1.

3 Organisational objectives

Watch this video and make notes

https://www.youtube.com/watch?v=99UPwo8UAlA

1.3.1 Statements

“A leader shapes and shares a vision, which gives point to the work of others.”

“To choose a direction, an executive must have developed a mental image of the possible and
desirable future state of the organisation. This image, which we call a vision, may be as vague
as a dream or as precise as a goal or a mission statement.”
…………………………………………………………………………………………………

• Vision statements – a statement of what the organisation would like to achieve or accomplish
in the long term
- Amazon: “Our vision is to be earth's most customer-centric company; to build a place
where people can come to find and discover anything they might want to buy online.”
- Ben & Jerry's: “Making the best ice cream in the nicest possible way.”
 • Mission statements- a statement of the business’s core aims, phrased in a way to motivate
employees and to stimulate interest by outside groups, a statement that states what the
business does
- College offering IB and A Level qualifications – ‘To provide an academic curriculum in a
caring and supportive environment’.
- BT – ‘To be the most successful worldwide telecommunications group’.
- Nike, Inc. – ‘To bring inspiration and innovation to every athlete in the world’

Distinguish between a vision statement and a mission statement

Mission statements outline the overall purpose of the organization, and what their organization does. A
vision statement, on the other hand, describes a picture of the ‘preferred future’ and outlines how the
future will look if the organization achieves its mission.

Vision vs mission -> future vs purpose

The mission statement is also much more easier to be changed and it could be changed to help achieve
the ultimate vision.

What are the usefulness and limitations of these statements?

Usefulness:
- They quickly inform groups outside the business what the central aim and vision are.
 - They help to motivate employees, especially where an organization is looked upon, as a
result of its mission statement, as a caring and environmentally friendly body. Employees
will then be associated with these positive qualities.
- Where they include ethical statements, they can help to guide and direct individual
employee behaviour at work.
- They help to establish in the eyes of other groups ‘what the business is about’.
Limitations:
- too vague and general so that they end up saying little which is specific about the business
or its future plans
- based on a public relations exercise to make stakeholder groups ‘feel good’ about the
organization
- virtually impossible to analyze or disagree with
- rather ‘woolly’ and lacking in specific detail, so it is common for two completely different
businesses to have very similar mission statements.

a) a mission statement is a statement of the business’ core aims, values, and

purpose that is often used to encourage customers employees or those affected
by the business to have interest to the business
b) for example, the role of Google’s mission statement clearly indicates to others
what google is doing, and what the company’s goal is “to organize the world’s
information and make it universally accessible and useful.” It allows its customers
to understand what is google or what google is trying to do through one simplistic
sentence. Whereas vision statements such as
 1.3.2 Organizational objectives

“If you don’t know where you are going, you will end up someplace else.”

“A person who aims at nothing is sure to hit it.”

…………………………………………………………………………………………………

Without having clear aims and objectives, organizations have no sense of direction or purpose. It
is like getting into a taxi and not knowing where you want to go.

Define and give examples of corporate objectives

specific, realistic and measurable goals which an organisation plans to achieve within a
given period of time, based on the vision statement.

Explain the importance of objectives to organizations.

Business goals and objectives give you the ability to monitor yourself and how much
progress you're making. They provide an important check that keeps you from becoming
blinded by your bias. Goals and objective also help you evaluate your employees, as well as let
employees evaluate themselves.

Explain the following corporate objectives:

1) Growth
The growth of a business – in terms of sales or value of output – has many potential
benefits for the managers and owners. Larger fi rms 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.
- SMART goals
o Specific, measurable, achievable, realistic, time-specific

2) Profit
The profit objective is easy to measure and is achieved when you have more income than
costs. Most private sector businesses have this as their main objective. Profit
maximization is a variation of the profit objective. This is when an organization aims to
make as much profit as possible.
Without the profit the business will not survive,

3) Protecting shareholder value

 Management, especially in public limited companies, take decisions that aim to increase
the company share price and dividends paid to shareholders. These targets might be
achieved by pursuing the goal of profit maximization. This shareholder value objective
puts the interests of shareholders above those of other stakeholders.

4) Ethical objectives
Ethical objectives are targets based on a moral code for the business, for example ‘doing
the right thing’. The growing acceptance of corporate social responsibility has led to
businesses adopting an ‘ethical code’ to influence the way in which decisions are taken.
ethics moral guidelines that determine decision-making
ethical code (code of conduct) a document detailing a company’s rules and guidelines on
staff behavior that must be
followed by all employees

Business ethics are the actions by the organization that are considered to be morally correct. An
ethical business acts morally towards its workers, customers, shareholders and the natural
environment. Being ethical means a business goes beyond merely complying with laws and regulations
but makes choices about what it is prepared to do, and what it will not. Therefore, an ethical business
strategy may exclude behavior, which is legal, but conflicts with the businesses ethical policy.

Examples of ethical objectives related to the circular business model include:

 Disposal of waste in an environmentally safe manner.
 Fairer conditions of trade with low-income countries.
 Increased recycling of waste materials.
 Reducing pollution by using more environmentally friendly technologies and production
processes.

Setting ethical objectives is a process by which an organization apply ethical values to

their targets and establish basic principles about their behaviour in achieving these
targets.
Examples of ethical businesses
https://abcnews.go.com/Business/starbucks-raising-wages-baristas/story?
id=74299264&cid=clicksource_4380645_2_heads_hero_live_headlines_hed

Ethical kids clothing company Frugi to launch rental collaboration | Fashion industry | The Guardian
https://www.theguardian.com/money/2022/aug/25/british-gas-to-donate-10-of-profits-to-struggling-
customers?CMP=Share_AndroidApp_Other

https://edition.cnn.com/2020/06/15/business/unilever-climate-change-commitments/
index.html
Volvo to go fully electric by 2030 - CNN
https://www.theatlantic.com/news/archive/2017/07/volvos-electric-future/532659/
Luxury car brand Jaguar to go all-electric by 2025
https://abcnews.go.com/Lifestyle/wireStory/luxury-car-brand-jaguar-electric-2025-
75906598

Coca-Cola company trials first paper bottle - BBC News

McDonald’s announces big changes to menus and restaurants to 'look after the planet' - Mirror Online

Ethical policies of McDonalds

Home (mcdonalds.com)

Examples of unethical business behaviour.

https://www.theguardian.com/business/2022/aug/18/po-ferries-owner-reports-record-breaking-
profits-after-mass-sacking?CMP=Share_AndroidApp_Other

Facebook whistle blower revealed on '60 Minutes,' says the company prioritized profit over
public good
https://www.cnn.com/2021/10/03/tech/facebook-whistleblower-60-minutes/index.html
Supermarkets vow to cut ties with meat suppliers found to exploit workers | Meat industry | The
Guardian
Watch Food Inc. https://www.youtube.com/watch?v=2KpaKi3IOJs

https://www.cnbc.com/2021/10/05/tesla-must-pay-137-million-to-ex-worker-over-hostile-
work-environment-racism.html

Explain the advantages and disadvantages of a business implementing ethical objectives.

Advantages:

- provide a competitive advantage in terms of customers

- improve employee happiness
- attract more investors
- better for society
o enhances the law by outlining acceptable behaviors beyond government
control
- helps build internal stakeholders’ loyalty

disadvantages:
 - limited ability to maximize profit
- time consuming to implement the practices
- Higher costs – e.g., sourcing from Fairtrade suppliers rather than lowest price
- Higher overheads – e.g., training & communication of ethical policy
- A danger of building up false expectations

http://i.chinadaily.com.cn/newsdata/news/201801/14/487920/article.html

The Importance of Running an Ethical Business (product-ivity.com)

1.3.3 Strategic and tactical objectives

Strategies are the medium- and long-term plans of actions to achieve the strategic objectives of
an organization. Tactics are short-term methods used to achieve an organisation’s tactical
objectives.

(a) Tactical objectives

Define ‘tactical objectives’

short- or medium-term goals or targets which must be achieved for an organisation
to attain its corporate objectives

Explain the following tactical objectives:

(a) Survival
This is likely to be the key objective of most new business start-ups. The
high failure rate of new businesses means that to survive for the first two
years of trading is an important aim for entrepreneurs. Once the business has
become firmly established, then other longer-term objectives can be
established.

(b) Sales revenue maximization.

This could benefit managers and staff when salaries and bonuses are
dependent on sales revenue levels. However, if increased sales are achieved
by reducing prices, the actual profits of the business might fall.
(b) Strategic objectives’

Define strategic objectives

Strategic planning lays out the long-term, broad goals that a business or individual
wants to achieve. Long term goals

Explain the following strategic objectives:

1) Market standing
Market standing refers to the position of an enterprise in relation to its
competitors. A business enterprise must have a strong standing in terms of
offering competitive products to the customers and also serve them to their
satisfaction.

2) Image and reputation

Reputation management strategies involve a blend of internet monitoring
and message control, to identify what is being said about a brand online to
proactively and reactively put out positive, on-brand messages which help to
form positive perceptions within target audiences

3) Market share
Market share is seen as the percentage of sales, the extent of control by a
company. Increasing market share is the ultimate goal of any business.
Market share growth is an unavoidable objective of a comprehensive
marketing plan. Tracking the company's rate of new customer acquisition is
an effective way to gauge a marketing plans contribution to growing market
share.

What tactics or strategies is your chosen social enterprise using to achieve its
objectives?
1.3.4 Corporate Social Responsibilities (CSR).

http://textbook.stpauls.br/business_organization/page_42.htm
http://www.tutor2u.net/business/presentations/strategy/csr/default.html

“Doing good is good for business”

Explain what is meant by a ‘socially responsible business’

A socially responsible business (SRB) is a generally for-profit venture that seeks to leverage
business for a more just and sustainable world.

Define and give examples of CSR (corporate social responsibility)

Corporate social responsibility is a form of international private business self-regulation

which aims to contribute to societal goals of a philanthropic, activist, or charitable nature
by engaging in or supporting volunteering or ethically oriented practices.
e.g.

• Reducing carbon footprints.

• Improving labor policies.

• Participating in fairtrade.

• Diversity, equity and inclusion.

• Charitable global giving.

• Community and virtual volunteering.

• Corporate policies that benefit the environment.

• Socially and environmentally conscious investments.

CSR policy functions as a self-regulatory mechanism whereby a business monitors and ensures
its active compliance with the spirit of the law, ethical standards and international norms.

In some CSR models, a firm's implementation of CSR goes beyond compliance and engages in
"actions that appear to further some social good, beyond the interests of the firm and that
which is required by law."

CSR aims to embrace responsibility for corporate actions and to encourage a positive impact on
the environment and stakeholders including consumers, employees, investors, communities,
and others.
Example of CSR by Coca Cola

http://www.shanghaidaily.com/business/consumer/CocaCola-partners-upgrade-Clean-Water-
Project/shdaily.shtml

http://www.bbc.com/news/business-42403021
https://www.philstar.com/business/2019/10/17/1960688/sustainable-transformation-coca-
cola-packaging?_gl=1

Explain the reasons why businesses are increasingly setting ethical objectives

- Business image
- Protection of their own interests
- to protect the interests of the business community as a whole so that the public will
have trust in it
Discuss the importance to a business of being ethical and of being socially responsible.

https://www.udemy.com/blog/importance-of-business-ethics/

Not just the supply chain: Going green is hiking prices, too - CNN

Conclusion of ethical objectives

Ethical practices can go beyond just making sure your business does not have a negative impact
on people and the environment.  It can also mean dedicating a portion of your company’s time
and resources to actively improving these areas – for example investing in building in developing
countries, investing in community programs, lobbying for political change, encouraging
employees to donate their time and expertise to other projects (at your company’s expense) and
so on.  This level of Business Ethics is the most commendable and should be something all
companies strive for in this day and age, so that higher standards can be achieved for all in the
future.