Using Objectives and Strategies

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  • Using Objectives and Strategies
    • Business Objectives
      • Corporate Objectives
        • The goals or targets of the whole organisation
          • Usually based on its mission or aims
        • Designed to enable a business to achieve its aims
        • Set in order to coordinate business activity
          • Give a sense of direction to the business as a whole
        • They govern the setting of fuctional objectives
          • Thus provide a mechanism for ensuring that authority can be delegated without loss of coordination
      • Objectives
        • Goals or targets that must be achieved in order to realize the stated aims of an organisation
        • Tend to be medium to long term
      • Functional Objectives
        • The goals or targets of each functional areas of a business
          • Usually based on its corporate objectves
        • Are set for each division of a business
          • Are designed to ensure that the business achieves its corporate objectives
            • And thus achieves its overall aims
        • Are set in order to coordinate the activities of the department
      • Relationship between Corporate and Functional Objectives
        • Survival
          • Minimum level of sales and sales revenue
          • Appropriate levels of stock
          • Well trained and experienced staff
        • Profit Maximisation
          • Effective marketing
            • Increase sales
          • Improving profit margins
            • Minimizing costs
          • Reducing staff turnover
        • Growth Maximisation
          • Increasing market share
          • Retaining profit
            • Finance growth
          • Increase capacity
            • Expanding the number of sites
          • Recruiting staff
        • Diversification
          • Development of niche markets
          • Raising additional finanace
            • Via appropriate cost effective sources
      • SMART Objectives
        • Specific
          • Clearly and easily defined
        • Measurable
          • Quantifiable
        • Agreed
          • Managers and subordinates are involved in setting targets
        • Realistic
          • Achievable and not in conflict with other objectives
        • Time Bound
          • Based on an explicit timescale
    • Business Strategies
      • Strategy
        • Medium to long term plan
        • Organisation aims to attain its objectives
        • Should not be considered until the company's corporate and functional objectives have been agreed
      • Relationship between Functional Objectives and Strategies
        • Marketing Division
          • Gain market share
            • Contribute to increasing the rate of growth
          • Lower price
        • Finance Division
          • Minimise Costs
            • Maximize Profits
          • Introducing zero budgeting
        • Operations Division
          • Improve economies of scale
          • Centralised buying in bulk
        • HR Division
          • Improve labour turnover
          • Improve motivational techniques

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