Business Aims and Objectives

9 Key excerpts on "Business Aims and Objectives"

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  eBook - ePub

  Organisations and the Business Environment

  • Tom Craig, David Campbell(Authors)
  • 2012(Publication Date)
  • Routledge

    (Publisher)

  Organisational and Business Objectives

  DOI: 10.4324/9780080454603-2

  Learning Objectives

  After studying this chapter, students should be able to describe:

  • mission, vision and values of an organisation;
  • the purpose of an organisation’s mission statement;
  • the complex nature of defining business goals and objectives;
  • the most important business objective;
  • the stakeholders;
  • the view that stakeholder coalitions determine the business objectives;
  • the view that an organisation’s principals essentially determine the business objectives.

  2.1 Vision

  This is an aspirational view of the desired state of the organisation at a point in the future. The timeframe is dependent on the nature of the organisation and its environment but a typical vision would be set for 3–5 years ahead and reviewed annually in line with actual results and changing circumstances. The vision is in effect a statement of strategic intent that serves to focus the energies of the organisation management towards the setting and achievement of specific goals and objectives. Its aspirational nature means that it is consistently revised, as each set of goals are achieved, and further stretching future situations are established.

  2.2 Mission

  The mission of an organisation is a general expression of the overall purpose of the organisation or, more simply, a broad description of the business it is in – its raison d’être. It broadly defines the scope and boundaries of the organisation, which should be in line with the expectations and values of major stakeholders.

  Mission Statements

  Some organisations find it helpful to provide a concise and clear written statement of their broad objectives. Whilst such statements are called different names, most find the term mission statement

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  Pricing in Business

  • Douglas Hague(Author)
  • 2018(Publication Date)
  • Taylor & Francis

    (Publisher)

  CHAPTER 4

  The Firm’s Objectives

  4.1 INTRODUCTION

  Business objectives are a vast subject, not least because they are important for every conceivable kind of business activity. No manager, at any level in any firm, can do his job without having some sort of objective. But discussion of objectives can, and often does, create a tremendous amount of confusion. Most people in business are reasonably clear what an objective is, but one is less sure how far firms define objectives precisely and pursue them consistently. In this book, we shall see examples of the problems that arise. Moreover, the confusion of terminology is undeniable. Words like aims, aspiration levels, goals, objectives, plans and targets are sometimes used as synonymous with each other and sometimes not.

  The word ‘objectives’ is a good one because it covers the whole field and is widely accepted. There is no point in adding further confusion by trying to introduce a new term. We shall therefore use the word ‘objectives’ to describe the whole range of firms’ plans, intentions and wishes. In this chapter, we discuss some of the general characteristics of business objectives in the firms we studied. In Chapter 5 , we shall look at the objectives which these firms pursued in pricing. In Chapter 6 , we shall draw some conclusions about objectives.

  4.2 NON-OPERATIONAL OBJECTIVES

  An important distinction must be made at the beginning of any study of objectives. This is between operational and non-operational objectives. The simplest and most traditional of all statements of objectives is probably that: ‘We are in business to make money’. Alternatively, a firm may say: ‘We are in business to make motor cars’, or ‘to sell transport’. Similarly, a firm may set itself the objective of striving for product or process innovation, of serving the community, or merely of perpetuating itself. Statements like this are very vague indeed. They describe objectives which are ‘non-operational.’ They do not say, or even imply, exactly what action the firm should take to achieve them. At any moment, a number of different courses of action will often be perfectly compatible with each non-operational objective. Indeed, the reason why firms set themselves non-operational objectives is often precisely this. No specific action is prescribed for the manager responsible for day-to-day activities. This vagueness enables individual managers in the firm to work together with a sense of unity and of common purpose, while none of them is committed to any precise action in any particular set of circumstances. Disputes over whether specific objectives are realistic or acceptable are avoided.

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  Strategic Planning for Not-for-Profit Organizations

  • Robert E Stevens, David L Loudon, R Henry Migliore, Stanley G Williamson(Authors)
  • 2013(Publication Date)
  • Routledge

    (Publisher)

  2 Objectives can be defined as clear, concise written statements outlining what is to be accomplished in key areas in a certain time period, in objectively measurable terms. Objectives can be classified as routine, problem solving, innovative, team, personal, and budget performance.

  Objectives can be set at upper organizational levels in key result areas such as growth, finances, physical resources, staff development and attitudes. They are also needed in sub-units, departments, or divisions of an organization. Most important, all organizational objectives must be consistent. Thus, a department’s objectives should lead to accomplishing the overall organization’s goals.

  Objectives serve two fundamental purposes. First, they serve as a road map. Objectives are the results desired upon completion of the planning period. In the absence of objectives, no sense of direction can be attained in decision making. In planning, objectives answer one of the basic questions posed in the planning process: Where do we want to go? These objectives become the focal point for strategy decisions.

  Another basic purpose served by objectives is in the evaluation of performance. The objectives in the strategic plan become the yardsticks used to evaluate performance. As will be pointed out later, it is impossible to evaluate performance without some standard by which results can be compared. The objectives become the standards for evaluating performance because they are the statement of results desired by the planner.

  Objectives have sometimes been called the neglected area of management. In many situations there is a failure to set objectives, or the objectives which are set forth are unsound and therefore lose much of their effectiveness. To counteract this, a management tool called management by objectives (MBO) was developed. It emphasizes the need for setting objectives as a basic managerial process, prpviding coordination of activities at all levels of the organization.

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  Strategic Marketing Planning

  • Richard M.S. Wilson, Colin Gilligan(Authors)
  • 2010(Publication Date)
  • Routledge

    (Publisher)

  This process of moving from the general to the specific should lead to a set of objectives that are not just attainable within any budgetary or other constraints that exist, but that are also compatible with environmental conditions as well as organizational strengths and weaknesses. It follows from this that the process of setting objectives should form what is often referred to as an internally consistent and mutually reinforcing hierarchy. As an illustration of this, if we assume that corporate management is concerned first and foremost with, say, long-term profits and growth, it is these objectives that provide the framework within which the more detailed subset of operational objectives, including market expansion and product-specific increases in sales and share, are developed. Taken together, these then contribute to the achievement of the overall corporate objectives.

  It is these operational objectives that are the principal concern of those in the level below corporate management. Below this, managers are concerned with objectives that are defined even more specifically, such as creating awareness of a new product, increasing levels of distribution, and so on. This hierarchy points in turn to the interrelationship, and in some cases the confusion, that exists between corporate objectives and marketing objectives. The distinction between the two is an important one and is discussed at a later stage in this chapter. However, as a prelude to this, and indeed to the process of objectives setting, there is a need for the strategist to decide upon the business mission. We therefore begin this chapter with a discussion of the role and purpose of planning as the background against which we can more realistically examine approaches to the development of the mission statement and, subsequently, corporate and marketing objectives.

  8.3 The Purpose Of Planning

  In discussing the nature and role of the planning process, Jackson (1975 ) comments that:

  Planning attempts to control the factors which affect the outcome of decisions; actions are guided so that success is more likely to be achieved. To plan is to decide what to do before doing it. Like methods, plans can be specially made to fit circumstances or they can be ready made for regular use in recurrent and familiar situations. In other words, a methodical approach can be custom built or ready made according to the nature of the problems involved.

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  Strategic Marketing Management

  • Richard M.S. Wilson, Colin Gilligan(Authors)
  • 2012(Publication Date)
  • Routledge

    (Publisher)

  manage by objectives. In other words, it is the pursuit of these objectives that should provide the framework both for the planning and control processes. However, for this to work, several guidelines must be adhered to, with objectives being:

  1. Hierarchical: going from the most important to the least important
  2. Quantitative: in order to avoid ambiguity – the objective ‘to increase market share’ is not as satisfactory a guideline as ‘to increase market share by 5 per cent’ or indeed ‘to increase market share by 5 percentage points within 18 months’
  3. Realistic: it is only too easy for objectives to reflect a degree of wishful thinking; instead they should be developed as the result of a detailed analysis of opportunities, corporate capability, competitive strengths and competitive strategy
  4. Consistent: it is quite obviously unrealistic to pursue incompatible objectives; as an example of this, to aim for substantial gains in both sales and profits simultaneously is rarely possible.

  It is also essential that they satisfy the SMART criteria of being Specific rather than general in their nature, Measurable, Actionable, Realistic and Time-based. In the case of marketing objectives, there is also the need for them to be related to or fall out of the corporate objectives.

  Primary and secondary objectives

  Although for a long time economists argued that firms aimed to maximize profits, it is now generally recognized that the modern large corporation, managed by professionals, pursues a far broader and infinitely more diverse set of objectives. As a consequence, traditional views of profit maximization as the principal objective have been challenged by the reality of the behaviour of corporate management. With this in mind, two types of objective can be identified: primaryand secondary.

  Traditionally the primary objective was, as observed above, profit maximization. Other objectives are, however, often seen by managers to be of more immediate relevance and, as Chisnall (1989

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  Strategic Management in the Arts

  • Lidia Varbanova(Author)
  • 2013(Publication Date)
  • Routledge

    (Publisher)

  Setting objectives involves a continuous process of research and decision-making. Setting the right objectives is critical for effective performance management, as well as motivating both personnel and the management team. Objectives also help internal coordination of different activities within an organisation (such as creative, managerial, financial, technical, supportive and marketing activities).

  A common problem in arts practice is the existence of too many, badly structured or illogically connected objectives, as well as objectives that are formulated too broadly. Therefore, it is optimal in a strategic plan to elaborate objectives in a three-dimensional framework (see Figure 4.2 ), considering

  Figure 4.2 Three-dimensional framework for formulating objectives

  • the hierarchy of objectives;
  • whom they target; and
  • the measurability of objectives.

  The first dimension is the hierarchy of objectives. The main (strategic) organisational objectives result from the mission and need to be split into sub-objectives which are much more detailed and cover functional areas or specific activities31 . Figure 4.3 gives an overview of the hierarchy of objectives.

  Figure 4.3 Hierarchy of objectives

  • The main organisational objectives are based on the most important results that the organisation aims to achieve. Usually these objectives are long term; they serve as priority guidelines and are connected with the chosen development strategies (see Chapter 6 ). The basis for formulating these objectives results from the strategic analysis.
  • Functional objectives are decompositions of the main objectives. They are sub-objectives and focus on the main functional areas of the organisation’s activities. Depending on the type of organisation (state, nonprofit or business), they may be angled differently, for example
    • managing personnel development and building public trust (organisations in the public sector);
    • focused around increasing profit margins, developing commercial programmes or attracting investors (commercial organisations);

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  Higher Education for Business

  • Robert Aaron Gordon, James Edwin Howell(Authors)
  • 2019(Publication Date)
  • Columbia University Press

    (Publisher)

  chapter 3 THE AIMS OF B U S I N E S S E D U C A T I O N How DO business educators themselves evaluate their role in the scheme of American higher education? What needs do they attempt to serve, and how do they assess the educational requirements of the heterogeneous collection of occupations we call business? Public and private state-ments of educational objectives throw some light on these questions. Cur-rent practice is even more informative. For What Careers Are Business Students Being Prepared? The official statements of American business schools indicate a greater agreement about career objectives than does their practice. If we examine the official catalogues and bulletins, prepared largely for the benefit of prospective students, we find considerable repetition of a common theme. The objective is to prepare students for positions of responsibility in business, or for executive responsibility, or, even more broadly, for careers in business. Actually, these broad statements of career objectives hide a certain amount of diversity, both among schools and even within the same school. Broadly speaking, there are three types of career objectives which busi-ness schools have in mind in planning their educational programs. The first objective stresses preparation for a career in business without regard to the kind of business or job, except that it assumes that eventu-ally the future businessman will attain a position involving a significant amount of administrative responsibility. The stress here is on the fact that the student will become a manager or administrator, although what this means is often not very clear. The second objective also implies preparation for a lifetime career but puts the emphasis on imparting knowledge of subject matter in some particular area of business, such as accounting, marketing, production, or insurance. This objective is narrower than the first; it emphasizes the need for specialized knowledge more, and the broader types of knowledge

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  Engineering Economics and Economic Design for Process Engineers

  • Thane Brown(Author)
  • 2016(Publication Date)
  • CRC Press

    (Publisher)

  Business (general) management can best de fi ne a project’s business purpose, which takes the form of business objectives. However, business objectives are not suf fi cient to guide engineering work. The business objec-tives must be translated into technical objectives. Engineering management, working with the engineering leader and team, help and guide the translation. The “technical translation” becomes the statement of technical objectives. 7.4.1 B USINESS O BJECTIVES Business objectives will be quite different from project to project. For example, objectives for a new product introduction will be quite different from those for a project that is to reduce costs. The following are the topics business management should consider when developing their objectives. Defining Objectives 137 • What is the project to accomplish from a business standpoint? This is the ultimate intent of the project. It is the reason the project is to be funded and completed; all else fl ows from it. Some reasons to fund a project are: • Introduce a new product • Upgrade or improve an existing product • Increase capacity • Reduce costs • Comply with some new governmental regulation • Solve an existing problem — i.e., low reliability, environmental, safety, community relations • What are the schedule needs? These generally focus on the long-term business schedule. Timing of upstream work fl ows from the long-term schedule and is dealt with in the technical objectives.

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  The Pursuit of New Product Development

  The Business Development Process

  • Marc Annacchino(Author)
  • 2011(Publication Date)
  • Butterworth-Heinemann

    (Publisher)

  This section is one of the most important of the three sections because it is the goal that must be set for the organization. It defines the call to action, the point in the future that the organization wants to attain. The following are the basic elements of this section and represent the basic requirements for defining the organization’s goals. Theme or mission statement development: This is an often-overused term, and is frequently invoked by senior management as the only means of reinforcement of long-term plans. Simply stated, the theme statement is the short, concise description of the business of the company and its objectives. It describes the company’s identity and role in the marketplace. Narrative of the vision: Create a detailed narrative of the vision of what you want your com-pany to be in the future. It should discuss the time frame, expected results, financial posi-tion, market position, product position, and competitive comparison. It should also outline the ownership structure at that time, and whether any changes are expected. The Business Objective 21 Category Price level in marketplace Feature/benefit Customer base Technology base Cost Market driving forces Percent of total sales Contribution to profit Life cycle stage Product 1 Product 2 Product 3 Figure 1-12. Product line analysis. Narrative of how the plan and reality will fit together: Create another narrative that weaves together all of the requirements for the future dream and the present and future operational issues. This is done for the sole purpose of outlining the plausibility of the plan and goals, and to ensure that they are consistent and compatible. Five-year product line catalog: This is an interesting and enjoyable exercise because it allows management to sculpt the future offerings of the organization by outlining the five-year product and services catalog.

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