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Business Objectives

IB Business Management
Learning Objectives

● Explain the definitions and roles of vision and

mission statements.
● Examine common business objectives.
● Explain strategic and tactical objectives
● Describe corporate social responsibility
(CSR)
QAK vision

Our vision at Qatar Academy Al Khor is to empower

students to be open-minded, inquiring and knowledgeable
life-long learners who are able to adopt to an
ever-changing world through intercultural understanding
and respect.
QAK Mission

Our mission at Qatar Academy Al Khor is to create a safe

yet dynamic learning environment that inspires
innovation. QAK empowers learners to think critically as
compassionate and principled global citizens grounded in
Arab values while celebrating Qatari national heritage and
culture.
Vision statement

A philosophy, vision or set

of principles which steers
the direction and
behaviour of an
organization
Mission statement

A mission statement tends to be a

simple declaration that broadly states
the underlying purpose of an
organization's existence

A mission statement outlines how a vision

statement will be achieved.
 Comparison of vision & mission statements

Vision Mission

Concept What do we want? Why we are doing what we are doing?

Purpose Points to the future. Based upon where business is now, what needs
What business would like to see itself as. to be done to achieve the vision.

Audience Internal use: inspires and motivates Internal use: means for accountability by
employees defining key performance indicators.
External use: gives a sense of shared belief External use: measures how successful a
to customers business is at achieving its vision.

Change Never changes May needed to be modified to meet new

circumstances
 Be reflective
Here are the vision statements of two large organizations:

Oxfam: “A just world without poverty.”

Amazon: Our vision is to be earth’s most customer centric company; to build a

place where people can come to find and discover anything they might want to buy
online.”“

What do the statements reveal about the aims and attitudes of the organization?

Look carefully at the word that each statement uses - what affect do they have on
you?
Aims

Aims of a business are its long-term goals

Example: “We aim to deliver consistently high quality

plant and garden products through a helpful sales staff.”
A vision statement is usually a summary of the aims.
Common business objectives:

• Growth
• Profit
• Protecting shareholder value
• Ethical objectives
 The biggest risk is not
taking any risk... In a world
Growth that is changing really
quickly, the only strategy
that is guaranteed to fail is
● This is usually measured by an increase not taking risks.
in its sales revenue or by market share.
Mark Zuckerberg,
● Growth is essential for survival in order co-founder of Facebook,
to adapt to ever-changing and the world’s largest social
competitive business conditions. media platform 1
● Failure to grow may result in declining
competitiveness and threaten the firm’s
sustainability.
 There is one and only one social responsibility
of business – to use its resources and engage
in activities designed to increase its profits.
Milton Friedman,
Profitability recipient of the Nobel Prize in Economics in
1976
• Profit maximization is
traditionally the main
business objective of
most private sector
businesses.
• It provides an incentive
for entrepreneurs to
take risks in setting up
and running a business.
 If the customer is
happy, the
business is happy,
Protecting shareholder and the
value shareholders are
• This objective is about happy.
earning a profitable return for
shareholders in a sustainable Jack Ma,
way. co-founder of
Alibaba Group
• A challenge for the directors
of a firm is to balance
short-term profits (in the
form of dividends) with an
investment in the long-term
value of the company.
Ethical objectives

● Ethics are the moral* principles that

guide decision-making and strategy.

○ *Morals are concerned with what is

considered to be right or wrong,
from the point of view of society.

● Therefore, business ethics are the

actions of people and organizations
that are considered to be morally
correct.
Unethical business practises at Theranos

● In 2003, Theranos, a blood testing

company, claimed to have invented a
medical machine that could detect
diseases using only one drop of
blood.
● In 2016, the firm was forced to shut
down after an investigation showed
the machine had technological flaws
that produced widespread inaccurate
results.
● In 2018, the CEO and COO were
charged with massive fraud by
government authorities.
Objectives and their
importance to a firm
• Objectives are the goals or
targets an organization strives
to achieve. To measure To motivate
• They are generally specific and control
and quantifiable and are set in
line with the organization’s
mission statement.
• Objectives are important for
three reasons:
To direct
Objectives

Objectives are the medium to short-term goals that clarify how the business
will achieve its aim and reach its vision.

Business objectives come in three types:

● Strategic objectives: Long-term goals set by higher management.

● Tactical objectives: Medium or short-term goals set by middle
managers.
● Operational objectives: Day-to-day goals set by floor managers or
workers themselves.
 Advantages and disadvantages of ethical business
practises
Advantages Disadvantages
● Improved corporate image ● Compliance costs
● Increased customer loyalty ● Lower profits
● Cost-cutting ● Stakeholder conflict
● Improved staff morale and motivation ● The subjective nature of business ethics
 The hierarchy of objectives - an example

Aim Strategic Tactical objective Operational

objective objective
To be the most To have the To hire and To have the
successful car highest market retain enough average amount of
dealership in share of car salespeople so time that a
the city. dealerships in the dealership customer waits to
the city. has sufficient be greeted by a
salespeople to salesperson to be
serve customers less than two
at all times. minutes.
SMART objectives
SMART objectives
1.Specific – Objectives should specify what they want to achieve. - ie
one named person is responsible for delivering the objective

2. Measurable – You should be able to measure whether you are

meeting the objectives or not.

3. Achievable – can the objectives be met?

4. Realistic or Relevant – Can you realistically achieve the objectives

with the resources you have?

5. Timed – When do you want to achieve the set objectives? i.e within
a given period of time eg 12 months
Business strategy

Plan to achieve a strategic objective in order to work towards the aims of

the business.

● It is medium to long-term
● Created by senior management
● Strategic plan includes:
○ Analysis of where the business is
○ Development of a plan (strategy), for how to get to where the business
wants to be (aims)
○ Consideration of how to implement the strategy
○ A periodic evaluation of the process
Business Tactic

Short-term ways that firms can use to

achieve their aims and objectives
The need to change objectives

Objectives change because of changes in either

of these environments:
● The internal environment
● The external environment
Changes in internal environment

➢ Leadership
➢ HR
➢ Organization
➢ Product
➢ Finance
➢ Operational
Changes in external environment
What does “being ethical” mean to you?
Corporate Social Responsibility (CSR)

Corporate social responsibility (CSR) refers to the value,

decisions and actions that impact society in a positive way. It is
about an organization’s moral obligations to its stakeholders,
the community, society as a whole and the environment. It is
about an organization using ethical objectives to commit to
behaving in a socially responsible way towards its internal and
external stakeholders, not just to the owners or shareholders.
Examples of unethical business

► Financial dishonesty
► Environmental neglect
► Exploitation of the workforce
► Exploitation of suppliers
► Exploitation of consumers
Why set ethical objectives?

★ Build customer loyalty.

★ Create a positive image
★ Satisfy customers’ expectations for ethical behaviour
★ Develop a positive work environment
★ Reduce the risk of legal redress
★ Increase profits
The impact of implementing ethical objectives

➢ The business itself

○ Profit to rise in long run.
○ Resistance from management/employees
➢ Competitors - In order to maintain their market position they may have to
response
➢ Suppliers - may have to respond by being ethical as well
➢ Customers - trust the business and build brand loyalty
➢ The local community - improvement of relationship between business and
community
➢ Government - pressured from voter, now governments are trying to
motivate businesses to be more ethical.
 Be a thinker!

Many businesses set ethical objectives.

What are the three or four most
important ethical principles that you
would want in any organization that you
work for or start up yourself?