business objectives

• Business objectives


  Provide a foundation for how decisions are made in business
• Parts of this class

  • Vision and mission
  • Common objectives
  • Strategic and tactical objectives
  • CSR
• Assessment objectives


  • Explain mission, vision and common business objectives (AO2)
  • Discuss or examine strategic and tactical objectives, and CSR (Evaluation)
• Vision statement


  Declaration of a business's aspirations - a picture of future success
• Mission statement


  Declaration of a business's purpose - the reason for its existence
• Vision is not something that is too realistic or specific, it is a very general statement
• Mission is the reason for being, it is what the business does to achieve its vision
• Google's vision and mission statements

  • Vision: Provide access to the world's information in one click

  Mission: Organize the world's information and make it universally accessible and useful
• Pros of vision and mission statements

  • Serve as assessment criteria for business decisions and objectives

  Motivate staff and attract customers
• Cons of vision and mission statements


  • Vague and often unclear

  Impossible to agree or disagree with

  Sometimes made just for public relations
• Goals


  What a business wants to achieve in the long term
• Objectives


  Clearly defined short-term or medium-term tasks that a business sets to achieve its goals
• Strategies


  Medium-term or long-term plans, methods, approaches, and schemes used to achieve goals and objectives
• Tactics


  Short-term or medium-term actions taken to achieve objectives
• The hierarchy is: Goals -> Objectives -> Strategies -> Tactics
• Vision and mission statements go through the entire hierarchy of goals, objectives, strategies and tactics
• Levels of management


  Strategic (senior management), Tactical (middle management), Operational (junior management)
• Corporate strategy


  Determines the market in which the business operates
• Generic strategy


  Determines methods of achieving competitive edge
• Operational strategy


  Determines what the business needs to do on a day-to-day basis to make strategies and objectives happen
• Common business objectives


  • Profit
  • Growth
  • Shareholder value
  • Ethical objectives
• Profit


  The difference between revenues and costs
• Growth


  Achieving an increase in market share, total revenue, profit, capital employed, size of workforce, or volume of output
• Shareholder value


  What shareholders get through the company's ability to increase market capitalization and share price, and/or dividends through increasing profits
• Shareholder value


  What shareholders get through companies ability to increase market capitalization and thus share price and/or dividends through increasing the profits
• Ways to increase shareholder value

  • Dividends
  • Increasing share price
• Dividends is a portion of profits that shareholders get depending on how many shares they have depending on their stake in the company
• Not all companies are obliged to pay dividends
• The basic investment strategy is to buy low and sell high
• Ethical objectives


  Tasks or targets that go beyond profit making and are in line with moral behavior, sustainability and CSR
• Ethical objectives would be the main objectives for non-profit organizations or for for-profit organizations that are social enterprises
• Strategic objectives


  Objectives set at the strategic level that apply to the entire company
• Tactical objectives


  Objectives about how to make strategic objectives happen, set by middle management
• SLAP


  Stakeholders, Long-term and short-term implications, Advantages and disadvantages, Priorities
• The SLAP rule is used to evaluate objectives by considering different perspectives and balancing the analysis
• Corporate Social Responsibility (CSR)

  Commitment to benefiting or at least not harming the society and environment, achieved through ethical objectives
• CSR is not a legal obligation but a positive trend in businesses
• CSR has evolved from being treated as charity, to a generic strategy, to underpinning all levels of the business
• Reasons for companies to commit to CSR

  • Enhancing brand image, using as a business strategy, altruism
• Evaluation of CSR


  Improved brand image and customer loyalty, but can be a public relations trick and increase compliance costs