organizational objectives- AIM tacticspptx

Organizational Objective- Aims strategies

1. Unit 1.3 Business objectives Topic 1: Introduction to Business Management

2. Hierarchy of objectives Objectives provide businesses with a targeted direction for the future. The nature of these objectives are: Vision

3. Vision This is an outline of an organization’s aspirations in the distant future. Vision statements focus on the very long-term. They are expressed as a broad view of where the company wants to be.

4. Mission statements This is a simple declaration of: the underlying purpose of an organization’s existence. its core values. Mission statements focus on the medium to long-term. A well-written mission statement is clearly defined and realistically achievable.

5. Mission Mission is to have a clear proposal. Mission statement tends to be a simple declaration of the underlying purpose of an organization's existence and its core value .

6. Difference between Mission and vision Vision Mission Vision statement addresses to the question “What do want to become”. Vision statement are focused to very long term goals Vision statement are not updated regularly. Vision statement have actually no targets Mission deals with the question what is our business. Mission statement can focus medium or long term. Mission statements are updated frequently. Mission statement have specific targets . The mission statement is the outlines of the business.

7. Aim, Objectives, Strategies and Tactics Aims are long term goals of an organisations . Objectives are short or medium term specific targets an organisation sets in order to achieve its aim. Strategies are plans of action to achieve the strategical objectives of an organisation . Tactics are short-term methods used to achieve tactical objective of organisation .

8. Growth Profit Protecting shareholder value Ethical objectives Common business objectives:

9. Objectives and their importance to a firm Objectives are the goals or targets an organization strives to achieve. They are generally specific and quantifiable and are set in line with the organization’s mission statement. Objectives are important for three reasons:

10. Growth This is usually measured by an increase in its sales revenue or by market share. Growth is essential for survival in order to adapt to ever-changing and competitive business conditions. Failure to grow may result in declining competitiveness and threaten the firm’s sustainability. The biggest risk is not taking any risk... In a world that is changing really quickly, the only strategy that is guaranteed to fail is not taking risks. Mark Zuckerberg, co-founder of Facebook, the world’s largest social media platform 1

11. Profitability Profit maximization is traditionally the main business objective of most private sector businesses. It provides an incentive for entrepreneurs to take risks in setting up and running a business. There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits. Milton Friedman, recipient of the Nobel Prize in Economics in 1976

12. Protecting shareholder value This objective is about earning a profitable return for shareholders in a sustainable way. A challenge for the directors of a firm is to balance short-term profits (in the form of dividends) with an investment in the long-term value of the company. If the customer is happy, the business is happy, and the shareholders are happy. Jack Ma, co-founder of Alibaba Group

13. Ethical objectives Ethics are the moral* principles that guide decision-making and strategy. *Morals are concerned with what is considered to be right or wrong, from the point of view of society. Therefore, business ethics are the actions of people and organizations that are considered to be morally correct.

14. Unethical business practises at Theranos In 2003, Theranos, a blood testing company, claimed to have invented a medical machine that could detect diseases using only one drop of blood. In 2016, the firm was forced to shut down after an investigation showed the machine had technological flaws that produced widespread inaccurate results. In 2018, the CEO and COO were charged with massive fraud by government authorities.

15. Advantages and disadvantages of ethical business practises Advantages Improved corporate image Increased customer loyalty Cost-cutting Improved staff morale and motivation Disadvantages Compliance costs Lower profits Stakeholder conflict The subjective nature of business ethics

16. Strategies Strategies are plans of action to achieve the objectives of an organization. They are: medium to long-term goals. expressed specifically. Fulfilment of strategies will allow an organization to reach its objectives.

17. Examples of strategic objectives Market standing: This refers to the extent to which a business has presence in the industry. Image and reputation: This stems from consumer beliefs and perceptions of a firm. Market share: This is measured by expressing the firm’s sales revenue as a percentage of the industry’s total sales. Microsoft is an example of a firm that has strong market presence, a reputation for high quality products and services and is the world’s leading provider of operating systems 2 .

18. Tactics Tactics are the methods used to enact strategies of an organization. They are short-term and frequently generated in order to enact strategies. Fulfilment of tactics will allow an organization to perform its strategies.

19. Examples of tactical objectives Survival Sales revenue maximisation Many firms had to change their tactical objectives in order to survive the COVID-19 pandemic. These strategies were short-lived due to the temporary closure of firms during the pandemic.

20. Relationships between objectives

21. Changing need of objective Corporate culture Types of size of organisation Private vs public sector Age of business Finance Risk profile Crisis Management External factors

22. Corporate Social Responsibility What is CSR Why companies opt for this What is the benefit of CSR to the society and to the organization.

23. The self-interest attitude- The role of business is to generate profits for their owners. The altruistic attitude –Humanitarian and unselfish behavior. The strategic attitude- This view states that businesses ought to be socially responsible only if such actions help them to become more profitable.

24. Role and nature of CSR To achieve their ethical objectives an increasing number of business have adopted an ethical code of practice and publish this in their annual report. The advertisement of tobacco liquor cigarettes are completely banned The nature of CSR is subjective what is right and wrong. CSR policies and practices should be reviewed from time to time.

25. Role and nature of CSR Businesses are changing their objectives to reflect their part in the preservation of the planet. CSR is complicated when businesses operates in more than one country. It is very important to implement CSR in workplace is more important than donating money for charity.

26. Role and nature of CSR Providing accurate information and labelling Adhering to fair employment practices. Having consideration for the environment Active community work

27. Factors affecting CSR The involvement , influence, and power of various stake holders. Corporate culture and attitude towards CSR Societal expectations , general public awareness of concerns for CSR Exposure and pressure from the media Experience – Quite often it takes a crisis or bad experience to precipitate attention to CSR

28. Factors affecting CSR Compliance costs ie human and financial resources needed to implement CSR policies Laws and regulation ie legislation that govern how firms conduct themselves responsibly.

29. SWOT Strengths- Internal factors that are favorable compared with competitors. Weaknesses are internal factors that are unfavorable when compared to rivals. Opportunities are external possibilities for future development. Threats are external factors that hinder the prospects of an organisation

30. SWOT analysis Competitors analysis – Threats posed by a rival or the strengths of a competitor Assessing opportunity - The development and growth of the organization Risk assessment – The probable effects of investing in a certain project or location Reviewing corporate strategy – The market position or direction of the business. Strategic planning – The decision to diversify or expand overseas.

31. Ansoff Matrix Markets Low High Market Penetration Product development Existing Market Market Development Diversification New Market Product

32. Market Penetration Low risk strategy as business choose to focus on selling existing products in existing markets. Eg to entice customer to repeat the purchase. More competitive price or by improved advertisement to enhance the desirability of the product Attracting new customer Brand might repositioned

33. Product DeVElopment Medium risk growth strategy that involves selling new products in existing markets. This greatly depends rely on heavily on product extension strategies to prolong the demand for goods and service that have reached saturation. This is also a reason to acquire company eg Tata company acquiring Jaguar.

34. Market development It is a medium risk growth strategy that involves selling existing products in new market . An established products is marketed to a new set of customers. Alternative distribution channels such as selling the existing product overseas . New promotional strategies to attract different market segments. Eg : Nike and Adidas

35. Diversification High risk growth strategy that involves selling new product in new markets. It is suitable for the firms that have reached saturation and are seeking new opportunities for growth. One way to diversify is to become a holding company. Holding companies owns enough shares to be able to take control of other businesses. Eg . Time Warner parent company of subsidiaries such as CNN , HBO and Time Inc.

36. Types of Diversification Related Diversification- It occurs when business caters for new customers within the same industry. Eg : Commercial banks diversified to insurance sector. Unrelated diversification: refers to growth by selling completely new products in untapped markets. Eg : Samsung