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1.3. Organizational Objectives. Summary

  • Vision statement and mission statement
    • Vision
      • Describes a desired position for the company in the far future (“Where do we want to be?”)
      Mission
      • Purpose of business, states what the business is and does how the vision statement will be achieved (“How do we get there?”)
    • Vision and mission statement
      • Positive, ideal goals parallel to business customer-centric
      • Answers:
        • Where are we now? Where do we want to be? How do we get there?
        • How do we know we are there?
  • Aims, objectives, strategies, and tactics
    • Aims – long term goals of what the company wants to be objectives – shorter term goals that are specific and measurable individual targets, departmental objectives, divisional objectives, corporate objectives, mission, aim (pyramid, base to height is left to right)Guides and unifies management and workforceBasis for strategic planning
    • Builds trust and goodwill
  • Changing objectives and innovations (due to changes in the environment)
    • Companies change objectives when responding to internal and external changes context of the
      • company must consider
      internal factors
      • Corporate culture – the way the organization works (aggressive, chill, etc.)Type and size of organization – small or big businesses run differently age of organization – change must be consistent with timesFinancial status – profit goals, how much money the business has to use risk profile of shareholders – If investors are risk-averse or risk-loving private/Public sector
        • Private = profitPublic = serve
    • External
      • State of the economy – a
      strong or depressed economy affects the company to government constraints – the government telling you not to expand somewhere
      • Presence and power of pressure groups – (e.g. not to expand in the endangered locations)
  • Corporate social responsibility (CSR)
    • A concept whereby organizations consider the interests of society by taking responsibility for the impact of their activities on various stakeholders Benefits:
      • Better employee recruitment and retention
        • Sense of value/purpose for employees
        Boosts company’s image/reputation Risk management against scandals, accidents, etc.
        • Appeases pressure groups
        Brand differentiation and smoother operationsCustomer loyalty & goodwill
      Disincentives:
      • High compliance costs can lower profits forced to use materials that are specialized and may reduce profitEthics are not universal or unchanging anyway lower profits may decrease personal bonuses which may lead to greediness
      Attitudes change over time; acceptable practices before are unacceptable today.
    • CSR objectives adapt to changes in social norms/hot issues (i.e. tattoos, dyed hair, jeans, single parents, gender bias, child labor, smoking, obesity, global warming, etc.)
  • SWOT analysis
    • Qualitative form of assessment guides management for future strategies used alongside STEEPLE, which helps to further identify opportunities and threats Internal factors
      • Strengths – advantages that are the basis for developing competitive advantage.
        • e.g. experienced management, patents, loyal workforce/customers
        Weakness – negative factors
        • e.g. poorly trained workforce, limited capacity, obsolete equipment, etc.
    • External factors
      • Opportunities – potential areas for expansion of the business and future profits
        • e.g., political/economic policies, social statistics & trends, etc.
      • Threats – hindrances to the business
        • e.g., economic environment, market condition, competitors.
  • Ansoff Matrix
    • Analytic tool to determine growth strategy by focusing on product/market combination Growth strategies
    • Existing product + existing market = Market Penetration (low risk)
      • Seeks to maintain or increase market share
        • Price adjustmentsIncrease of market promotionMinor product improvementsIntense competition
        New product + existing market = Product Development (medium risk)
        • Innovation to replace existing products Focusing on consumer needs Brand extensionCapitalize on technology Consumers in existing market may not like the new product
        Existing product + new market = Market Development (medium risk)
        • New distribution channelExpanding geographicallyAttract new market segments New consumers may not like the product
      • New product + new market = Diversification (high risk)
        • If successful, higher gains can be reaped from various industries Spreads out risks and safeguards against economic shocks over diverse product portfolio related diversification (same industry – e.g. McDonald’s and McCafe)
        • Unrelated diversification (different industries – e.g. Zesto and Zest Air)

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