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1.3 Organizational Objectives

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Ryan erica

on 14 September 2012

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Transcript of 1.3 Organizational Objectives

1.3 Organizational Objectives Aims: general long-term goals of an organization
Mission Statement: Document were aims are expressed Aims and Objectives Objectives: the short term and more specific goals of an organization based on aims Presentation by:
Ryan Santistevan,
Gabbie Potter
Randi Gardner Strategic Objectives Strateic Objectives or Primary Objectives:
Refer to the longer term aims of a business
organization Profit Maximazation:
Profits are maximized when the positive difference between revenues and costs of production is at its highest level
Some businesses have busier times than others and in order to survive, these businesses must maximize profit in high times. Growth:
Measured by increase in sales or market shares.
Economies of Scale, Market Power, and Reduced Risks. For Example: Six Flags has an image and a reputation for fun and safe entertainment. This can be seen in the following advertisement. Strategic Objectives
Cont. Image And Reputation:
Businesses have to try to enhance their image and reputation to keep employees motivated and proud, and to keep customers interested and loyal Mission Statements and vision statements VISION: Every person in business should have an ideal situation planned for the future.
Vision Statement: The business’s apirations in the distant future.
Example: “to be the leading sports brand in the world” is Adidas’s vision. Mission Statements and Vision Statements Cont. Difference Between Missions and Vision Statement:
Many times they are mistaken for one another. Vision Statements:
Focused on the very long
Updated from time to time
Allows people to see what
COULD be, not necessarily
what is. Mission Statements:
Focuses on the medium or long term
Updates more frequently.
The Actual target must be realized,
meaning the
purpose of the
setting. Other names that tactical objectives go by are operational objectives or secondary objectives.
These objectives are short-term objectives that affect a segment the department of a business.
Survival is a tactical objective for many businesses.
Another tactical objective for a business is the sales revenue maximization. (maximizing their sales) Tactical objectives Socially responsible firms are businesses that act morally towards their employees and the local community.
Businesses have responsibilities known as corporate social responsibilities.
An example of this is when a staff member has the daily role to be litter patrol in McDonald’s, so as to clean the restaurant of any trash even if it was not made in the restaurant.
When businesses act in a socially responsible way they receive more praise, this is true in Fortune Magazine, when it says that the top 500 American Businesses donate more than 2%
of their post-tax profits to charity. Corporate Social Responsibility The views:

Free-market CSR attitude: The belief that businesses generate profit for their owners and that the government is responsible for sorting out the social problems.

Altruistic CSR attitude: This views is that businesses do what they can to improve the society, regardless of whether the actions help or increase their profits.

Strategic CSR attitude: View that businesses ought to be socially responsible only if such actions help the business to become more profitable. The views:

Free-market CSR attitude: The belief that businesses generate profit for their owners and that the government is responsible for sorting out the social problems.

Altruistic CSR attitude: This views is that businesses do what they can to improve the society, regardless of whether the actions help or increase their profits.

Strategic CSR attitude: View that businesses ought to be socially responsible only if such actions help the business to become more profitable. The Importance of Objectives Target setting is vital (having clear aims and objectives) Organizational aims are set for these reasons.

They give businesses a sense of direction, purpose, and unity.

Form the foundation for business decision-making.

Encourage strategic thinking.

Provide for measuring the performance of the workers. Many groups are affected by the activities of a business.

These groups are known as stakeholder groups

Stakeholders have different expectations of the business.

Ex: Shareholders want profitability while community wants social responsibilities. Different levels of business objectives

Corporate objectives: whole organization’s goals.

Departmental objectives: objectives for a certain section in a business

Individual objectives: goals set for/by individual employees Short-Term Versus Long-Term Strategy: any plan or scheme to achieve long-term goals of a business

Tactics: short-term was of reaching objectives Several levels of strategy:

Operational strategies: day-to-day methods used to improve efficiency of the organization

Generic strategies: strategies that affect the whole business

Corporate strategies: aimed to reach long-term objectives Market Standing:
refers to the extent to which a firm has presence in the marketplace
business normally needs to offer something extra special For Example: Wal-Mart has high market standing for being the world's largest retailer. Ethical Objectives Ethics: moral principles that guide decision-making Morals: right vs. wrong, from society Ethical businesses try to be morally correct

Treat customers and workers well

Interact well with natural environment

Businesses can be pressured to become more ethical Examples of unethical business

Financial dishonesty

Neglecting the environment

Mistreating staff

Taking advantage of suppliers

Taking advantage of the customer Ethical code of practice: part of a business’s mission statement that helps them achieve ethical objectives

Advantages of ethical behavior

Improves the overall business image

Customers more loyal

Cuts costs

Motivated staff Ways businesses try to meet social responsibilities

Providing accurate information and labeling

Working in the community

Considering the environment

Providing decent working conditions Limitations of ethical behavior

High costs of acting ethically

Lower profits

Ethical dilemma: ethical decisions=less profit

Upset stakeholders

Ethical behavior is subjective Social Auditing Social Auditing:
An independent assessment of how a firm's actions affect society.
Environmental Audit:
Indpendent review of a firm's activities that examines only the impacts on the environment Possible Policies to deal with a firm's impacts on society:
Using renewable and sustainable resources
Using reputable and socially responsible suppliers
Systems that cater for the well-being of employees
Establishment of an ethical code of conduct
Methods to monitor management and employee commitment to CSR policies Possible Limitations in using social audits:
Must have sufficient financial and other resources
May publicize weaknesses of the business
May harm image and reputation Higher Level Extension: Changes in Corporate Objectives and Strategy over Time Many factors affect the objectives of an organization. Internal factors:
Corporate culture (Customs of a business)
Type and size of organization
Age of the business
Risk profile of key stakeholders
Whether or not it’s in the private or public sector External factors
State of the economy
Government restrictions
Presence/power of pressure groups Corporate strategy: tools used to achieve objectives

Corporate strategy changes just like the objectives do. Higher Level Extension: Changes in Society's Expectations of Business Behavior Business views correspond with societal norms. This means that businesses need to review objectives occassionally. CSR is subjective. Right and Wrong is based off of public opinion which changes over time. Pressure Groups and Increased Education can lead to change in societal views. Organizational Objections and Business Strategies The performance of a business can be judged by the extent to achieve a strategy, thus creating a clear vision and mission statement.

Businesses need to be able to assess the effectiveness of their aims and objectives. Organizational Objectives should be: SMART S: Specific- Precise and Succinct
and not vague M: Measurable- quatifiable to increase market share, raise sales revenue or reduce staff by a certain amount A: Agreed- Accepted and Understood by the organization R: Realistic-Firms should ensure that they are not attempting too much given their limited resources T: Time constrained- There should be a set time frame to achieve the objectives.
In the pursuit of organizational objectives, managers should must be aware of potentially conflicting objectives
Organizational objectives are also likely to change over time. An example is when there is an economic downturn and they have to adapt the company to the changes. Review Questions 1-12 1) Why are objectives important to business organizations?
Without objectives businesses have no direction or purpose.
3) How do mission statements and vision statements differ from one another?
Mission statements and vision statements differ because mission statements are broad, outlines of what a business' purpose is; where as a vision statement is the statements of the business' future long-term goals. 2) What is the purpose of a mission statement?
The purpose of a mission statement is to create a focus for a business, in how they want their target market to see them. It is like a genuine hook to reel in people. 4) Differentiate between 'strategic objectives' and 'tactical objectives'.
Public Sector organizations tend to aim to provide for the public rather than try to make a profit. 5) How might objectives of organizations in the public sector differ from those in the private sector?
Objectives of organizations in the public sector differ from those in the private sector by the public sectors not aiming to profit maximize, but to provide for the general public. 6) When might survival be an important organizational objective?
It could be an important organizational objective for new businesses and old businesses just in case problems arise in your business. 7) What external and internal factors affect changes in organizational objectives? Internal- Corporate culture, type and size of organization, age of the business, finance, risk profile of key stakeholders

External- State of economy, government restrictions, power of pressure groups 8) Why might a business consider the objectives of the local community in which it operates?
Their customers know what the needs and wants of the community are. 9) What is 'social auditing' and why might a business choose to carry out a social audit despite the cost of doing so?
Social Auditing is when businesses hire people to assess their company based on social standards and norms. Businesses might want to do this because it's makes the company look better. 10. 10) What does it mean to set SMART objectives?
Specific, Measurable, Agreed, Realistic, Time Constraine 12. Two recent changes in society’s expectations of business behavior are
1.) A new international financial web.
2.)Greater speed of events 11) Why do objectives have changing significance in different situations?
Objectives have changing significance in different situations because not every situation will have the same end result. One business could want to make money as an objective while another business may want to promote world peace for their objective. Grey Box 1.3.3 Grey Box 1.3.5 Ronald McDonald House Charities is a non-profit organization, created by McDonald’s. The mission of the charitable organization is to “directly improve the health and well-being of children”. Operating in around 50 countries, RMHC has raised more than $430 million around the world to help seriously ill children and their families.

Burger King, the world’s second largest fast-food chain and the largest rival of McDonald’s, announced it would use supplies of humanely sourced meat and eggs from 2007. Burger King gives priority and better deals to suppliers that provide cage-free chickens and free-range pigs. Animal rights groups commended the company’s decision, hoping that other retailers and suppliers would follow the move.

a) Ethical business behavior is making a moral decision . This can be applied to the case study. McDonald’s created RMHC; this was a moral decision that allowed McDonald’s to do the right thing and help seriously ill children around the world. This is McDonald’s expressing ethical business behavior. Burger King also showed ethical business behavior by trying to provide for a better natural environment when they A. Social auditing for MySpace is how well it follows ethics and morals on their web page. It also looks into how well they handle circumstances on their cite that don't follow their set of rules and guidelines. This also might look into what type of image they are putting out there and if it lines up with social norms, and if the technology is advanced enough to keep up with the growing technology of the world.
B. Firms such as Myspace need to pay attention to the social responsibilities such as Privacy. Also they need to have a rule of being a certain age to be apart of their product because they could have an innocent child with an account from a friend or cousin and he/she posts their personal information.
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