1.2 the o rganisation 1.2.1: business objectives and their importance
DESCRIPTION
1.2 The O rganisation 1.2.1: Business objectives and their importance . UNIT 1.1. 1.2 The Organisation. Aims. An aim is a goal or target. A business may have more than one aim. Aims should always be appropriate to the business activity and size of the business. Example of aims. - PowerPoint PPT PresentationTRANSCRIPT
1.2 The Organisation
1.2.1: Business objectives and their importance
UNIT 1.1
Target Learning Objective Outcome Who? Keywords
Demonstrate an understanding that businesses can have several objectives – and the importance of these can change
• Understand the need for objectives in business
• Identify the importance of businesses having objectives
ALL
C
• Aims
• Mission statement
• Objectives
• Profit maximisation
Demonstrate understanding of different objectives such as growth, profitability and market share Aims of private and public sector enterprises
MOST
B
SOME
A
1.2 The Organisation
Aims
• An aim is a goal or target.• A business may have more than
one aim.• Aims should always be appropriate
to the business activity and size of the business.
Example of aims
• The main aim of the Australian football team in 2013 was to win the World Cup.
• This aim would not have been appropriate for a local club.
Example of aims
• A school or college may aim to improve its examination results (this links to the core activity)
• A supermarket may aim to increase its profits.• Microsoft wanted to gain a share of the
computer games market with its Xbox. This aim would not have been appropriate for a small, local computer company.
Types of business aims
• A business aim does not always have to be to make profit
Types of business aims: Private sector
• To survive as a business or expand• To make a profit• Growth• Increase market share• Image, reputation and social
responsibility
Aims: Public Sector
• Proving health care• Providing education• Providing community activities
p
• Aims and objectives give organisations a direction to work towards
• Private sector organisations seek to make a profit, usually the main focus for their aims and objectives.
• Public sector organisations may seek to make a profit but will focus on public service.
Mission Statement
• The overall reason for a business’ existence is known as its corporate aim or mission.
• Eg. A business could set out to be ‘the lowest cost producer in Europe's or ‘the worlds favourite car hire firm’.
• A mission statement is meant to inspire and define the underlying purpose of the organisation
• -general purpose and aims of the business
‘To boldly go where no man has gone before’-Star Trek
From Mission Statement to Objectives
• A mission statement may be motivating but it lacks the specific information needed for planning.-What does ‘best industry mean’? Or ‘Most
profitable’?• To plan properly a business needs to turn the
mission into a objective.
Distinction between aims (or mission) and
objectives
• Mission: The purpose of the business• Aims: The goals the business wants to
achieve• Objectives: specific targets. Must be
achieved if the business can fulfil its aims. Practical steps to achieve the goals – usually quantifiedAn aim is what you set out to do
An objective is a target you want to achieve
Objective
• Will specify exactly what the business wants to measure, how much of an increase it wants to measure and when it wants to achieve its target.
‘To increase profits by 20% over a five-year period’
The business then has to turn this overall objective into more detailed targets for individual departments and managers.
Objectives
• Objectives are steps which help to achieve an aim.
• All objectives should be measurable – so that achievement can be checked.
• All objectives must be monitored regularly – to check achievement.
ObjectivesThe best objectives are SMART.
S
M
A
R
T
Specific
Measurable
Agreed (Achievable)
Realistic (researched)
Time-constrained
S
M
A
R
T
Save £130 for a holiday
£5 per week
Friends informed!
Leaves £20 for spends
Do for 6 months
Example of SMART objectives
Decide Aims Specify Objectives
Check Performance
Regularly
If unsatisfactory
Take Corrective
action Adjust/review
objectives
Change aims
Setting and
Monitoring
Aims
And
Objectives
Get Fit Lose 10 lb In 4 weeks
Weigh self each week
Exercise more
Lose 10 lb in 10 weeks
Learn to drive
ActivityOn a separate piece of paper to hand in
• Write down your Mission statement for your studies this year.• Write down your aim for iGCSE Business• TARGET for iGCSE Business studies (Grade).• Write at least one SMART objective for yourself.• E.g ‘ To study at least 2 hours a week and achieve a B at the end of the year’
(Measureable and time specific)
Why set aims and objectives?
• Aims provide a focus for the business.• Aims highlight key areas of development
and achievement.• Objectives ‘break down’ aims so that they
are easier to achieve• Objectives can be ‘shared’ so that many
people are responsible for their achievement in their own areas.
Example of shared objectives
• Sales investigate new selling opportunities• Marketing increase advertising/promotions• Production produce more to meet increased
demand• Distribution increase supply of goods to retailers
Aim: To improve profitsObjective 1: To increase sales by 10%
over the next 6 months
Summary
• Mission: The purpose of the business• Aims: The goals the business wants to achieve• Objectives: Practical steps to achieve the goals – usually
quantified.
• Aims must be relevant to the organisation.• Objectives are steps to achieve targets.• Objectives can affect everyone in the organisation.• Objectives must be monitored regularly.
p
• Businesses work to broad goals, which may be broken down to objectives.
• Objectives should be SMART• Broad objectives usually relate to profit,
growth & market share
Sell this ProductThe challenge:Identify an important
feature/concept from this lesson…. ‘Sell it’ to the class.
• ‘Our product ‘setting aims’ are like no other because…’
• ‘Your company needs to ‘have a mission statement because’ our product because…’
• ‘Setting Objectives will revolutionise…
• ‘Benefits of setting aims is groundbreaking because….’
PlenaryLevel achieved_____
What do you now know as a result of today’s lesson?
What are your areas for improvement? What are you going to do about this?
1.2 The organisation
1.2.2: Stakeholders and their differing objectives
UNIT 1.1
Target Learning Objective Outcome Who? Keywords
State the role of the different groups involved in business activity and their objectives; consumers, employees, managers, owners, financiers and shareholders
Identify, describe and explain the objectives of different stakeholder groups
ALL
C
• Managers• Shareholders • Stakeholders• Suppliers
Explain the stakeholder role
Use examples to illustrate such objectives
MOST
B
SOME
A
1.2 The Organisation
28
What are stakeholders?
• People or organisations with a special interest in a business.
• This is normally because they are directly affected by the business and how it operates – both now and in the future.
29
Types of stakeholders
The government
The local community
Owners and
shareholders
Employees and
managers
CustomersFinanciers
Pressure groups
Suppliers Stakeholders
30
Power and influence
• Some stakeholders are powerful. They can influence how the business operates.
• Some stakeholders have little power. The business can virtually ignore their views.
31
Identify the powerful
Which three have the power?• An individual employee in a large firm• A bank which has lent a lot of money to a small
firm• A supplier of a major product, eg Microsoft• A small supplier to a large supermarket• An important customer of a small firm
32
Stakeholder interests All stakeholders have different types of interests:• Customers – price, quality, range of supplies,
opening hours, facilities, etc• Employees – pay, working conditions,
job security• Owners/shareholders – profit, share price,
dividends• The local community – road building, pollution,
safety, house values, jobs
33
Stakeholder interests
• Government – legal issues, environmental issues, competition
• Pressure groups – interests of members and those they represent
• Suppliers – price paid for their supplies, further orders
• Financiers – profits, return on money invested, repayments of loans
35
Conflict and stakeholdersConflict can arise in a business because stakeholder objectives are different.
• Local community against expansion of business, employees want job security
• Shareholders want high dividends, managers want to use profits for investment
• Suppliers want high prices for goods they supply, customers want low selling prices
36
Stakeholder summary
All stakeholders have an interest in a business.• Different groups have different interests• Interests may conflict• Business will be most likely to respond to
the most powerful groups
p
• A stakeholder is an individual or group that has an interest in decisions taken by a business.
• Sometimes stakeholders have the same interests, but their interests may also differ and conflict.
• Owners are very important stakeholders. They play a key part in setting up and ensuring the continual success of a business.
• Main stakeholders are owners, employees, customers, communities, government, pressure groups, trade unions and employer associations.
Target Learning Objective Outcome Who? Keywords
State the role of the different groups involved in business activity and their objectives; consumers, employees, managers, owners, financiers and shareholders
Identify, describe and explain the objectives of different stakeholder groups
ALL
C
• Managers• Shareholders • Stakeholders• Suppliers
Explain the stakeholder role
Use examples to illustrate such objectives
MOST
B
SOME
A
1.2 The Organisation
COMPLETE
PlenaryLevel achieved_____
What do you now know as a result of today’s lesson?
What are your areas for improvement? What are you going to do about this?
1.2 The organisation
1.2.3: Aims of private and public sector enterprises
UNIT 1.1
Unwrap the
‘present’ answer
the question
(teacher prepare before hand)
1.3 Changing business environment
1.3.1: Government influence over decision making by using economic policy measures
UNIT 1.1
Target Learning Objective Outcome Who? Keywords
State the role of the government in influencing decisions within local, national and international contexts and explain how business may react
Identify need for intervention Show understanding of the impact of intervention in terms of business decisions e.g. what is produced and how Give examples of intervention both to support and control the impact of business activity on people, the economy and the environment
ALL
C
• Direct Tax• Fiscal Policies• GDP• Indirect tax• Inflation• Monetary
Policies• Money Supply• Public
Expenditure
Demonstrate an awareness of the impact that tax and interest rate changes might have on business decisions
Know how interest rates affect business Know how different tax changes affect business Understand how business decisions will be affected by such changes
MOST
B
SOME
A
1.3 Changing business environment
Starter Stars
Plan the starter for next lesson…
recapping this lesson
(e.g Mind map pg 25)