Organization Objectives &
Stakeholders
1.3-Organizational Objectives
and Stakeholders
What is an objective?
 A business aim helps to direct, control, and
review the success activity. There must be an
appropriate strategy (detailed plan of action) in
place to ensure that resources are correctly
directed towards the final goal.
 This strategy should be constantly reviewed to
check to see if the business is on target to
achieve its objectives.
 The most effective business objectibes usually
meet SMART criteria:
SMART
 Effective objectives are SMART
Specific
Measurable
Achievable
Realistic or Relevant
Time Specific
Hierarchy of objectives:
AIM
MISSION
CORPORATE OBJECTIVES
DIVISIONAL OBJECTIVES
DEPARTMENTAL OBJECTIVES
INDIVIDUAL TARGETS
Vision Statement
 A statement of what the organization
would like to achieve or accomplish in
the long term.
McDonald’s Vision Statement:
“Where the world buys more
McDonald’s than any other
fast food”
Mission Statement
 A statement of the business’s core aims,
phrased in a way to motivate
employees and stimulate interest
by outside groups.
McDonald’s Mission Statement:
“McDonald’s aims to be the world’s best quick
service restaurant experience. Being the
best means providing outstanding quality,
service, cleanliness and value so that we
make every customer in every restaurant
smile.”
Difference of Vision vs Mission
Vision statement describes the future if the
mission is accomplished.
Mission statement outlines the purpose of
the organization.
What we do
For whom we do it
What is the benefit
Objectives
Contain the details of how a company is
going to achieve its mission.
Strategic (Corporate) Objectives
Tactical (Operational) Objectives
Strategic (Corporate) Objectives
 Broadly defined targets that a business must
reach to achieve its overall aim; high-risk, longterm, set by board of directors or senior
management, difficult to reverse course.
Common objectives include:
Profit Maximization
Profit Satisficing
Growth
Increasing Market Share
Survival
Corporate Social Responsibility (CSR)
Tactical (Operational) Objectives
Short or medium-term goals that must be
achieved for an organization to meet its
strategic (corporate) objectives.
Set by Senior Managers
Once Tactical (Operational/Divisional)
objectives have been set, these can be further
divided into departmental objectives and then
budgets and targets for individual workers.
Called MbO (Management by Objectives).
Ethical Objectives
Objectives based upon a moral code for a
business. “Doing the right thing” while
conducting business.
Is a business being socially responsible
and at what cost? Does ethics guide the
business decisions?
Stakeholders
Not to be confused with Shareholders.
Shareholders own a share in the
company.
Stakeholder is anyone with an interest in
the business activity.
Environmental/Social Audits
An “audit” is an Independent check.
Environmental Audit assesses the impact
of a business’s impact on the environment.
Social Audit is an independent report on
the impact a business has on society. (May
include pollution, health and safety records, source of supplies,
customer satisfaction, and contribution to the community).
HL **Changes in Corporate
Responsibility
Societal Norms focus on the Stakeholders
(rather than Shareholders)
Publicity (from pressure groups)
Environmentally Sustainable Growth
Global Concern over Climate Change
Legal Changes (local, national, EU) have
forced businesses to avoid bad practices
such as low wages.
Chapter 4-Stakeholders
 Internal Stakeholders:
Employees
Managers
Shareholders
 External Stakeholders:
Suppliers
Customers
Competitors
Government
Special Interest Groups
Banks and creditors, pressure groups
Activity-Starbucks vs Nordstrom
 orGo to www.samples-help.org.uk
1. Select a corporate mission statement
2. Evaluate its usefulness
Does it address/answer:
What do we do
For whom do we do it
What is the benefit
3. How will it affect or impact three different
stakeholder groups?
Stakeholder Conflict
Business decisions and activities can have
both positive and negative effect on
stakeholders.
Conflicts of interest occur when one side is
negatively affected.
Business Decisions or Activities that
may have an impact:
Expansion of a business
Takeover of a competing firm
New IT introduced into production
methods
HL-Stakeholder Conflict
Methods of Conflict Resolution
Arbitration
Worker Participation
Profit Sharing Schemes
Share Ownership Schemes
What are the advantages and disadvantages of
each?