MANAGEMENT AND ORGANIZATIONS

ORGANIZATIONAL OBJECTIVES
The core role of management is decision making.
There are four (4) key questions that management MUST ask in the decision-making process:
1. Where are we now?
2. Where do we want to be? (we are going to focus on this)
3. How do we get there?
4. How do we know we are better?
Where do we want to be answers this: The aims and objectives of business organization.

What are organizational objectives?

Organizational objectives are the end results an organization seeks to obtain in order to achieve its mission. The
objectives or end results become the focus of the organization's activities. Strategies are formulated and implement to
assure the activities of the organization are coordinated to achieve it objectives. The word "goals" is often used
interchangeably with objectives. Some of the areas in which organizations set objectives include profitability,
management performance, competitive performance, productivity, and social responsibility.
How do organizational objectives guide a business? They give the business a sense of direction.

Organizational objectives have three (3) functions:

 To control a firm’s plan (set up targets within a department).
 To motivate or inspire people to reach a common goal.
 To direct; to provide an agreed and clear focus for everyone in the organization.

Importance of clear objectives:

• To control and set business boundaries
• Enhances motivational level of employee
• Provides direction and focus for organization and individuals
• Gives business a sense of direction
• Acts as a base for decision making
• Encourages strategic thinking for business
• Foundation for measuring performance

Why is target setting vital in all businesses?

 If you do not do this you will have no clear sense of direction.
 No clear purpose.

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Aims and objectives are set for many important reasons:
 Give a business a sense of direction, purpose and unity.
 Forms the foundation for business decision-making.
 Encourages strategic thinking (planning for long term).
 Provides a basis for measuring and controlling the performance of the workforce, the management,
and the entire business.

Types of organizational objectives

e.g. To be the leading sports brand in the world

Vision

e.g. To make products that outperform competitors

Mission

e.g. To make athletic shoes that outperform competitors

Aims

e.g. Gain 40% market share in athletic shoes

Strategic objectives

e.g. Introduce three new athletic shoe products

Tactical (Operational) Objectives

Business objectives at different levels

Corporate objectives:
These deal the with whole organization.
May include: Goals, profit maximization, growth, over all survival.
Departmental objectives
Are very specific objectives; departmental targets
Individual objectives
Targets set for you or by you.
Are often used in performance appraisal
Examples: Sales targets; if you are a salesperson.

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Objectives:
Are the short term goals of an organization.
They are based on the company’s aims.
They are quantifiable (measurable)

Aims:
Are the long term goals of an organization.
They give a purpose to the direction of the company.
Usually unquantifiable
Serve to give a purpose to the general direction of an organization
Are often expressed in the mission statement.

Remember:
The main difference between the two is the time scale.
Aims are vague, objectives are more specific.

Vision
This is the management’s expectation or dream for the organization in future if the organization was to be run or
managed in the most effective and efficient way. It outlines what management of the organization would like to
achieve if the firm were to operate in the best condition using the best capability.
A vision statement:
A vision statement is a formally written statement outlining the management dreams or expectation that an
organization would realize were it to operate at its best performance.
The statement is usually written and placed in the front office or in the director/chairman’s office
Outlines a business’s aspirations (where it wants to be).
They relate to the attainment of success
“ I have a dream…”
“To be the leading sports brand in the world”
It is an image of an ideal situation in the future.
The key issues outlined include:
 Outlines management’s aspiration for the future
 Panoramic view of business
 Ideal future for the organization
 Clarifies direction in which origination needs to move
 Gives surety to the organization about business position that they are trying to stake out
 Encourages shared values among the people in the organization

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 The power of a vision
1. It is the most powerful positive motivator for change
2. Is a source of positive empowerment to the employees that help the organization achieve its objectives by
promoting shared values, empowering employees to exploit opportunities and their potential in the organization.
3. Give direction to the organization therefore encouraging employees to act in a certain way
4. Can completely transform an organization to cope up with the competitive environment
5. Encourage certain values relevant in an organization such as unity, cooperation, team work, quality and
customer satisfaction

Mission
A mission is an outline of the main purpose or reason why an organization or any part of it exists to achieve in the
society. Missions try to give the organization an identity.
A mission statement:
This is a formally written document or statement outlining the main reason of an organization or part of it has been
set up to achieve in a given society. The document is usually written on a variety of publicity material e.g. front
office space, the chairman’s/director’s office space, packaging material, websites, brochures etc.
Explains what the business is trying to achieve.
Outlines the organizations values.
It is a simple declaration that states the purpose of an organization’s existence.
It will outline how a vision statement will be achieved.
These statements do not have a time frame.
They should be clearly defined and realistically achievable.
It will serve to unify all people and corporate culture in an attempt to achieve the organization’s vision.
As a manager you will need to ensure that decisions are consistent with the mission statement.

Content and information in a good mission statement

1. Name and nature of the organization
2. Type of business including scope of activities the organization engages in
3. Target market or clients
4. The employees and type of goals for employees
5. Overall objectives of the firm
6. Strategy or approach the firm is using to achieve its objectives
7. The relationship between the organization and other stakeholders

Qualities of a good mission statement

 Brevity, specific and non ambiguous in nature.

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The size of the statement should range between 5 – 6 typed lines in an A4 space
 Distinctive
It should be written in such a way that its capable of differentiating one organization from another even if they have
the same type of business operation
 Dynamic
Must be capable of being changed/adopted over a period of time
 Comprehensive
It must contain all essential information outlined in the content information

Significance of mission statements

These have two significance
 Strategic tool
 Cultural glue
As a strategic tool
1. Provides the overall guide for strategic overall planning
2. Enables identification of stakeholders
3. Denotes the target market and the strategies to be used to achieve competitive advantage
4. Gives wider organizational principles and regulations that help achieve support from the society
As a cultural glue
1. Guides behavior in organizational staff
2. Forms basis of screening, recruiting and employing staff
3. Forms basis for rewarding or punishing certain behaviors
4. Unite members of an organization to achieve certain goals

Differences between vision and mission statements

vision statement mission statement
Focused on long term. Focused on medium to short term.
Not updated frequently. Are updated frequently.
No actual targets. (what could be) Have actual targets. (what will be)
Highlights the values of the business

Short term v/s long term objectives

What does strategy mean?
Strategy – technique or method or course of action or means or way s that can be used to achieve strategic objectives.
Strategies are plans or schemes to achieve the long-term aims of a business
A plan or scheme to achieve what? Long term aims of a business.

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It is used to achieve strategic objectives.

What does tactics mean?

Tactics are short-term ways that firms use to achieve their aims and objectives
The short-term ways that firms use to achieve their aims and objectives.
Both strategy and tactics will answer the question… How do we get to where we want to be?

What might be the several levels of strategy that a business can adopt?
Operational strategies:
The day-to-day methods used to improve the efficiency of a business.
Generic strategies:
Those that affect the business as a whole
Such as differentiation
Corporate Strategies:
Aimed at the long-term objectives of a business.
Aiming for market dominance – seek ways in doing so.
Mergers, takeovers of rivals etc.

Tactical objectives
So what are tactical/operational/secondary objectives?
Are short-term objectives that affect a segment of the organization.
For example, a sales department will set its own objectives.
The main tactical objective for many businesses is survival.
A second tactical objective might be sales revenue maximization.
Maximize their sales.

Strategic objectives
What are strategic/primary objectives?
Are long-term aims of a business organization.
Targets for the next couple of years.
Example: 1. Profit maximization: Making as much profit as possible.
2. Growth: Measured by an increase in sales or by market share
Benefits of growth include:
• Economies of scale, lower average cost of production.
• Market power, more monopoly, charge higher prices.
• Reduced risks, diversification; helps reduce risk.
3. Image and Reputation

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 • Having a bad image may turn customers away.
• Must also consider the NEEDS of the customer.
• Having a good reputation, people will want to do business with you.
4. Market standing
Refers to the extent which a firm has presence in the marketplace.
• Microsoft has high market standing for being number one in the computer software industry.

Ethical objectives
What are ethical objectives?
They are the moral principles that guide decision-making strategy.
Morals are concerned with what is right and wrong, from a society’s point of view.
Ethical behavior is very subjective.
What is right or wrong? Depends on the individual.
Laws have been put in place to correct this.
 Anti-discrimination laws.
 Health and Safety at Work Laws.

Examples of ethical objectives:

 Reducing pollution
 Increase recycling
 Friendly waste disposal
 Treating employees well.
 Fairer trade conditions.
Pressure from within or outside the business to act ethically may occur.

Some examples of Unethical business behavior:

 Financial dishonesty
 Environmental neglect
 Exploitation of workers
 Exploitation of suppliers
 Exploitation of customers

How to achieve ethical objectives

A number of businesses have to adopt an ethical code of practice.
This should be published in the mission statement or annual report.
What is this ethical code of practice?

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 Documented beliefs and philosophies
Guidelines and expectations on employee behavior.

Advantages of have ethical code of practice

 Improved corporate image.
 Increased customer loyalty.
 Cost cutting.
 Improved staff motivation.
 Improved staff morale.
 Providing accurate information and labeling.
 Active community work.
 Having consideration for the environment.
 Adhering to fair employment practices.

Disadvantages of have ethical code of practice

 Compliance costs.
 Lower profits.
 Stakeholder conflicts.

Characteristics of objectives
• S- specific i.e. Clear and easy to understand
• M- measurable
• A- achievable
• R- realistic
• T- time bound

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