BUSINESS AND
MANAGEMENT
MODULE 1
BUSINESS
ORGANIZATIONS &
ENVIRONMENT
ORGANIZATIONAL
OBJECTIVES
“If you don’t know where
you are going, you’ll end
up someplace else.”
Yogi Berra, former MLB player
Introduction
The annual report for Cadbury Schweppes for 1998
stated that there were 8,374 employees. As they arrive
to work each day, the employees know their jobs and
how to do it. This is because each of the employee has a
clearly defined job description which has been carefully
written to ensure that the job is done in an appropriate
manner.
This situation has not been achieved by accident; on the
contrary, careful attention has been given to the needs of
the business in order for it to operate successfully. Each
department will have certain requirements to fulfill which
will have been generated from the company objectives
which clearly state what the business is hoping to
achieve both in the short and long term.
If Cadbury’s did not have any objectives, there would be
nothing for the company to work towards. The objectives
determine the role of the employees within the business.
Context
On occasions when the business is faced with a
difficult decision, reference to its objectives will
help in the decision making process.
 Objectives provide a sense of direction for the
business and its employees; the objectives can
be assessed by reference to targets which in
turn can be measured.

The Nature of Objectives
Objectives are the goals of the business. They
represent the outcomes or targets that the
business wants to gain in order to achieve its
aims.
 The objectives of a business are derived from its
aims.
 Well defined objectives are important.
 They will help the business to be clear about
what it wants to achieve.
 The performance of a business could be
assessed by how effectively it achieves its
objectives.

Characteristics of SMART
Business Objectives

Specific
– stating exactly what it is trying to achieve.

Measurable
– able to be measured to decide if they have been
achieved.

Agreed
– have the approval and understanding of everyone
involved.

Realistic
– able to be achieved by the business taking into account
its resources, competition, market, etc.

Time Specific
– state a time by which they should be achieved.
Formative Case Study - Lenovo



This Chinese multinational technology firm, bought out the personal
computers division of IBM in 2005.
The aim was to establish itself outside of the Asian market by owning
IBM’s globally recognized brands such as ThinkPad laptops.
The company is committed to four key values:
–
–
–
–

customer service
innovative and entrepreneurial spirit
accuracy and truth-seeking
trustworthiness and integrity
Recently, Lenovo has also tried to increase its market dominance by
sponsoring key sporting events.
– Examples include its sponsorship deals with Williams Formula One (Grand
Prix) racing team and the National basketball Association signed in 2007,
and being a key corporate sponsorship of the Beijing Olympic games.
Explain why it is important for Lenovo to specify its organizational
objectives.
Examine the reasons why Lenovo might not be able to meet its
objectives.
Factors Which Determine the
Corporate Objectives of a Business
The size and status of the business.
 The power of stakeholders.
 Ownership.
 Long and short-term objectives.
 External and internal pressures.
 Risks
 Corporate and business culture.
 Number of years the business has been
operating.

THE HIERARCHY OF OBJECTIVES
Management By Objectives
(MBO)
AIMS
MISSION
CORPORATE OBJECTIVES
The business over all purpose. The long-term
goals which a business hopes to achieve. No
two companies will have the same corporate
aims.
A statement of the business’s core aims, phrased in a
way to motivate employees and to stimulate interest
by outside groups. Its an attempt to condense the
purpose of the business’s existence into one
statement.
These are the goals of the business. They
are the outcomes or targets the business
want to gain in order to achieve its aims. The
objective of a business can be derived from
its aims
Specific targets for separate
divisions.
DIVISIONAL OBJECTIVES
DEPARTMENTAL OBJECTIVES
INDIVIDUAL TARGETS
Targets for each
department
Individual
goals/targets
THE HIERARCHY OF OBJECTIVES
TO MAXIMISE SHAREHOLDERS VALUE
Management By Objectives
(MBO)
AIMS
CORPORATE OBJECTIVES
DIVISIONAL OBJECTIVES
DEPARTMENTAL OBJECTIVES
TO INCREASE PROFITS OFF ALL DIVISIONS BY
10% PER YEAR
WITHIN ONE REGION, TO INCREASE
MARKET SHARE BY 10% AND CUT
OVERHEADS BY 5%
MARKETING: Increase Profits by
10%; FINANCE : Reduce Longterm borrowing by 5%; R&D:
Develop one innovative product
each year.
E.G IN THE MARKETING
DEPARTMENT
INDIVIDUAL TARGETS
•Increase Sales by an average of
5% per client.
•Introduce five more clients to
the business each year.
Other Types of Objectives
 Short
term vs Long term
 Tactical (Operational)
 Strategic
 Ethical
 CSR
Tactical (Operational)
 Short
term objectives that are mainly
departmentalized
– More sales; lower costs etc
 Survival
– especially in tough
economic times
– For example, a company may have a
corporate objective of becoming a global
operator in ten years, getting
established in Europe within one year
may be a tactical objective
Strategic Objectives
 Long
term plans that usually affect
the entire business
– Growth
– Image and reputation
– Market share
 In
reality, businesses may have
several strategic objectives taking
place during the same time
Examples: Strategic Objectives





A bigger market share.
Quicker design-to-market times than
rivals.
Higher product quality than rivals.
Better customer service than rivals
Recognition as a leader in
technology
Ethical Objectives
 Ethics
are the moral principles that
guide decision-making and strategy
 An ethical business is likely to treat
its workers, customers, shareholders
and the environment in a responsible
manner
– Exercise - Walmart
Exercise – Peter Drucker
 Complete
the Peter Drucker
assignment found on the “S” drive
Strategic Questions Involving Ethical
Objectives
Is it ethical to reduce costs by exploiting cheaper
labour in less economically developed
countries?
 Is it ethical to sell products that are legal, but
known to harm those who use them?
 Is it ethical to target children in advertising?
 Is it ethical to manufacture products that are
used to kill?

– These are “big” questions that elicit strong views
Class Discussion
– You are the CEO of a company which
produces a special line of men’s clothing
and you are seeking a bigger market
share for your products.
– Using the SMART acronym, establish your
Corporate, Strategic, Ethical and
Operational objectives.
– What possible corporate objective your
business can have with regard to the
following groups of stakeholders?
 Customers;
Suppliers; Employees
Formative Case Study
Case: McDonalds vs Burger King
Source: Business & Management, Paul
Houng, Unit 1.3, Pg 51
DECA Connection



You are to assume the role of a plant employee, who’s
company is experiencing a serious problem with
productivity.
Much of the problem can be traced to employees with
young children.
When their care-giver arrangements don’t work out