Business Objectives

Note taking for the Objectives and Strategy Topic

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  • Created by: Emma Rudd
  • Created on: 19-06-08 15:25
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Emma Rudd BMA
Objectives and Strategy ­ Business Objectives
Mission Statements
A mission statement sets out what a firm is trying to achieve i.e. the reason why it exists.
For example, a firm may set out `to be the lowest cost producer in the industry' or to
`maximise the returns for our shareholders'. The mission may include a statement of
what the firm believes it is, what it values, which markets it wants to compete in and how
it intends to compete. By setting out a mission everyone within the firm knows what they
should ultimately be trying to do. All of their actions should be directed towards the
same thing. This should make decision making easier: when faced with a series of options
managers can compare them in relation to the overall objective of the business. Mission
statements can also motivate people ­ they know exactly why they are there and what
the business is trying to achieve and this can give them a sense of belonging and
direction.
However, some mission statements are so unrealistic, or clearly just public relations
exercises, that employees pay little attention to them. In other organisations managers
clearly ignore the mission statement and so other employees lose faith in it as well.
Imagine that the mission of your organisation was supposed to be `to delight all of our
customers', but every time you has an idea to improve customer service it was ruled out
on the grounds of cost; you would soon realise that what the manager said they wanted
to do was not the same as what they actually want to do. A mission statement will only
have value therefore if the behaviour of everyone within the firm supports it. In these
circumstances it can be a powerful was of uniting people and developing a corporate
spirit.
Once a firm has established its mission it can set objectives. The objectives turn the
mission statement into something, which is more quantifiable. Rather than simply being a
statement of intent an objective sets out clearly what has to be achieved. To be
effective objectives should be SMART;
Specific ­ they must define exactly what the firm is measuring such as sales or
profits
Measurable ­ they must include quantifiable targets.
Agreed ­ if targets are simply imposed on people they are likely to resent them;
if however, the targets are discussed and mutually agreed people are more likely
to be committed to them.
Realistic ­ is objectives are unrealistic (e.g. they are too ambitious) people may
not even bother to try and achieve them. To motivate people the targets must be
seen as attainable.
Time specific ­ Employees need to know how long they have to achieve these
targets ­ e.g. 2 or 3 years?
The nature of the mission statement and the firm's objectives will be influenced by the
organisations culture.
Organisation or Corporate Culture
The culture of an organisation consists of the values, attitudes and beliefs of the people
who work within it. Every organisation has its own unique culture and this has a big
effect on its success. In some firms emphasis is on getting the job done ­ it does not
matter what you do (providing its legal) as long as you get results. If you upset people
along the way so be it. In other organisations the emphasis is much more on working as a
team and keeping up good relations with others; it is felt that it is not worth doing some
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Emma Rudd BMA
things if you upset others as a result. In some firms new ideas are welcomed; the
managers encourage you to try things out even if you fail occasionally. In other
organisations you are expected to do what you are told and no more; if you start to
question this you are seen as a troublemaker.
All of these differences are due to the organisational culture i.e. it depends on what
managers within the firm regard as important.…read more

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Emma Rudd BMA
Culture change will also require some form of education or training programme to explain
to people why it is being done and what the benefits are. People may also need reassuring
that they will be able to adjust to the new approach and that they will be able to
prosper under the new system.
Entrepreneurial Culture
The concept of culture applies as much to countries as it does organisations.…read more

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