CHAPTER 6: ACHIEVING BUSINESS GOALS

6.1
A goal is a desired outcome that an individual or business intends to achieve within a certain time
frame.
Importance of goals
1. Serving as targets: to make co-ordinated decisions to inform employees what the business is
trying to achieve
2. Measuring sticks: specific goals (benchmarks)- to measure performance
3. Motivation: good quality goals- challenge
4. Commitment: getting employees to achieve goals
S.M.A.R.T goals
Specific: goals should be straight forward
Measurable- decide on goals whose progress can be measured
Achievable: goals need to be challenging but achievable
Realistic: goals should be realistic and achievable
Time-Bound: goals are to be set in deadlines
Business goals- Financial
- maximise profits
- increase market share
- maximise growth
- improve share price
Maximise Profits
Profit maximisation: occurs when there is a maximum difference between total revenue and total
cost
Maximise profit: increased sales
lowering price: consumers purchase more
Profit maximisation: beneficial to a business
Increase Market Share
market share: refers to the business shares of the goal industry sales for a particular product
market share goal for large businesses
increase market share: dominates market
small market gains: large profits
market shares of SMEs are restricted to size
successful strategy to increase market- promotion
Promotion describes the methods used by a business to inform, persuade and convoke customers
to purchase a particular product
advertising emphasises product features
Maximise Growth
businesses can grow internally or externally
internal growth- employing workers
external growth- meting an acquisitions
merging: when two business who sell similar products join together
acquisition: when one business takes over or buys another business
SMEs can also maximise growth. SMEs maintain their size due to avoiding pressure, keeping
control, maintaing personal contact with customers
Improve Share Price
Share: part ownership of a public company
2 reasons for buying shares:
- hope to sell share
- invest into company to expect profit

Companies- maximise return- share prices rise

Businesses should act ethical
Unethical- improve share price- end up detrimental to business
Business Goals: Non-Financial
Social Goals
Community service: business sponsorship- community events and promotion
Provision of Employment: large business- employment- not main goal
Social Justice: responsibility of business- treat customer fairly
Environmental Goals:
Businesses are now recycling, renewing and regenerating a green attitude
Developing product Environmentally Friendly
Business practises reduce impact on plants health
Sustainable development: Occurs when the needs of the present population are met without
endangering the ability of future generation to meet their needs
Personal goals of owners and managers: it motivates business owners and underpins viability of a
business
Achieving a mix of business goals: conflicting nature of goals:
- difficult for the business to achieve financial goals simultaneously as links between goals can be
incompatible. Business owner- maximise profit- increase market share- maximising profit may
not be achievable as;
eliminate expenses- reduce profits (long term)
reduce price- good customer relations
maximise profit NOT for short-term exploitation of customers- loss of loyalty
reducing expenses- decreasing employees- high share price
Staff Involvement:
Involving employees in the decision making and giving them necessary skills and rewards
Vital- provide work environment- maximise employee involvement and satisfaction- high levels
of output.
Managers- pursue workplace practises- labour productivity- staff involvement will be successful
if organisation recognises the importance of
- staff innovation
- motivation
- mentoring
- training
Staff Innovation
Development of new ideas or programs to help the business
intraprenuers: individuals who takes on the entrepreneurial role within a business
Motivation:
- individual, internal process that directs/ energises the persons behaviour. e.g managers
( encourages staff members)
- money is not a motivator, it is a bribe system
Mentoring:
- Process of developing another individual by offering tutoring benefits of mentoring
- socialisation is the process a new employee undergoes in the first few weeks of employment
through which he or she learns how to cope and succeed
- benefits of mentoring:
ensures communication with employees
participants know what is expected
assists with training and development
provides career support
increase skill transfer

Training:
- Refers to the process of teaching staff how to perform their job efficiently boosting knowledge
and skills
- it makes employees multi-skilled:
adapts to changing environment
better customer service
participate and work in teams
gaining promotion and therefore their commitment to the business is greater