The organisational purposes of business
Identify the purposes of different types of organisation
It is necessary for an organisation that, before it devises its strategy, it must know where it is going and in what direction to move to pursue such aims. J Thompson (1990) describes the mission statement of a company as defining the primary purpose of the organisation, what business it is in and, whom the company is seeking to serve and satisfy. Therefore, the organisation activities should revolve around the mission statement. Many companies, in order to remind employees about their roles and what is being pursued, they have mission statements on the wall. Furthermore, Vision builds up on the Mission Statement, that is, what the organisation aims to grow in the future. Richard Koch (1997) defines vision as a long-term target of how the organisation be shaped in the future and what it could become. Additionally, he clearly differentiates the mission, that is the company’s role and nature and; the vision, that is, what the company could turn into the future. To maintain focus on the direction needed and to have success, aims are necessary for the organisation. These aims can include profit, market share and development and return on capital employed. So, in order to be able to meet the desired aims, objectives have to be set (Adapted from Dransfield et al).
Management by Objectives was a system introduced by Peter Drucker (1954), where employees’ objectives are aligned with the organisation’s goals. Having people know how their contribution towards the organisation reflects the whole picture of the strategy will motivate them, keep them loyal and increase the global performance. Drucker devised a five stage process, each stage with its challenge and how to be addressed. First stage is setting the organisational objectives (Mission Statement and Vision) subsequently clear goals and targets need to be made available and understood by all employees. By having employees participate in the goal setting, they
It is necessary for an organisation that, before it devises its strategy, it must know where it is going and in what direction to move to pursue such aims. J Thompson (1990) describes the mission statement of a company as defining the primary purpose of the organisation, what business it is in and, whom the company is seeking to serve and satisfy. Therefore, the organisation activities should revolve around the mission statement. Many companies, in order to remind employees about their roles and what is being pursued, they have mission statements on the wall. Furthermore, Vision builds up on the Mission Statement, that is, what the organisation aims to grow in the future. Richard Koch (1997) defines vision as a long-term target of how the organisation be shaped in the future and what it could become. Additionally, he clearly differentiates the mission, that is the company’s role and nature and; the vision, that is, what the company could turn into the future. To maintain focus on the direction needed and to have success, aims are necessary for the organisation. These aims can include profit, market share and development and return on capital employed. So, in order to be able to meet the desired aims, objectives have to be set (Adapted from Dransfield et al).
Management by Objectives was a system introduced by Peter Drucker (1954), where employees’ objectives are aligned with the organisation’s goals. Having people know how their contribution towards the organisation reflects the whole picture of the strategy will motivate them, keep them loyal and increase the global performance. Drucker devised a five stage process, each stage with its challenge and how to be addressed. First stage is setting the organisational objectives (Mission Statement and Vision) subsequently clear goals and targets need to be made available and understood by all employees. By having employees participate in the goal setting, they