1.3 Organisational Objectives

Vision - An outline of the long-term aspirations of the organisation. It is a source of inspiration for the direction of the organisation.

Mission - A declaration of the underlying purpose of an organisation’s existence, its objectives and its core values. Mission statements are specific and discuss how an organisation plans to achieve its aims and objectives.

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Difference Between Mission and Vision Statements

Statements - A mission statement concentrates on the present and describes what the business wishes to do now; it dictates the desired level of performance and values of the business. Whereas a vision statement focuses on the future and outlines what the company wants to be in the future; serving as a source of inspiration and affirms the impact the business hopes to have.

Use - A mission statement can be used as a cohesive management tool: directing day-to-day expectations and objectives. The culture, actions and behaviour of the business all fall under its mission. Whereas a vision statement is an elusive goal that streamlines business decisions towards a certain direction. Instead of directing daily operations, it gives employees a sense of ultimate purpose for their actions to motivate and inspire them to accomplish.

Aims - The general and long-term goals of an organisation, providing a sense of direction for decision-making processes.

Objectives - Short-to-medium term and specific targets an organisation sets in as instructions to achieve its aims. They are usually realistic and quantifiable targets to be achieved within a time frame, and are derived directly from the aims of an organisation.

Importance of Aims and Objectives

To measure and control - Help monitor the progress of the business in the towards performance markers.

To motivate - Helps to inspire managers and employees to reach a common goal.

To direct - Aids decision-making by providing a clear focus and direction for all individuals and departments.

Strategies - Plans of action to achieve strategic objectives.

Tactics - Short-term methods used to achieve tactical objectives.

Strategic Objectives - Long-term goals in alignment with the aims of a business (i.e. Profit maximisation, growth, market standing, image and reputation). Strategic objectives are more general and the progress of the business in achieving these objectives are evaluated over a period of time.

Tactical Objectives - Short-term goals that regarding a particular section of the organisation. They are specific goals that guide the daily functioning of certain departments or operations.

Ethics - The moral principles that guide decision-making and strategy, based on society’s perspective of what is wrong and right.

Corporate Social Responsibility - A management concept that helps a business integrate ethical concerns in their business operations and interactions with stakeholders. CSR makes a business conscious of its economic, social and environmental impacts on its community and stakeholders.

Advantages of Ethical Behaviour

Improved Corporate Image - Enhances corporate image and public reputation of the business, with positive media coverage raising brand awareness.

Improved Staff Morale - Potential employees may be attracted to work for the business if their values align with the social benefits the business advocates; this gives the business a competitive edge for hiring talent, and enables the business to retain productive employees and improve motivation.

Disadvantages of Ethical Behaviour

Lower Profits - Compliance with ethical standards typically means sacrificing profits for a better cause. The lower revenue will have to be offset by either cutting costs or increasing prices, which will decrease the competitiveness of the product from a price standpoint.

Stakeholder Conflict - Shareholders and financial investors will be concerned with a dramatic adoption of ethical behaviour that threatens to decrease profits and hence reduce the value of the business. 

Subjective Perspectives - All ethical behaviour will incite conflict over opposing perspectives on whether the business’ actions can be justified as ethical.

SWOT Analysis - A useful decision-making tool used to assess the current and future situation of a product, brand, business, proposal, or decision. It analyses internal factors of strengths and weaknesses and external factors of opportunities and threats relevant to the issue under investigation.

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Advantages

Simplicity - Not time consuming and easy to understand. The business can easily take advantage of its strengths, address its weaknesses, deter threats, and capitalise on opportunities.

Decision-Making - Reduces risks of decision-making by providing an objective and logical frame, using foresight and proactive thinking to develop a greater understanding of the business.

Achieving Aims - A SWOT analysis allows a business to critique the feasibility of its objectives.

Disadvantages

Simplicity - It can be too shallow, ignoring in-depth analyses and details, and the model is static whereas a business environment is always changing.

Redundant Information - A SWOT Analysis can produce a lot of information, but will not identify any solutions to problems or alternative decisions

Ansoff Matrix - An analytical tool that helps managers choose and devise various product and market growth strategies.

Market Penetration - Selling existing products in existing markets, often to increase the market share of current products. Businesses usually develop new marketing strategies, such as increasing promotional activities or price strategies, in an effort to boost sales. Market Penetration is low risk due to the business' familiarity with both the product and the target market, which will reduce the need for extensive research and increase the accuracy of forecasts.

Product Development - Selling new products in existing markets, often using product extension strategies (i.e. releasing new versions of iphone) to prolong the demand for goods and services that have reached the saturation or decline stage of their product life cycle.

Market Development - Selling existing products in new markets, by opening new distribution channels or launching marketing campaigns to target a different demographic.

Diversification - Selling new products in new markets; suitable for businesses that have reached saturation and are seeking new opportunities to expand their product portfolio. A common way to diversify is to become a holding company that will own the controlling interest in other diverse companies (subsidiaries).