Business Management Materials
Summary
CHAPTER 1 UNIT 1. 3 : BUSINESS OBJECTIVES
- A company has vision and mission.
- Vision : outlines the business’ aspirations
- Mission : simple declaration of the underlying purpose of an organization’s existence
and its core values, doesn’t have a distinct time frame and tends to be qualitative
rather than quantitative
- Major differences :
Vision Mission
‘what do we want to become?’ ‘what is our business?’
Focused on the very long term Focus on immediate time period
Updated less frequently Updated more frequently
Do not have actual targets to be achieved Involves the business’s targets
The aims of business in the distant future Outline value of business, what the
business do and why
- Advantages : Having vision and mission helps business to maximize profits and
protect shareholder value.
- Disadvantages : constructing meaningful vision and mission can be time consuming
Organizational objectives are important because :
1. To measure and control the plans as they determine the parameter of business’s
activity
2. To motivate the managers and employees to reach their goal
3. To direct decision making since organizational objectives provides an agreed and
clear focus for every individuals in the department.
COMMON BUSINESS OBJECTIVES
1. Growth
- Growth of a business is usually measured in scale of the increasing sales and revenue
by the market shares. Failure of growth may result in declining competitiveness and
threaten the firm’s sustainability
2. Profit
- Main business objectives especially in private business are to gain maximum profits.
3. Protecting shareholder value
- Organizational business is about maintaining a long term great value for
shareholders. Protecting and maximizing shareholder value will maintain a
profitable return for the shareholders.
4. Ethical objectives
- Ethics are moral principles that guides decision making and business strategy. A
company need to concern about what’s right and wrong for the society’s point of
view.
- Business ethics then are then the actions taken to morally correct the employees.
STRATEGIC AND TACTICAL OBJECTIVES
How business intends to get where it wants to be
- Strategics : medium to long terms plans
- Tactics : short term methods
Tactical objectives
- Survival : since new and unestablished business are likely to encounter a problem,
survival became the key tactical objectives. This is also important to establish
organizations during economic recession.
- Sale revenue maximization : new business needs to strive and maximize its sales and
revenue in order to establish themselves in the marketplace.
Strategic objectives
- Market standing : strategies are needed to maintain or establish the company’s
name in the presence of the business world (industry).
- Image and reputation : a business need to maintain its image and reputation sine a
bad image can turn customers against the firm’s products and services and tarnish
the corporate image of business.
- Market share : a business need to maintain its market share to keep increasing over
the time. Maret shares is measured by the sales and revenues. The higher the
company has a market share, the greater the company’s ability to compete in the
industry.
MULTINATIONAL COMPANIES
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