li></ul></ul>MAXIMISING PROFIT
  4. 4. GROWTH <ul><li>Growth may mean </li></ul><ul><ul><li>survival </li></ul></ul><ul><ul><li>domination of market </li></ul></ul><ul><ul><li>economies of scale </li></ul></ul><ul><ul><li>diversification </li></ul></ul><ul><ul><li>reduced business risk </li></ul></ul><ul><li>Lack of growth may mean </li></ul><ul><ul><li>loss of competitiveness </li></ul></ul><ul><ul><li>decline in demand </li></ul></ul><ul><ul><li>closure </li></ul></ul>
  5. 5. SURVIVAL <ul><li>There are 3 main times when a business may consider survival to be one of its main objectives: </li></ul><ul><ul><li>early stages of trading </li></ul></ul><ul><ul><ul><li>lack of experience </li></ul></ul></ul><ul><ul><ul><li>lack of resources </li></ul></ul></ul><ul><ul><ul><li>competition </li></ul></ul></ul><ul><ul><ul><li>unforeseen problems </li></ul></ul></ul><ul><ul><ul><li>limited recognition </li></ul></ul></ul><ul><ul><li>during a recession </li></ul></ul><ul><ul><li>threat of takeover </li></ul></ul>
  6. 6. REPUTATION <ul><li>Image and social/corporate responsibility has become increasingly important in business because of </li></ul><ul><ul><li>legislation which favours consumers </li></ul></ul><ul><ul><li>changes in social attitudes </li></ul></ul><ul><ul><li>competitive pressure </li></ul></ul>
  7. 7. MAXIMISING SALES <ul><li>sales revenue maximisation is NOT the same as profit maximisation </li></ul><ul><li>ownership and control are separate </li></ul><ul><li>salaries linked to annual turnover </li></ul>
  8. 8. SOCIAL RESPONSIBILITY <ul><li>Behaving in a manner that takes all stakeholders into consideration: </li></ul><ul><li>Staff welfare </li></ul><ul><li>Prompt payment of suppliers </li></ul><ul><li>Ethical trading </li></ul><ul><li>Consideration of local community </li></ul>
  9. 9. Managerial Objectives <ul><li>ownership and control are separate </li></ul><ul><li>management able to take control </li></ul><ul><li>management aims may be </li></ul><ul><ul><li>maximise personal salary </li></ul></ul><ul><ul><li>maximise their departmental budgets </li></ul></ul><ul><ul><li>improve their status and recognition </li></ul></ul><ul><ul><li>maximise no of employees in their charge </li></ul></ul><ul><ul><li>maximise their leisure time </li></ul></ul><ul><ul><li>delegate as much work as possible </li></ul></ul><ul><ul><li>maximise fringe benefits </li></ul></ul>
  10. 10. Provision of a Service <ul><li>May be main objective of </li></ul><ul><ul><li>public sector body </li></ul></ul><ul><ul><li>voluntary sector organisation </li></ul></ul>
  11. 11. What determines business objectives? <ul><li>size and status </li></ul><ul><li>age of business </li></ul><ul><li>sector - public, private or voluntary </li></ul><ul><li>whether long-term or short-term objectives </li></ul><ul><li>external pressures </li></ul><ul><li>internal pressures </li></ul><ul><li>risk </li></ul><ul><li>culture </li></ul>

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