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 will know what their goals are which in the end will result in achieving the organisation’s objectives. Furthermore, a monitoring system has to be in place in order to keep track if things are moving in the projected way.
Evaluation of the performance achieved is an important aspect of MBO, and by having predefined what will be achieved and how it will be achieved, it is relatively straightforward. Rewarding the target achievers will send a clear message that MBO is not just an application but also forming part of the performance appraisal. Setting SMART objectives whilst keeping a fair and accurate evaluation is an essential part of the MBO system (http://www. mindtools. com /pages/article/new TMM_94. htm). Businesses are incorporated for various reasons, some simply to make a profit and others to provide a service to the community.
But all of them have corporate responsibility to their respective stakeholders and the market they operate in. Therefore, corporate responsibility can be linked to the business’s ethics and values. In the past, Governments regulated the corporate responsibility in respect of financial and social responsibility, but with globalisation all the world has to be taken in perspective, mainly because of the increased pressure groups that monitor constantly what corporations are doing and how they are doing it, which include environmental issues and labour laws.
Therefore, responsibility is also towards the general public as they have access of how the organisation deals with its stakeholders. Apart from the large penalties and fines that are imposed on businesses that are not in line with the social and environmental legislation, another aspect that the organisation has to keep in mind is that shareholders are aware of the customer’s perception in respect of unscrupulous companies and therefore, they invest more eagerly in companies that demonstrate corporate responsibility (http://en. wikipedia. org/wiki/Corporate_social_responsibility). ?
Describe the extent to which an organisation meets the objectives of different stakeholders The stakeholders of a business are those parties that have a direct or indirect interest in the organisation. Apart from the investors, employees, customers and suppliers; the government, the community and trade associations do also have a legitimate interest in the organisation. The shareholders upon investing in the organisation have risked their capital, but if the company will do well, not just the share price will increase in value but the dividend earned will be higher. On the other hand, if the business fails, they could lose their investment.
Furthermore, in today’s competitive world, employees may be required to change the nature of their duties and responsibilities and this will result in either staff turnover or in a difficult situation to terminate some staff. Therefore, employees need a strong company that offers job security which will develop as a protection to their personal lives. With the increase in competition, customers are always looking for the best possible prices available. They will not just seek these opportunities on a regional basis but with the help of e-commerce they can see what’s available on offer worldwide.
Suppliers also have their share interest in the organisation, because if the organisation does well, custom may increase and Creditors want the organisation to succeed as well in order to get back the money owed plus making a profit out of the deal. Government on the other hand, does not only benefit from the revenue generated on Company Tax from profits and VAT contributions of successful companies, but if the organisation closes its doors, the government will be faced with a problem in terms of unemployment.
On the other hand, the society will be concerned that the organisation, with its operations, is not of any danger to the public and that the damage to the environment is minimised as possible. If the organisation is not financially stable, it may reduce costs that affect these objectives. Even the local community depends on the success of the organisation, as new businesses will open to meet the needs of the large company, and the employees who work there. If the organisation fails, these companies will shut down as well (http://tutor2u. net/business/gcse/organisation_stakeholders_ethics.
htm and from Dransfield et al). Explain the responsibilities of an organisation and strategies employed to meet them Stakeholders analysis is used to factor in the interest of the main stakeholders in the matter concerned. To successfully implement new strategies or projects, the organisation needs to have the support and understanding of the involved parties. In order to minimise as much as possible resistance, the stakeholders need to feel the ownership of the project and what are the advantages gained from the outcome of such developments (http://www.
pmhut. com/what-is-stakeholder-analysis). The power that stakeholders hold on the company depends on how much the organisation is dependent on the stakeholder. This power either comes from supplying important skills or resources to the organisation or else by the power that is exerted from a strong pressure group. Generally, the objectives of the company reflect the stakeholders’ values and aims but, unfortunately how the polices may be implemented will reflect one group over other, and this will result in conflict between stakeholders.
Internal politics, bad management and change in strategies and polices are situations where conflicts may arise (Adapted from Needham et al). The Power/Interest Grid is a valuable tool for management to determine which are the key stakeholders during a project, that is, who have the most power and influence. Focusing on the main stakeholders will be crucial for the success of the project. With this matrix, it will be easy to establish on prioritisation of energy, time and whom to monitor closely during a project (http://www. brighthub.
com/office/project-management/articles/8052 3. aspx). Therefore, by satisfying stakeholders’ objectives, analysing stakeholders’ needs and clearly mapping their power, will fruit in successful management (Adapted from Dransfield et al) Furthermore, businesses have also legal responsibilities. Unfortunately sometimes there are organisations that try to take advantages of selling a defective good or inadequate service if they can get away with it. In order to minimise such instances there are various laws and acts set up to protect the consumer.
Examples of such laws are the Directive 2005/29/EC, which is, the Unfair Commercial Practices Directive and the Product Liability Directive. Therefore, in order to meet such obligations, the organisation has to have in place a quality control system to check the level of quality of the final product to eliminate or at the least to minimise defect products. Another system would be to set up a professional customer relations office where queries and complaints from the customers will be handled, answered and reported accordingly in order to minimise the inconveniences already caused to the consumer (http://en.
wikipedia. org/wiki/Unfair_Commercial_Practices_Directive; http://en. wikipedia. org/wiki/Product_Liability _Directive). The Employment Law address the legal rights of/ on working people and their organisations. It clearly defines the various aspects of the relationship between trade unions, employers and employees. Another requirement is to ensure that the health and safety provisions, as stated in the Health and Safety at Work Act, are met.
In order to meet such obligations, employers upon engaging new staff, in the contract of employment can specify exactly the terms of employment, including therein details such as wages and other details and/or requirements as stipulated by law. In respect of the Health and Safety Act, the organisation can set up a Health and Safety Committee that part of its functions would include investigating potential hazards, examine causes of accidents and to make recommendations to the employer about health, safety and welfare matters (http://en. wikipedia. org/wiki/Employment_law).
With the growing understanding and awareness in reducing the damage to our ecosystem, international laws have been regulated in a way to provide guidelines regarding pollution, waste, sustainability and conservation. Directive 2004/35/EC clearly stipulates the framework and the responsibilities in this aspect. Apart from being environmental friendly increases the costs of the organisations, organisations have to be more proactive in order to avoid penalties. These penalties will not only have a monetary effect on the organisation but damage will also include to the corporate image and reputation of the organisation.
Examples of strategies to meet these responsibilities will include the use of renewable energy resources like solar energy or wind power and the setting up of an Environmental Audit that will help the company to be more compliant with the organisation’s environmental goals and legal regulations (http://europa. eu/legislation_summaries/environment/general_provisions/l28120_en. htm). Conclusion From this first section, I can understand the importance of the Mission Statement, Values and Aims of an organisation because they are the starting point for devising the policy of the company, where it wants to go, and how to achieve the desired goals.
Before devising new strategies or implementing new procedures, the organisation has to clearly define and understand its stakeholders in order to meet and satisfy their respective needs and thus minimising conflicts and lower resistance. Furthermore, the company has to keep conformity with the legal responsibilities it holds, as in not doing so, not only will mean fines and less profit, but it can result in damaging the goodwill of the company which will reflect negatively on the stakeholders’ perception towards the company. Referencea