Aims, objectives and vision

Vision and values

A vision is a motivating summary

of what an organisation hopes to achieve. It links the objectives with the core values of the

business

Values are a set of ethical or

operating principles and

beliefs that guide decision making

Aims

Aims are the long term goals of an organisation

“to ensure customer satisfaction”

“to deliver shareholder value”

Objectives

Objectives are medium term targets that act as stepping stones to achieving the aims

“to achieve a return on equity of 16%”

“to increase profits by 10% in 2012”

Aims and objectives

Aims and objectives often relate to:SurvivalProfitGrowthProviding a serviceMarket shareCustomer satisfactionEthics and sustainability

Changing objectives

Organisations may change their objectives over time

because...They may achieve their original objectivesThe business has grownThe competitive environment changesThe market changesTechnology changes

Conflicting objectives

Some objectives may conflict. For example:

Profit and growth - expansion can increase costs, especially in the short term

Providing a service and growth - smaller firms may know their customers better than large firms and therefore be able to provide a more personalised service

Purpose of aims and objectives

To provide direction for the organisation

To form a basis for allocating resources

To be motivational

To monitor performance

To measure success

Setting objectives

The objectives that organisations set will depend on several factors:

The overall aimsAnalysis of business performance e.g.

SWOT analysisOwnership – public sector objectives are

more likely to focus on providing a service whereas private sector firms may focus on profit and growth

SMART objectives

SMART objectives make it easier to assess if targets

have been met

Specific

Measurable

Achievable

Relevant

Time-framed

For example...To achieve a 5% reduction in labour turnover in 2011 compared to 2010

Strategy

A strategy is a long term plan by which the aims and

objectives are met.

Strategic decisions are usually taken by seniormanager, have long term implications and may

affect awhole organisation.

Tactics

Tactics are the shorter term activities that a firm puts

in place to implement its strategy.

Tactical decisions are often made by middle managers.