24/7/13 Sikkim manipal uni
OBJECTIVES: the end sought after by the organization and to be achieved by its operation and existence. An objective helps to justify the existence of the company, be it to the public, government or itself. With a clearly described objective the whole workforce can drive towards it in a unified manner and also attract customers or other organizations that identify with it. It also helps to judge the success of the co. FACTORS SHAPING THE OBJECTIVE:
Resources available depending on the firm’s finances/capability. Value system of the management
An orientation towards truth and knowledge
An orientation towards what is useful
An orientation towards form and harmony
An orientation towards people
An orientation towards power
An orientation towards unity
External forces in the business environment (social, political, economic, technology) and other bodies such as the suppliers, creditors, customers, share holders and competitors. HIERARCHY OF OBJECTIVES
MISSION: it establishes the scope of the business, the main concentration of the co’s effort in terms of consumer, product and business sphere. It provides a systematic overview of the company’s position in the competitive field. Elements of a mission statement: Clear and easy to understand
Current; needs to keep up with the times and changing environment scenario. Inspiring
BUSINESS POLICY: a business policy is a well developed statement of directions and goals . goals involve definitions of precisely what the business is or should be. directions forms the framework clearly guiding the workforce on selecting the appropriate tactics or programs. Framed by the top-management, its meant for the managers to take decisions that will be in the favour of the co.s objective. With a clear cut policy, the management can effectively handle the functions of an organization, i.e. Form of organization
Raising of funds
Method of production
Marketing of goods.
STEPS TO DRAFT POLICY :
Ascertain problems/ hurdles, this allows to develop a working and applicable policy Discuss among the employees and conclude the policy
Explain the policy to the lower levels
Get it approved by the personnel
Maintain a policy manual
Implement and protect it
After the policy is framed, the management needs to assemble/develop the resources required, equip the organization with the necessary tools and continuously guide the workforce. BUSINESS ENVIROMENT: the business environment affects the setting of objectives and hence its policies and strategy. It can be classified into: internal and external. INTERNAL-
Value/virtue of the corporate
Management structure, its composition and extent of specialization. Internal power relations; confidence of share holders and finance institutions in the directors, chairman and management will heighten support. Human resources; skill, morale, character, commitment.
EXTERNAL- divided into micro and macro.
The micro environment consists of the factors in the company’s immediate environment that affects its performance, it is also known as the task or operating environment. 1) Suppliers; a reliable supplier ensures smooth functioning of business and sometimes it becomes necessary to maintain multiple suppliers to lower risk. 2) Customers; they are the life source of the business. Profitability, extent of competition, dependability and growth prospects determines the choice of customer segment. 3) Competitors; a market segment can have several competitors who may not even produce similar goods but who will compete for the discretionary income of the customers. 4) Market intermediaries; the links between a company and the market (if any) are vital to its functioning. The macro environment usually comprises of factors that cannot be controlled. 1) Political environment; it is closely tied with the...
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