4. Aims and Objectives

Definition of an objective?

- A business objective is a detailed plan of a method that will be undertaken in order to achieve a stated aim.

What is the definition of an aim?

- A businesses aim is the goal it wants to achieve.

What is the difference between a vision and a mission statement?

- A mission statement is different from a vision statement in that a mission statement is the cause and the vision statement is the effect; a mission statement is something to be accomplished whereas a vision statement is something to be pursued for that accomplishment.

What is a mission statement?

- A written declaration of an organisation's core purpose and focus that normally remains unchanged over time.

What is the relationship between a vision statement and an aim?

- Aims will help a business work towards achieving their vision.

Advantages of objectives (4)

- Allows management to spend their time on the administration aspects of the business. - Streamlines the decision making process and allows management to be more effective leaders. - Can help effectively staff a business as employees will have a firmer understanding of what is expected of them. - Businesses who track their progress towards an objective gain the advantage of continually knowing their exact performance.

What is a vision statement?(2)

- An aspirational description of what an organisation would like to achieve in the long-term future. - It is intended to serve as a clear guide for choosing current and future courses of action of the business.

Disadvantages? (3)

- Can on its own be ambiguous and worthless, as there is a high chance of its design and implementation being wrong. This is due to the fact that they can easily be vague, empty and confusing. - Time consuming; perhaps management's time and resources could be better spent, as if the ultimate goal of developing a framework for the organisation isn't achieved, then it is effectively a waste of time. - Can be unrealistic - things aren't as straightforward in reality as on paper; this leads to firms being over optimistic and confident, and results in the mission statement being impractical.

What is the role of a mission statement? (3)

- Serves as a filter to separate what is important from what is not. - Clearly states which markets will be served and how. - Communicates a sense of intended direction to the entire organisation.

What are SMART objectives?

- Specific - clear and easy to understand. - Measurable - i.e. able to be quantified. - Achievable - possible to be attained. - Realistic - not impractical. - Time bound - associated with a specific time period.

Disadvantages? (3)

- The confidence an organisation can gain from accomplishing previous objectives can lead to overestimations and ultimately failure of an objective, and this can lead to the business spiraling into a sense of defeat and helplessness which can be fatal. - An unclear objective can send team members off in different directions; some might not be sure how to begin, while others will move confidently toward different understandings of the objective. - Employees may find the stress and pressure of attempting to achieve an objective interferes with their ability to perform. This can lead to demotivation and a reduced work rate, therefore decreasing efficiency.

Advantages of vision statements (5)

• A clear vision can give the business a clear identity and ethos • Can help in setting objectives and supporting the business strategy • Focusses senior managers on the tasks to achieve the vision • Communicates to employees how they can contribute and can improve employee engagement • Commits resources to achieving the vision.

Advantages of a mission statement (3)

• Helps to ensure that all stakeholders are clear on the purpose of the business so everyone can be focused on the same goals and objectives • Gives some transparency for investors - they understand how their capital will be put to use • Helps customers understand the ethics and objectives of a company.