For this chapter, you should be able to...

1. explain the definitions and roles of VISION STATEMENT and MISSION STATEMENT
2. define the three types of BUSINESS OBJECTIVES
3. outline the main features of SMART objectives
4. define CORPORATE SOCIAL RESPONSIBILITY
5. outline the reasons why organizations set ETHICAL OBJECTIVES

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1. vision statement vs. mission statement

Vision statement
  • specifies the long term aspirations of a business; where it ultimately wants to be.
  • points to the future and vaguer than mission statements
  • aims to inspire and motivate employees
  • vision statement never changes
Mission statement
  • specifies the aims and objectives of the business in the present.
  • describes the core activities of a business 
  • aims to provide a means for accountability by defining key performance indicators
  • mission statement may change
  

2. types of business aims

There are 3 types of business objectives: Strategic, Tactical and Operational
  • Strategic objectives = set by the senior leadership. They are usually the long-term goals that determine the actions necessary to achieve the goals to guide the company in the right direction to achieve the aims.
  • Tactical objectives = set by the middle management. They are usually medium-term action plans to achieve strategic objectives.
  • Operational objectives = set by the lower management. They are usually day-to-day actions plans to achieve tactical objectives efficiently.
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3. smart objectives

Businesses often use the SMART strategy to set up as effective objectives as possible.
SMART objectives are as follows:
  • Specific - Is the objective clear and well defined?
  • Measurable - Can the objective be measured to see whether it has been achieved or not?
  • Achievable - Can the objective be achieved (is it realistic)?
  • Relevant - Is the objective actually of any use?
  • Time-specific - Has a sufficient time frame been set up?
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4. corporate social responsibility and business ethics

Corporate social responsibility (CSR) =  considers ethical and environmental issues relating the business activity, towards all stakeholders and not just to owners or shareholders. CSR aims to:
  • treat customers and suppliers fair and equally
  • compete fairly (not engaging in predatory pricing)
  • treat the workforce with dignity and listening carefully to their needs
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Business often set ethical objectives for the following reasons:
  • Building up customer loyalty
  • Creating a positive image
  • Developing a positive work environment
  • Reducing the risk of legal redress
  • Satisfying customers' ever-higher expectations. for ethical behavior
  • Increasing profits