The document discusses organizational objectives and how they function to control, motivate, and direct a business. It explains that objectives can be set at different levels and should meet the SMART criteria. The relationship between aims, objectives, strategies, and tactics is explored. Common strategic objectives like profit maximization and growth are outlined. The importance of ethics, corporate social responsibility, and social/environmental auditing are also summarized.

1. Organizational Objectives

2. Four key questions
Where are we now?
Where do we want to be?
How do we get there?
How do we know we are there?

3. Organizational Objectives
Have three key functions:
◦ To control
◦ To motivate
◦ To direct

5. Organizational Objectives
Businesses set objectives for several
reasons:
◦ Give a sense of direction, purpose and unity
◦ Are foundation to decision-making
◦ Can help to encourage strategic thinking
◦ Provide a measurement and controlling the
performance

6. Business objectives
Can be set at different levels:
◦ Corporate objectives
◦ Departmental objectives
◦ Individual objectives

8. Mission Statements
“Why we exist”
"Who we are and what we do"
Nestlé is the world's leading nutrition, health
and wellness company. Our mission of "Good
Food, Good Life" is to provide consumers with
the best tasting, most nutritious choices in a
wide range of food and beverage categories and
eating occasions, from morning to night

9. Nike’s mission statement

10. Managers need to ensure
that decisions are
consistent with the
organization’s mission
statement

11. Vision Statements
'An Image of the future we seek to
create'
They contain details of the company's
future - its vision (the future plans with
aims and objectives). These types of
statements focus on tomorrow
Focused on the long term

12.  COCA COLA
To achieve sustainable growth, we have established a
vision with clear goals.
Profit: Maximizing return to shareowners while being
mindful of our overall responsibilities.
People: Being a great place to work where people are
inspired to be the best they can be.
Portfolio: Bringing to the world a portfolio of beverage
brands that anticipate and satisfy peoples; desires and
needs.
Partners: Nurturing a winning network of partners and
building mutual loyalty.
Planet: Being a responsible global citizen that makes a
difference.

13. Avon Products Vision Statement
"To be the company that best
understands and satisfies the
product, service and self-fulfillment
needs of women - globally."

15. Mission and Vision Statements
Critics argue that mission
statements are no more than PR
stunts. After all, the ultimate
purpose of most businesses is to
maximize profits.

16. Effective business objectives
Usuallymeet the SMART criteria
What’s SMART?
SPECIFIC
MEASURABLE
ACHIEVABLE
REALISTIC AND RELEVANT
TIME-SPECIFIC

17. SMART criteria - Specific

18. SMART criteria - Measurable

19. SMART criteria - Achievable

20. SMART criteria – Realistic and
relevant

21. SMART criteria – Time-specific

22. Here’s a list of business objectives
A supermarket chain has set itself the
objective of increasing the market share
from 20% to 80% in three years.
An international school sets itself the
Which of
these objective of becoming the best in the
objectives
do you think world
are the most A taxi company has the objective of
useful, and
which aren’t
very helpful?
increasing gross profit by 3% this year
Explain you A football club has set the objective of
reasoning.
improving its future performance

23. Here’s a list of business objectives
An electricity company has set itself the
target of reducing consumer complaints
from 8% to 6% within the next 12 months

24. Aims
The general long-term goals of an
organization.
Vague, unquantifiable statements such as:
“to provide high quality education to the
local community” or “to promote social
and environmental integrity”.

25. Objectives
Short term and more specific goals of and
organization, based on its aims.
More likely to be quantifiable and
measurable.
For example, a school may set the
objective “to achieve a 95% pass rate at
IB examination level”.

26.  Exam tip! What’s the difference between ‘aims’
and ‘objectives’?

27. Short term vs. Long term objectives
Strategy
term used to refer to any plan or scheme
to achieve the long-term aims of a
business.
HOW DO WE GET THERE?
Tactics
Short-term ways that firms can use to
achieve their aims and objectives.

28. Tactics
Activities a business will employ to
implement its strategy on a day-to-day
basis and are put into action at the
individual department or employee level.
They should contribute positively to the
overall strategy of the business.

29. Tactics
Departments will tend to set their own
short-term departmental objectives:
◦ Sales department planning to raise sales by
$20,000 within the next year
◦ Personnel department planning to keep staff
turnover below 10%
Short-term objectives tend to refer to
targets set for the next 6-12 months

30. Strategies
Long-term plan illustrating how the
business will achieve its objectives.
Strategic objectives, therefore, represent
significant long-term goals.
Long-term objectives function as starting
points, to make it easier to prioritize and
allocate resources and to coordinate
short-term, tactical objectives

31. Strategic Objectives – common
objectives
Profit maximization
Profits are essential for rewarding
investors in a business and for financing
further growth, and are necessary to
persuade business owners and
entrepreneurs to take risks. Profit
maximization means producing at the
level of output where the greatest
positive difference between total revenue
and total costs is achieved

32. Profit maximization
Peak/quiet
periods
Dividends

33. Growth
The growth of a business – in terms of sales or
value of output – has many potential benefits
for the managers and owners. Larger firms will
be less likely to be taken over and should be
able to benefit from economies of scale.
Managers may gain higher salaries and fringe
benefits. Businesses that do not attempt to
grow may cease to be competitive and,
eventually, will lose their appeal to new
investors.

34. Growth
Its benefits could include:
◦ Economies of scale
◦ Market power
◦ Reduced risks

35. Image and reputation
A bad image, perhaps portrayed by the media,
can turn customers against a firm’s products
and services.
Increasingly, businesses are delivering better
levels of customer service, such as better on-
site facilities, after-sales care and trained
customer relations staff.
Suppliers prefer to do business with firms that
are reputable and reliable.
Employees are likely to be motivated of their
business if it has a positive corporate image

36. Market standing
Itrefers to the extent to which a firm has
presence in the marketplace.
People need to feel the business offers
something extra special.
Microsoft
Walmart
Toyota

37. Exam tip
What’s the link between aims, objectives
and strategies?
Become the # 1 supplier of a product
Increase market share
Expanding into overseas markets

38. Ethical objectives
What are ethics?
What are morals?
An ethical business is likely to be responsible for
its treatment towards its customers, workers,
shareholders and the natural environment.
http://www.youtube.com/watch?v=Dij_AjxoGyU
http://www.youtube.com/watch?
v=mQj2u4ap5bo&feature=related

39. UNEthical behavior
Financial
dishonesty

40. Environmental neglect

41. Exploitation of
suppliers

42. Workforce exploitation

43. Consumer
exploitation

44. Advantages of being ethical
Improved corporate image
Increased customer loyalty
Cost cutting
Improved staff motivation
Improved staff morale

45. Limitations of being ethical
Compliance costs
Lower profits
Stakeholder conflict

46. CSR

To whom is a business
answerable?

Should business activity be solely
concerned with making profi ts to meet
the objectives of shareholders and
investors or should business decisions
also be infl uenced by the needs of other
stakeholders?

47. CSR – Corporate Social Responsibility
When a firm fully accepts its legal and
moral obligations to stakeholders other
than investors, it is said to be accepting
corporate social responsibility (CSR).
McDonald’s litter patrol
Coca Cola house building

48. CSR – Corporate Social Responsibility
Examples of recent CSR developments
include:
● the growth in the number of firms that
promote organic and vegetarian foods
● increasing numbers of retailers
emphasizing the proportion of their
products made from recycled
● businesses that refuse to stock goods that
have been tested on animals or foods
based on genetically modified ingredients.

49. Social/Environmental Auditing
Environmental:
Environmental assesses the impact of
a business’s impact on the environment
An environmentalau dit would check the
pollution levels, wastage levels, energy
use, transport use and recycling rates of
the business and compare them with
previous years, pre-set targets and
possibly other similar businesses.

50. Social/Environmental Auditing
Social:
Social an independent report on the
impact a business has on society. This can
cover pollution levels, health and safety
record, sources of supplies, customer
satisfaction and contribution to the
community

51. Social audits can include an environmental audit, but they give details
of other impacts on society too. These include:
● health and safety record, e.g. number of accidents and
fatalities
● contributions to local community events and charities
● proportion of supplies that come from ethical sources,
e.g. Fairtrade Foundation suppliers
● employee benefi t schemes
● feedback from customers and suppliers on how they
perceive the ethical nature of the business’s activities.