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1.3. Organizational Objectives

  • 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 workforce
      • Basis for strategic planning
      • Builds trust and goodwill
  • Changing objectives and innovations (due to changes in environment)
      • Companies change objectives when responding to internal and external changes
      • Context of company must be considered
      • Internal factors
        • Corporate culture – 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 times
        • Financial 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 = profit
          • Public = serve
      • External
        • State of economy – strong or depressed economy affects the company too
        • Government constraints – 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)
      • 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 operations
        • Customer loyalty & goodwill
      • Disincentives:
        • High compliance costs can lower profits
        • Forced to use materials that are specialized and may reduce profit
        • Ethics 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 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/economical 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 adjustments
        • Increase of market promotion
        • Minor product improvements
        • Intense competition
      • New product + existing market = Product Development (medium risk)
        • Innovation to replace existing products
        • Focusing on consumer needs
        • Brand extension
        • Capitalize on technology
        • Consumers in existing market may not like the new product
      • Existing product + new market = Market Development (medium risk)
        • New distribution channel
        • Expanding geographically
        • Attract 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. McDonalds and McCafe)
        • Unrelated diversification (different industry – e.g. Zesto and Zest Air)