SM Chapter 4

7/29/2019 SM Chapter 4

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A NAG

DesignedbyAnu

bhuti


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CORPORATE MISSION,

OBJECTIVES ANDRESPONSIBILITY


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BUSINESS DEFINITION OF AN

ORGANIZATION


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BUSINESS DEFINITIONS OF

HINDUSTAN LEVER, HERO HONDA,

KODAK INDIA AND HERO CYCLES


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A Mission Statement-

Embodies the business philosophy of a companys decisionmakers

Implies the image the company wishes to project for itself

Reflects the companys self-concept

Indicates the companys principal product or service areasIncludes the customer needs the company seeks to satisfy

MISSION STATEMENT


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MISSION AND VISION

BASIS MISSION VISION

Concerned with Present Future

Answers thequestion

What is ourbusiness?

Which way shouldwe be going?

Focuses on Present strategic

thrust

Chartering the

strategic path


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A mission statement should- be a declaration of organizational purpose, attitude or outlook.

have a clear customer orientation.

be a declaration of social objectives or policy.

It should answer questions pertaining to companys - Philosophy

Self-concept

Products or services

Markets

Technology Concern for survival, growth and profitability

Customers

Concern for employees

Concern for public image

DEVELOPING THE MISSION

STATEMENT


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MISSION STATEMENT : TATA IRON

AND STEEL COMPANY

To strengthen Indias

industrial base through

increased productivity;

Effective utilization of

manpower and material

resources; and,

Continued application of

modern scientific

managerial methods.


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MISSION STATEMENT: PEPSICO

AND DELL COMPUTERS

PEPSICO

To increase the value of

our shareholders

investment.

DELL COMPUTER

To be the most

successful computercompany in the world at

delivering the best

customer experience in

markets we serve.


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Can be vague or toogeneral

Might be too specific

Inhibiting role playedby departmental

interests andpriorities

Difficult to identifythe benefits

Staffs unawarenessMission statements

alone are not enough

Companies takingdecisions inconsistent

with missionstatement

Short relevancenature of mission

statement

PROBLEMS WITH MISSION

STATEMENT


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The corporate philosophy envisages the basic beliefs, values,

aspirations and philosophical priorities of a company which

the management or strategic decision makers are committed to.

Corporate objectives are

Focused;

Specific; and,

Usually quantitative.

CORPORATE PHILOSOPHY


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Desired states or outcomes are objectives. Goals are

objectives that are scheduled for attainment during planned

period.Ackoff

Categories of corporate objectives:

Strategic

Tactical

Operational

CORPORATE OBJECTIVES AND

GOALS


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Market standing

Innovation

Productivity

Physical and financial resources

Profitability

Manager performance and development

Worker performance and attitude

Public responsibility

AREAS OF OBJECTIVE SETTING:

PETER DRUCKER


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Objectives should be-

Clear and, not expressed in vague or general terms

Precise and exact and, should be measurable as far as possible

Consistent with organizational mission

Logical and realistic rather than idealistic Reflecting of all the major areas of company performance and

responsibility

Based on strength and weakness analysis of the company tomake them achievable

Yielding specific results when fulfilled

Reviewed periodically and should be reset in the context ofchanged circumstances

OBJECTIVE SETTING


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We want to become the market leader within the next three

years

Our objective is to increase earning so that we can earn 15 per

cent return on capital employed

We aim to increase productivity by 10 per cent every year

during the next three years

GOOD OBJECTIVE SETTING-

EXAMPLES


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We shall try to improve our position in the market during the

next few years

We shall always endeavour to increase productivity

Our objective is to satisfy customers as far as possible

BAD OBJECTIVE SETTING -

EXAMPLES


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ORGANIZATIONAL LIFE CYCLE,

OBJECTIVES AND STRATEGIC

FOCUS


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If a particular objective of a company becomes extremely

focused and directed towards a specific target, the company is

showing astrategic intent.

Strategic intent of a company is clear about the end or the

target, but, it is flexible with regard to the means and leaves

room for creativity and improvisation.

STRATEGIC INTENT


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Responsibilities are towards various stakeholders and the

society at large.

Sometimes, profit objective may lead to the neglect of

corporate governance and responsibilities.

Examples are: Exxons oil leak in Alaska ; defective tyres of

Firestone; Ford recalling many of their trucks; Union Carbide

gas leak in India (Bhopal gas tragedy), etc.

COMPANY RESPONSIBILITY

STAKEHOLDERS VIEW OF COMPANY


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STAKEHOLDERS VIEW OF COMPANY

RESPONSIBILITY

Stakeholder Expectations/Claims

Stockholders Sharing of profits; additional stock offerings; assets on liquidation; inspection of company books; transfer of stock; election of board of

directors; and applicable additional rights.

Creditors Interest payments as due and return of principal amount; security of pledged assets; relative priority in the event of liquidation;

management and ownership prerogatives if conditions exist with the company (such as default of interest payments).

Employees Attractive compensation package; job satisfaction; freedom from arbitrary behaviour on the part of company officials; share in fringe

benefits; freedom to join union and participate in collective bargaining; satisfactory working conditions.

Customers Competitive price; service provided with the product; suitable warranties; R&D leading to product improvement; facilitation of credit onattractive terms.

Suppliers Continuing business; timely payment and servicing of credit obligations; professional relationship in contracting for purchasing and

receiving goods and services.

Governments Taxes (income, excise, sales, etc.); adherence to public policy dealing with the requirement of fair and free competition; discharge of

legal obligations of business people (and business organizations); adherence to business law (MRTP, FEMA, etc).

Unions Recognition as the negotiating agent for employees; to be recognized as a participant in the business organization; managementscooperation in fair wage settlement.

Competitors Observation of the norms for competitive conduct established by the industry and society; ethical business practices; no price war.

Local communities Place for productive and healthy employment; participation of company officials in community affairs; provision of regular employment;

fair play; interest in and, support of, local government; support of cultural and charitable projects.

The general public Participation in, and contribution to, society as a whole; assumption of some proportion of the burden of government and society; fairprice for products and generating healthy competition.


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STAKEHOLDERS CLAIMS,

COMPANY MISSION AND

OBJECTIVES


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Corporate social responsibility can be defined as the

alignment of business operations with social values.

In India, CSR initiatives are mostly designed for the upliftment

of the economically backward classes.

In companies in developed countries, the focus is more on

adoption of environment-friendly measures or schemes.

CORPORATE SOCIAL

RESPONSIBILITY


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CSR PRACTICES IN CORPORATES

The Infosys Foundation

works for both economic

and social upliftment of the

villages it has adopted.

Hero Honda has adopted a

number of villages in and

around its plant in

Dharughera (near Delhi) forintegrated rural

development.


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The relationship between CSR and profit is complex.

In the case of CSR, costs and benefits are both economic and

social.

Economic costs and benefits may be easily quantifiable, but,

social costs and benefits are not so easily measurable.

CORPORATE SOCIAL RESPONSIBILITY

AND PROFITABILITY


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Social audit evaluates or measures a companys performance

against planned or laid down social objectives or goals.

A social audit should be like a financial audit.

A social audit may be undertaken internally by companies; or,

they may engage outside consultants to conduct the audit.

It improves a companys public image and social standing.

In India, social audit was first carried out for Tata Steel by the

Social Audit Committee appointed by the company.

SOCIAL AUDIT

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SM Chapter 4

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