8.1. FBE Unit 8 Practical - 20-21 Students PDF

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Unit 8: BUSINESS OBJECTIVES (item 8) - PRACTICE 1. Read the following reading and answer the questions Without a doubt, the secret of every good start is to have set a goal to reach. In this way, the path that will allow us to reach it will be straighter, optimizing the efforts needed to achieve it. Without business objectives defined from the beginning, how are we going to obtain good results? It would be impossible. Definition of objectives Clearly defining the objectives of our company is fundamental to organizing the activity at all levels: technical investment, human resources, turnover and sales, advertising... When we have determined where we want to go, we can already define how to do it. In addition, they will allow us to measure and evaluate the results obtained. Involving the whole team in these goals will ensure that you involve them in the results and, therefore, that everyone in your company rows in the same direction to achieve them. Making them public will open up new ways of understanding with investors, suppliers and society in general. Therefore, you must write your business objectives correctly. Characteristics of the objectives When defining a company's objectives, they must comply with a series of characteristics. These objectives must be SMART: S: Specific, not general. They must define a specific action. M: Measurable so that we can assess their compliance. A: Achievable, possible, that can be achieved to motivate us to it and to be really useful for our company. R: Relevant and realistic, important and prudent, but still challenging. T: Timely, delimited in the time, with clear dates marked for its attainment, that is to say, programmed. When writing them, you must keep in mind that the business objectives must be written in positive, without negative connotations, to make them a motivating challenge. It is important that, when organizing the objectives, you have to take into account that they must be hierarchical, so that the most relevant objectives are in the first place. In this way, we will have already established what we want to do, when and how we are going to achieve it, because it is the objectives that determine our plan of action. Functions of a business objective To emphasize the importance of business objectives, some of its functions can be indicated. One of them is to guide and coordinate the decision making and actions carried out within the company at different levels. In addition, the objectives are a reference point to carry out an evaluation and control of the results obtained.

The business objectives also help to motivate the company's workers, allowing them to know, clarify and identify the results that are expected to be achieved. Similarly, they allow to make known to external elements of the company the purposes and intentions of the entity. Questions: a) What does it mean that the objectives must be SMART? b) What functions would you highlight from the business objectives? c) Why should the objectives be written in positive terms?

2. Read carefully the following passage and answer the questions below. Mobelofice Company, Inc. is a major distributor of office equipment and supplies. The company was founded in Palencia in 1955 and it spread throughout the country in the 70's. Mobelofice bought all their products directly to manufacturers. It was organized into five geographical regions and each region, in turn, divided into branch offices located in major cities. The number of branch offices in each region varied from nine to eighteen. Sales representatives were operating from each of the branches and made calls directly to businesses, hospitals, schools, utilities, etc.. Except for a period of recession in the early 70's and from 1982 to 1983 the company had grown and prospered. It kept constantly alert to increase its product lines and respond to the needs of its customers. For instance, they developed a full line of items and furniture for computers, which contributed substantially to sales in recent years. For several years Mobelofice had annual increases of 17 to 19% in sales. In 2020, Juan Belmonte, president of the company, wanted this figure to reach 20%. But he faced up a dilemma. In the past, sales projections and assumptions of corporate planning were based on regional and subsidiaries estimations. He was aware that to motivate the employees it was very helpful setting clear and difficult goals.. They had to be challenging, but possible and accepted. If they were not realistic and were imposed, they could lead to lower effort and increased dissatisfaction. Carolina Gutiérrez, regional manager of the west, received the news that the President expected a 20% increase in sales for the next year. She interpreted it as a quota, rather than a desire. And when she added the projections of her eleven subsidiaries, the increases averaged just under 16%. The forecast reflects the consensus among the managers of the subsidiaries that high levels of growth could not be sustained indefinitely. It was important to have a considerable degree of agreement in the design, at all levels of the organization, because that represented the basis for operational and strategic planning. Carolina wondered what to do: Should I speak with Mr. Belmonte on how unrealistic the target of 20% was? Or should she speak with his eleven subsidiaries and encourage managers (¿order?) to raise their estimations?

QUESTIONS: 1. Was the company alert to changes in the environment? Explain your answer. 2. What was the main problem of interpretation of Carolina? 3. Is it appropriate to establish clear objectives, identifiable and measurable? 4. Why was this goal for Carolina so unrealistic? Is it bad that a goal is unrealistic or utopian? Explain your answer. 5. Is it appropriate to have a consensus on the objectives to be achieved by different managers of the firm? Why?

3. Read the text below "A merger of financial institutions" and then identify and separate the objectives of interest groups (economic, financial, social, labour, society, etc.). A merger between financial institutions El Monte is a savings bank with the largest market share in the province of Seville. Caja de Huelva is a similar entity with the largest market share in a neighbouring province, Huelva. The merger between the two entities seemed like it could have important mutual benefits, but they had to realize that they needed to defend it before the members of both boards of savings banks. Therefore they made a number of objectives that could be achieved through the merger. These objectives are expressed as follows: "They want to create a new financial institution more dynamic, innovative and modern, that would allow a better positioning in the regional and national financial market, would increase profitability, would have a better adaptation to customer needs, would improve productivity by taking advantage of economies of scale that can be generated with the merger and, ultimately, would increase competitiveness in order to strengthen the chances of meeting the social and charitable purposes for which they both were created. This merger, raised voluntarily and on equal terms, is a new way to gain more strength before the entry into the market of much stronger entities that will put at stake all their weapons to capture a portion of the resources that they could be able to, and they will be. " In an internal memo for employees of both entities, they recognized as primary objectives of the merger, the following: "The signing banks state that the ultimate goal of the merger is to build up a new entity more competitive, modern, social and innovative, with the following necessary intermediate targets: - Increase level of competitiveness and penetration through effective guidance and efficient allocation of human and material resources and the exploitation of economies of scale from the merger. - Get a permanent innovation and application of new information, organisational and financial technologies

- Get a profitable financial institution and proper vocation of dimension expansion, exercising technological and market leadership. - To generate enthusiasm and motivation by instilling optimism and offering the best career prospects to the different job groups in terms of equal opportunities and full guarantee of employment. - Strengthen social work in provincial areas of each of the signing banks, with a decentralized approach in decision making and guidance. - Contribute in a balanced way, to strengthen and improve the financial system and support the Andalusian people for the economic and social development of the region. "

4. ENAIRE ENAIRE is a public business entity attached to the Ministry of Development, which manages air navigation in Spain. It has five control centers and 21 towers, which manage 2 million flights a year. All aircrafts that take off, land or transit through Spanish airspace receive communications, navigation and surveillance services through a modern and complete network of facilities operated by ENAIRE. Likewise, these same aircraft are attended by air control personnel who, depending on the phase of the flight, provide service in a specific unit, guaranteeing at all times that the aircraft maintain the safety levels determined by the separations between them. Mission ENAIRE's mission is to provide air navigation services to meet the needs of customers and society as a whole, with safety, quality, efficiency and respect for the environment, thus contributing to the development of air transport in Spain Objectives At ENAIRE, they seek excellence in the provision of air navigation services, and to this end they have five major objectives: - To increase safety levels in its three axes: Operational Safety, Physical Safety, and Occupational Risk Prevention. - To increase the system's capacity and improve the quality of services to meet the demand and needs of customers. - Contribute to the environmental sustainability of air transport, minimizing the impact of flights on the environment. - Ensure the economic and financial viability and improve the competitiveness of the company. - To increase the commitment and motivation of the people that make up ENAIRE's team of professionals as a fundamental engine for the transformation of the organization. 2020 Flight Plan Air transport is of strategic importance to Spain: eight out of ten tourists arrive by air. Air traffic in Spain is growing by an average of 4% a year.

Since safety is the main objective of ENAIRE's activity, specific action plans are being carried out to strengthen the system and achieve the highest possible levels of safety in its operational, physical and occupational risk prevention aspects. The improvement of the capacity and efficiency of the air space is one of the priorities of this plan. The planned improvements in airspace design and the incorporation of new technologies (in line with the SESAR programme) will make it possible to guarantee the fluidity of operations, especially in the most congested areas and in adverse conditions. ENAIRE's commitment to sustainable growth is materialized through more direct routes and green approaches, thus achieving significant environmental benefits: 191,000 tons of non-emitted CO2; 5.5 million nautical miles saved and 61,000 tons less fuel. The 2020 Flight Plan also includes a reduction in the route fee, which positions them as one of the lowest rates of major European suppliers and improves the competitiveness of Spanish air transport. ENAIRE's team of professionals is the fundamental and driving element for the transformation of the organization. Therefore, in order to promote the development of all its potential and talent, this plan contemplates specific development programs in accordance with the particular characteristics and needs of each group. Beyond its borders, this plan promotes the development of its international business through active participation in consortiums and strategic alliances. In this way, they adapt to new models of centralized service provision, taking advantage of business opportunities. To turn the 2020 Flight Plan into a reality, ENAIRE has invested 300 million Euros. A significant investment effort, proof of ENAIRE's firm commitment to be ahead of the future in air traffic management and to confirm its position as one of the main suppliers at European and world level. Questions: 1. Analyze the definition of ENAIRE's mission according to the characteristics it must fulfill. 2. Classify the objectives into economic-financial and economic-social (of the workers, of the company, etc.) 3. Identify specific actions set forth in the 2020 Flight Plan for ENAIRE's objectives. Video: We anticipate the future with the 2020 Flight Plan. https://youtu.be/AiVfL1s8phI Source: https://www.enaire.es/home

5. Answer the following questions on the topic of corporate objectives:

1. What are the objectives? Why are they important for the company? 2. Why do some objectives have to be transmitted out of the company? 3. What does it mean that the term objective is commonly used in a broad sense? 4. Give an example of conflicting goals in a company or any organization. 5. Why are the profitability and growth goals related ? 6. Discuss how economic - social objectives can influence the economic - financial objectives. Give an example of this influence. 7. What is the basis for the criticism of the concept of maximization related to the primary objective of the company according to classical theory? 8. Why is it incorrect the approach of profit as the only purpose of the company? 9. What is the fundamental idea of the theory of managerial objectives? Do you agree with this concept? Explain your answer. 10. Explain the positive aspects that you find in the approach of the Theory of Organization, in the determination of business objectives. 11. Which is a more realistic approach on setting business goals, the classical theory or the theory of the Organization? Why? 12. What is the difference between a satisfactory solution and an optimal solution? 13. In your opinion, do organizations have goals? Explain your answer. 14. Explain the criticisms we can make to the Theory of Organization....