Business Objectives

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Business Objectives
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DO NOW

• Introducing the Topic page 56 Business Studies
  book, answer all questions.

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SMART objective

• What are your goals?
• What are your objectives?
• Are they SMART?
• Specific
• Measurable
• Achievable
• Realistic and Relevant
• Time Specific

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Activity

• Johnson Automotive is a newly formed business and
  are unsure about setting business objectives,
  they have come to you for some business advice.
  You are required to set a SMART objective for
  Johnson Automotive. (15mins)

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Hierarchy of objectives
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Aim

• Overall long-term goals which a business hopes to
  achieve.
• The starting point for the entire set of
  objectives on which effective management is based
• They can develop a sense of purpose and direction
• They allow an assessment to be made
• They provide a framework

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Mission Statement

• A statement of the businesss core aims, phrased
  in a way to motivate employees and to stimulate
  interest by outside groups
• Kings College Mission Statement
• We aim to provide excellence in teaching and
  learning within a well-balanced educational
  context involving the academic, cultural, social,
  physical, emotional and spiritual dimensions of
  life

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Mission Statement - Activity

• You are required to write a mission statement for
  this year, make sure that its the same sort of
  structure as a Businesses Mission Statement. (15
  mins)

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Homework

• Activity 4.1 page 60 Business Studies Text Book
  1-3
• Blog Duty Student to discuss today's lesson,
  others to check and comment

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DO NOW

• Homework out for inspection what is your Mission
  Statement?.

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Mission Statements

• It is the Mission of Advance Auto Parts to
  provide personal vehicle owners and enthusiasts
  with the vehicle related products and knowledge
  that fulfill their wants and needs at the right
  price. Our friendly, knowledgeable and
  professional staff will help inspire, educate and
  problem-solve for our customers
• Guided by relentless focus on our five
  imperatives, we will constantly strive to
  implement the critical initiatives required to
  achieve our vision. In doing this, we will
  deliver operational excellence in every corner of
  the Company and meet or exceed our commitments to
  the many constituencies we serve. All of our
  long-term strategies and short-term actions will
  be molded by a set of core values that are shared
  by each and every associate

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Business Objectives Video

• Do you agree with him?
• What other objectives should we have?

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Corporate Objectives

• Specific targets based upon the aim and mission
• Profit Maximization the greatest difference
  between cost and revenue. (seems the most
  rational objective)
• Issues
• more competitors enter market.
• To increase market share you often have to
  sacrifice profit.
• Environmental and Employee concerns often impact
  on decisions leading to less profit.

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Corporate Objectives

• Profit Satisficing Earning enough profit to
  keep the owners happy and to give them a
  comfortable life. (common in small businesses.
• Growth the business expands and makes more
  money, resulting in economies of scale and
  increased benefits for employees.

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Corporate Objectives

• Increasing Market Share being the leader in
  your market the consumers choice ie Coke.
• Survival Very common in the early years of
  business.

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Corporate Objectives

• Corporate Social Responsibility Businesses who
  consider the issues of society to be important.
  Most businesses now have sustainability
  procedures and work within the community as it is
  good for there image, and future sales. Ie
  Cadbury chocolate is now fair trade.

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Corporate Objectives

• Maximizing Short term sales revenue not common
  as often you have to reduce prices to make more
  sales or increase advertising which eats away at
  your profit margin.
• Maximizing Shareholder Revenue

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Reuters Achieving its Aims

• Activity 4.2 page 62 all questions

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END OF UNIT TEST

• AS BUSINESS
• FRIDAY 11th March 2011 (This Friday)
• Topics Enterprise, Structure, Size and
  Objectives
• 5 Short Answer Questions
• 28 Marks (one 8 mark question)

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Conflicts between Corporate objectives

• Growth VS Profit profit can be sacrificed to
  increase sales.
• Short Term vs Long term buying new machinery or
  developing new products will result in a short
  term loss for a long term gain.
• Stakeholder Conflicts.

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Changes to objectives

• Economy might change (recession) resulting in a
  change of objectives.
• New business moving out of survival mode.

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Homework

• Study for Mid unit Test tomorrow

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DO NOW

• list three common corporate objectives.

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Factors that determine objectives

• Corporate culture A code of behavior and
  attitudes that influence the decision making of
  managers.
• The size and Legal form of a business A small
  business may be concerned with making enough
  profit to be comfortable where as a large
  organization may want increased market share.

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Factors that determine objectives

• The Number of years the business has been
  operating Survival vs Making Profit

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Hierarchy of objectives
To maximise shareholder value
To increase profits of all divisions by 10 per
year
Within one region, to increase market share by
10 and cut overheads by 5
E.g. Marketing increase profit margins by 7
E.g. in marketing department - Increase sales by
an average of 5 per client - Introduce 5 more
clients to the business each year
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Business Ethics - Video
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Who Should survive Activity

• Business Ethics
• Why did you make the decision you did?

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Business Ethics

• The moral guidelines that determine decisions
  made.
• Ie Sweat shops in China
• Bribes for buying off a supplier
• Gifts in exchange what is crossing the line?
• Palm Oil the Cadbury saga

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Business Ethics

• Being ethical can add to business costs, ie fair
  trade chocolate
• Loss of sales if bribes are not taken
• Being ethical often means more trust from
  customers and therefore greater loyalty.
• You will get publicity for acting ethically.

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Homework

• Case Study page 69 questions 1-3 Business Studies
  Text Book