IBBusiness ManagementSLRevision Notes1. Introduction to Business Management1.3 Business Objectives1.3.1 Aims, Objectives, Strategies & Tactics

Aims, Objectives, Strategies & Tactics (SL IB Business Management)

Revision Note

Lisa Eades

An Introduction to Business Aims & Objectives

  • Aims and objectives serve as a guide for the businesses' overall strategy and direction, helping to focus efforts and resources toward a common purpose
    • Business aims are the long-term aspirations of an organisation
    • Business objectives are specific, measurable, achievable, relevant, and time-bound targets (SMART targets) that must be achieved to realise those aspirations
        
  • Aims and objectives align the efforts of all employees towards a common vision and ensure that everyone is working towards the same goals

  • They are critical for businesses to function effectively and achieve long-term success
    • E.g. A business aim may be to become the market leader in a particular industry
    • The corresponding objectives may include increasing sales by 25% over the next three years, improving customer satisfaction by 15%, and expanding into new geographic markets
       
  • There is a hierarchy of objectives which cascade downwards

A business starts with high level aims, then develops strategic objectives, tactical objectives, and operational objectives

The Hierarchy of Objectives
 

  • A businesses strategic objectives are determined by its overall aim
  • Strategic objectives then determine tactical and operational objectives which detail the achievable goals a business and its functions want to achieve over a specified period of time
     

An Example of the Hierarchy for an Independent Coffee Shop Chain


Component
Explanation
Example

Aim

  • What the business is looking to achieve in the long term?

  • Usually determined by senior executives

  • Often the same as the overall mission or vision and describes the businesses reason for being

To be the most successful independent coffee shop chain in the country

Strategic Objective

  • The specific performance goals set by senior management for the business to achieve over time

  • Derived from the firm’s overall aim and mission statement

  • Strategic objectives may focus on achieving specified levels of market share, profit, sales growth or new product/market development

To have the highest market share of independent coffee shops in the country

Tactical Objective

  • Objectives set by middle managers intended to direct the targets set by the functional areas they oversee

To hire, train and retain sufficient members to ensure prompt, knowledgeable and engaging customer service in all coffee shops 

Operational Objective

  • The day to day goals or targets of functions or departments within the business, derived from strategic and tactical objectives
  • Tactical objectives must be carefully aligned across functions so that all parts of the business are working towards the shared goal

To reduce average queue times to less than 2 minutes per customer in all coffee shops

Vision Statement & Mission Statement

  • A mission statement outlines the fundamental purpose and reason for an organisation's existence
    • It describes what the company does, who it serves, and how it provides value to its customers or stakeholders

  •  A vision statement articulates the long-term aspirations and future goals of the business
     

A Comparison of Mission Statements and Vision Statements

Mission Statements

Vision Statements

  • Explain the present overall purpose of the business
    • For example, it may refer to the way the business conducts its operations or how it currently meets the needs of customers and other stakeholders
       
  • Mission statements may need to change over time as market conditions develop

  • IKEA's current mission statement is 'To offer a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them.'

  • Sets out what the business wants to achieve in the future
    • These statements are likely to be expressed in aspirational terms and often include the emotional feeling that people should feel about their company

  • They are intended to inspire and motivate and allow stakeholders to understand where the business is heading

  • Vision statements rarely change

  • Audi's long-term vision statement is 'To be the brand with the greatest appeal, fascinating customer-relevant innovations and breathtaking design.'
 

Exam Tip

Vision statements and mission statements are often dismissed as marketing tactics that say little about the real-world impact of a business.

Increasingly, though, brands are reporting on the progress they are making towards fulfilling their mission and acknowledging where changes in the external environment require adjustments to be made. A good example of this is provided by Honest Tea whose 2020 Mission Report explains the challenges the business faced during the pandemic and the necessary changes to its overall mission over the following years.

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    Lisa Eades

    Author: Lisa Eades

    Lisa has taught A Level, GCSE, BTEC and IBDP Business for over 20 years and is a senior Examiner for Edexcel. Lisa has been a successful Head of Department in Kent and has offered private Business tuition to students across the UK. Lisa loves to create imaginative and accessible resources which engage learners and build their passion for the subject.