3 Business objectives

LEARNING OBJECTIVES In this chapter you will learn how to: • appreciate possible definitions and descriptions of the central characteristics of the arts • consider the creation and interpretation of the arts • be able to defend what you think are the standards of artistic judgment Higher-level LEARNING OBJECTIVES On completing this chapter you should be able to: Apply and analyse: • Vision statement and mission statement (AO2) • Common business objectives including, growth, profit, protecting shareholder value and ethical objectives (AO2) Synthesise and evaluate: • Strategic and tactical objectives (AO3) Chapter 3 Business objectives SAMPLE • • understand how the arts fit into the human experience and the idea of consensus Corporate social responsibility (CSR) (AO3) • be able to discuss the possible status of artistic knowledge compared with other Areas of Knowledge Select and apply the following business management tools: • • consider the unique properties of the arts and how knowledge is constructed in the arts SWOT analysis (AO4) • • appreciate the role of ethics in the arts and be able to discuss ethical considerations that may shape the STEEPLE analysis (AO4) • production of artworks Ansoff matrix (AO4)

BUSINESS IN CONTEXT

Daimler AG – objectives and strategy Daimler AG is one of the world’s most successful automotive companies. With its Mercedes-Benz Cars & Vans, Daimler Trucks & Buses and Daimler Mobility divisions, the Group is one of the leading global suppliers of premium cars and one of the world’s largest manufacturer of commercial vehicles. The Group’s strategic approach can be summarised in three core statements: Move: Reinvent the invention As the inventor of the automobile, it is in our nature to repeatedly reinvent mobility. Our aspiration is to offer environmentally sustainable solutions for mobility and the transport of goods in the future. . . . We are working systematically to achieve our “Ambition 2039” goal of CO2-neutral mobility. To do so, we are also utilising the potential offered by automated driving and digital services. Perform: We create sustainable value We aim to create value that is sustainable. Our business is grounded in what we do best – delighting our customers with fascinating vehicles. Here, the attainment of our profitability targets and the maintenance of a solid cash flow remain top priorities for the short and medium term. ... Transform: Reinvent ourselves Our transformation is a long-term process of adapting the implementation of our structures and processes in cooperation with our employees. We have a workforce that is agile and willing to learn . . . Our corporate culture creates the foundation for the outstanding innovative capability displayed by our employees. We put diversity into practice, . . . and the principle of integrity guides our actions and our relationships with our business partners. Daimler-Benz’s chairman has stated that the overall business has an objective of reaching an average 8–9% profit return on sales. This objective is broken down into specific profit targets for each division of the business such as cars, trucks and buses. Discuss in pairs or a group: • What are the likely benefits to a business of having a ‘strategic vision’? • Why is it important for a business to have environmental objectives as well as financial ones? • What is the purpose of setting profit objectives for each division of a business?

KEY CONCEPT LINK Change Strategic objectives are long term in nature, but nothing is forever. As external and internal conditions change, business objectives need to change as well. But not all businesses are able to cope with change. Many factors affect a business’s adaptability.

Some of these factors are the size of the business, the culture and attitudes of employees, the way the business is organised and the availability of financial resources to invest in change. SAMPLE 37

Mission statements outline the overall purpose of the organisation. A vision statement, on the other hand, describes a picture of the ‘preferred future’ and outlines how the future will look if the organisation achieves its mission. It is a statement of the future position that describes what owners and directors ideally want their business organisation to become.

KEY TERMS mission statement: a statement of the business’s core aims, phrased in a way to motivate employees and to stimulate interest from outside groups vision statement: a statement of what the organisation would like to achieve or accomplish in the long term A mission statement is an attempt to condense the central purpose of a business’s existence into one short paragraph. It is not concerned with specific, quantifiable goals, but it tries to sum up the aims of the business in a motivating and appealing way. It can be summed up as a statement about ‘who we are and what we do’. Here are some examples of mission statements. • An A Level/IB college: ‘To provide an academic curriculum in a caring and supportive environment.’

• Samsung: ‘to devote its talent and technology to creating superior products and services that contribute to a better global society.’ • Huawei: ‘To invest resources in the making of a digitally connected world.’ • Microsoft: ‘To empower every person and every organization on the planet to achieve more.’ • Google: ‘To organize the world’s information and make it universally accessible and useful.’ • Merck: ‘To discover, develop and provide innovative products and services that save and improve lives around the world.’ An effective mission statement should answer three key questions: • What do we do? • For whom do we do it? • What is the benefit? Table 3.1 compares the vision and mission statements of three organisations. So what is the link between vision statements, mission statements and strategies? It is simple. Without the direction and focus brought to an organisation by vision and mission statements, planning new strategies will be like trying to steer a ship with no idea of either where it is or the direction in which it is meant to be heading. Vision and mission statements give the organisation a sense of purpose and can prevent it from drifting between the tides and currents of powerful events. Organisation Vision statement Mission statement Alibaba We envision that our customers will meet, work and live at Alibaba, and that we will be a company that lasts at least 100 years. To make it easy to do business anywhere. Minnesota Department of Health (USA) Health equity in Minnesota where all communities thrive and everyone has what they need to be healthy. Protecting, maintaining and improving the health of all Minnesotans. McDonald’s restaurants To move with velocity to drive profitable growth and become an even better McDonald’s serving more customers delicious food each day around the world.

Our mission is to make delicious feelgood moments easy for everyone. SAMPLE

Table 3.1: Comparing vision and mission statements