Business Objectives and Stakeholder Roles in a Company
Setting SMART Business Objectives
Objectives should be SMART: Specific, Measurable, Achievable, Realistic, and Time-Specific.
Understanding Corporate Aims
Corporate aims are very long-term goals, the core of business activity is expressed here. Benefits include:
- Serving as a starting point for the entire set of objectives
- Developing a sense of purpose and direction
- Allowing an assessment to be made
Mission Statements
A mission statement is an attempt to condense the central purpose of a business’s existence into one sentence. It is not concerned with specific, quantifiable goals but tries to sum up the aims of the business in a motivating and appealing way. A mission statement (by definition) is a statement of a business’s aims, phrased in a way to motivate employees and to stimulate interest by outside groups.
Corporate Objectives
Corporate objectives are based upon the central aim or mission of the business, but they are expressed in terms that provide a much clearer guide for management action or strategy. Examples include:
- Profit maximization
- Profit satisficing
- Growth
- Increasing market share
- Survival
- Corporate Social Responsibility (CSR)
- Maximizing short-term sales revenue
- Maximizing shareholder value
Corporate objectives are determined by factors such as corporate culture, the size, and the legal form of the business.
Divisional, Departmental, and Individual Objectives
Once corporate objectives have been established, they need to be broken down into specific targets for separate divisions, departments, and, ultimately, individuals. Corporate objectives relate to the whole organization. They cannot be used by each division of the business to create strategies for action until they have been broken down into meaningful targets focusing on divisional goals.
Key Stakeholders and Their Roles in a Business
Owners
A business may be owned by a single individual (a sole trader), partners, or by a group of shareholders forming a company.
Role of Owners: They must provide the resources that are required for the business to operate efficiently. These include the employment of workers, identifying suitable premises, and procuring machinery, equipment, and raw materials. They must make timely decisions to ensure that the business remains profitable. They must motivate employees to perform well.
Employees
They are employed to carry out assigned tasks to achieve the company’s objectives.
Role of Employees: Employees must work efficiently to accomplish tasks assigned. Accomplishing tasks may require teamwork, and therefore employees must have good interpersonal skills. Employees must adhere to the rules and regulations of the company.
Customers
They are the supporters of businesses in the economy. They purchase goods and services to satisfy their needs and wants.
Role of Customers: They assist businesses in identifying the goods and services to be produced based on their demands. They also help businesses to identify changing trends in the market and so prepare business operators for future demands.
Society
Businesses must be aware of society as a whole, how their activities affect it, and not only those who are customers.
Role of Society: The production process may cause air pollution and discharge of harmful waste into rivers and seas. Society keeps businesses in check by making them aware of their impact. They write letters to the company and the media and speak on talk shows.
Government
They are the managers of the economy within which the business operates.
Role of Government: Regulate business activities to protect consumers. Government agencies ensure product standards as well as that various legislations are adhered to, to ensure the protection of consumers’ rights.