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  • IB Economics
    • 01 Microeconomics >
      • 1. The Foundations of Economics
      • 1.1 Demand and Supply
      • 1.2 Elasticities
      • 1.3 Government Intervention
      • 1.4 Market Failure
    • 02 Macroeconomics >
      • 01 Level of Economic Activity
      • 2.2 Aggregate Demand
      • 2.3 Aggregate Supply
      • 2.4 Macroeconomic Equlibruim
      • 2.5 Unemployment
      • 2.6 Inflation
      • 2.7 Economic Growth
      • 2.8 Equity in the distribution of income
    • 03 The Global Economy >
      • 3.1 Free Trade
      • 3.2 Protectionism
      • 3.3 Exchange Rates
      • 3.4 Balance of Payments
      • 3.5 Economic Integration
      • 3.6 Economic Development
      • 3.7 Measuring Development
      • 3.8 Barriers to economic growth and/or development
    • 04 Exam Preparation
  • Individuals & Societies 7
    • 01 Economic Growth and Development
    • 02 Where are all the people?
    • 03 Why do empires fall?
    • 04 How has globalization shaped the world?
  • Individuals & Societies 8
    • 01 Belief systems and their influence on culture
    • 02 How are societies governed?
    • 03 Japan 1603 - 1945: Isolation and then expansion
    • 04 What are natural hazards and how do societies respond to them? Case Study: Japan
  • Individuals & Societies 10
    • 01 Does industrialization improve well-being?
    • 02 The Psychology of Motivation
  • IB Business Management
    • 01 Business Organization and the Environment >
      • 1.1 Introduction to Business Management
      • 1.2 Types of business organizations
      • 1.3 Organizational objectives
      • 1.4 Stakeholders
      • 1.5 External Environment
      • 1.6 Growth and Evolution
      • 1.7 Organizational planning tools
    • 02 Human Resources >
      • 2.1 Human Resource Planning
      • 2.2 Organizational Structure
      • 2.3 Leadership and Management
      • 2.4 Motivation
      • 2.5 Organizational and corporate cultures
      • 2.6 Employer and employee relations
    • 03 Finance and Accounting >
      • 3.1 Sources of finance
      • 3.2 Costs and revenues
      • 3.3 Break-even analysis
      • 3.4 Financial Accounts
      • 3.5 & 3.6 Ratio Analysis
      • 3.7 Cash flow
      • 3.8 Investment appraisal
      • 3.9 Budgets
    • 04 Marketing >
      • 4.1 The Role Marketing
      • 4.2 Marketing Planning
      • 4.3 Sales Forcasting
      • 4.4 Market Research
      • 4.5 Product >
        • 4.5 Price
        • 4.5 Promotion
        • 4.5 Place
      • 4.7 International Marketing and Globalization
    • The Exam
  • AP World History
    • Free Response Questions
    • 10,000 BCE - 600CE
    • 600 - 1450
    • 1450 - 1750
  • AP Human Geo
    • 01 Geography its nature and perspectives
    • 02 Population and Migration
    • 03 Cultural Geography
    • 04 Political Geography
    • 05 Urban Geography
    • 06 Economic Geography
    • 07 Agricultural Geography
    • Exam Review
  • Previously Taught Courses
    • G12 Economics >
      • Basic Economic Ideas
      • Producing and Consuming
      • Financial Capability
      • Managing the Economy
    • G10 World History >
      • 01 Exploration, Scientific Revolution and the Enlightenment
      • 02 The American Revolution
      • 03 France: Absolute Monarchy & Revolution
      • 04 The Industrial Revolution
      • 05 Imperialism and Nationalism
      • 06 WW1
      • 07 Inter-War Period
      • 08 WW2
    • G9 World History >
      • 01 Human beginnings and early civilizations >
        • 03 What can we learn from Classical Civilizations (Greece) >
          • 03 What can we learn from Classical Civilizations?
      • 03 Classical China
      • 04 The Muslim World
      • 05 Interregional Networks and Contacts 500 - 1450
      • 01 The Individuals and Societies Toolbox
      • 06 The Renaissance and Reformation >
        • Oral Presentations
    • G9 Social Studies >
      • History >
        • Analyzing Sources
      • Geography
    • G7 Social Studies >
      • Introduction to Empowerment
      • Economic Empowerment
      • Political Empowerment
      • Cultural Empowerment
      • National Empowerment
      • 04 Resources and the environment
      • Finance and Accounting >
        • 3.1 Sources of finance
        • 3.2 Investment appraisal
        • 3.3 Working capital
        • 3.4 Budgeting
        • 3.5 Financial Accounts
        • 3.6 Ratio Analysis
    • Writing Skills
    • Critical Reading
  • Extended Essay
    • 01 Getting Started
    • 02 Structuring the EE

1.3 Organizational objectives

What we will study?

Picture
By the end of this unit you should be able to:
  • Explain the importance of setting objectives in managing an organisation
  • Explain the purpose of mission statements and vision statements
  • Distinguish between aims, objectives, strategies and tactics and discuss how these interrelate
  • Examine the reasons why organisations set ethical objectives and implement corporate social responsibility strategies
  • Discuss why a firm's view of its social responsibilities and strategies towards them may change over time
  • Prepare a SWOT analysis for a business situation
  • Analyse an organisation's position using a SWOT analysis
  • Evaluate the need for firms to change their objectives over time
  • Explain and apply the Ansoff Matrix as a decision-making tool

The importance of objectives

When a business first starts trading it has few loyal customers and no reputation. The most likely objective for a start up business is simply survival. As the business grows and begins to win market share, the aim may shift towards expansion and/or increasing profits.

Some owners have a vague idea about their objectives. The best types of objective are SMART. Smart stands for:
  • Specific: clearly state what is to be achieved, eg increased profits.
  • Measurable: the desired outcome is a number value that can be measured, eg increase profits by 10%.
  • Agreed: all staff are involved in discussing and agreeing an aim.
  • Realistic / Relevant: the target is possible given the market conditions and the staff and financial resources available and relevant to the company
  • Timed: the target will be met within a given period of time, eg 12 months.
An example of a SMART objective is 'to increase profits by 10% within the next 12 months'. SMART objectives allow the performance of a business to be assessed.

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THE RELATIONSHIP BETWEEN AIMS, OBJECTIVES, STRATEGIES AND TACTICS 
Aims: The long-term goals of an organization, often expressed in the organization's mission statement. They are a general statement of an 
purpose and intention and tend to be qualitative in nature. Aims are set by the senior directors and management of an organization.
"Our aim is to maximize shareholder value"

Objectives are the relatively short-term targets of an organization. They are expressed as SMART objectives.
"Our objective is to increase the profitability of all divisions by 10 per cent in the 2015/2016 financial year"

Targets are the short-term plan of action that organization's use to achieve their objectives.
"Our target is to increase our market share by 10 per cent and decrease overheads by 5 per cent in the 2015/2016 financial year"

Tactics are the short-term activities that organizations use to achieve their targets.
"We will do this by cutting costs by changing suppliers"

Why do businesses need ethical objectives?

Business ethics vs. Corporate social responsibility 

Business Ethics is the VERY broad field of study concerning good ethical decision-making in commercial contexts. CSR is more narrowly about a company’s SOCIAL obligations…that is, a company’s obligations to society in general. So, business ethics is concerned with not just social obligations, but also obligations to employees, customers, suppliers and competitors. CSR is about the extent to which companies owe something to “society at large” (i.e., those who do not have a direct involvement with the business).

SWOT analysis

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  • Home
  • IB Economics
    • 01 Microeconomics >
      • 1. The Foundations of Economics
      • 1.1 Demand and Supply
      • 1.2 Elasticities
      • 1.3 Government Intervention
      • 1.4 Market Failure
    • 02 Macroeconomics >
      • 01 Level of Economic Activity
      • 2.2 Aggregate Demand
      • 2.3 Aggregate Supply
      • 2.4 Macroeconomic Equlibruim
      • 2.5 Unemployment
      • 2.6 Inflation
      • 2.7 Economic Growth
      • 2.8 Equity in the distribution of income
    • 03 The Global Economy >
      • 3.1 Free Trade
      • 3.2 Protectionism
      • 3.3 Exchange Rates
      • 3.4 Balance of Payments
      • 3.5 Economic Integration
      • 3.6 Economic Development
      • 3.7 Measuring Development
      • 3.8 Barriers to economic growth and/or development
    • 04 Exam Preparation
  • Individuals & Societies 7
    • 01 Economic Growth and Development
    • 02 Where are all the people?
    • 03 Why do empires fall?
    • 04 How has globalization shaped the world?
  • Individuals & Societies 8
    • 01 Belief systems and their influence on culture
    • 02 How are societies governed?
    • 03 Japan 1603 - 1945: Isolation and then expansion
    • 04 What are natural hazards and how do societies respond to them? Case Study: Japan
  • Individuals & Societies 10
    • 01 Does industrialization improve well-being?
    • 02 The Psychology of Motivation
  • IB Business Management
    • 01 Business Organization and the Environment >
      • 1.1 Introduction to Business Management
      • 1.2 Types of business organizations
      • 1.3 Organizational objectives
      • 1.4 Stakeholders
      • 1.5 External Environment
      • 1.6 Growth and Evolution
      • 1.7 Organizational planning tools
    • 02 Human Resources >
      • 2.1 Human Resource Planning
      • 2.2 Organizational Structure
      • 2.3 Leadership and Management
      • 2.4 Motivation
      • 2.5 Organizational and corporate cultures
      • 2.6 Employer and employee relations
    • 03 Finance and Accounting >
      • 3.1 Sources of finance
      • 3.2 Costs and revenues
      • 3.3 Break-even analysis
      • 3.4 Financial Accounts
      • 3.5 & 3.6 Ratio Analysis
      • 3.7 Cash flow
      • 3.8 Investment appraisal
      • 3.9 Budgets
    • 04 Marketing >
      • 4.1 The Role Marketing
      • 4.2 Marketing Planning
      • 4.3 Sales Forcasting
      • 4.4 Market Research
      • 4.5 Product >
        • 4.5 Price
        • 4.5 Promotion
        • 4.5 Place
      • 4.7 International Marketing and Globalization
    • The Exam
  • AP World History
    • Free Response Questions
    • 10,000 BCE - 600CE
    • 600 - 1450
    • 1450 - 1750
  • AP Human Geo
    • 01 Geography its nature and perspectives
    • 02 Population and Migration
    • 03 Cultural Geography
    • 04 Political Geography
    • 05 Urban Geography
    • 06 Economic Geography
    • 07 Agricultural Geography
    • Exam Review
  • Previously Taught Courses
    • G12 Economics >
      • Basic Economic Ideas
      • Producing and Consuming
      • Financial Capability
      • Managing the Economy
    • G10 World History >
      • 01 Exploration, Scientific Revolution and the Enlightenment
      • 02 The American Revolution
      • 03 France: Absolute Monarchy & Revolution
      • 04 The Industrial Revolution
      • 05 Imperialism and Nationalism
      • 06 WW1
      • 07 Inter-War Period
      • 08 WW2
    • G9 World History >
      • 01 Human beginnings and early civilizations >
        • 03 What can we learn from Classical Civilizations (Greece) >
          • 03 What can we learn from Classical Civilizations?
      • 03 Classical China
      • 04 The Muslim World
      • 05 Interregional Networks and Contacts 500 - 1450
      • 01 The Individuals and Societies Toolbox
      • 06 The Renaissance and Reformation >
        • Oral Presentations
    • G9 Social Studies >
      • History >
        • Analyzing Sources
      • Geography
    • G7 Social Studies >
      • Introduction to Empowerment
      • Economic Empowerment
      • Political Empowerment
      • Cultural Empowerment
      • National Empowerment
      • 04 Resources and the environment
      • Finance and Accounting >
        • 3.1 Sources of finance
        • 3.2 Investment appraisal
        • 3.3 Working capital
        • 3.4 Budgeting
        • 3.5 Financial Accounts
        • 3.6 Ratio Analysis
    • Writing Skills
    • Critical Reading
  • Extended Essay
    • 01 Getting Started
    • 02 Structuring the EE