LEADERSHIP AND
SETTING
OBJECTIVES
BUSINESS OBJECTIVES AND STRATEGIES
• Business objectives.
• A business objective is a broad statement of intent. It says what the
business wants to achieve.
IMPORTANCE OF BUSINESS OBJECTIVES
• 1. They provide a guide to action.
• 2. Provide a framework for decision making.
• 3. Coordinate activities
• 4. Facilitate prioritisation and resolve some conflicts between departments.
• 5. Measures and control performance.
• 6. Motivate employees.
• 7. Provides a sense of direction and unity.
• 8. Encourages concentration on long term factors
• Businesses have a hierarchy of objectives and at the top is a mission
statement.
• a. This identifies the organisation’s goals and it is a general statement
e.g having quality services, good customer care and provide for the
community at large.
• b. The mission statement is not specific and does not show the
performance measures.
• Objectives should be seen as more specific and quantifiable and should
help in the achievement of the mission statement
OBJECTIVES SHOULD MEET THE SMART
CRITERIA
• S- Specific
• M-Measurable
• A-Agreed with all involved in achieving them.
• R-Relevant and realistic to the needs of the organisation
• T-Time framed i.e. to give a date for final completion.
CORPORATE OBJECTIVES
• Are based on the central aim or mission statement of the business but
they are expressed in terms that provide a much clearer guide for
management action or strategy
EXAMPLES
• 1. Maximising Profits
• It is when a firm achieves the greatest difference between total
revenue and costs which is positive.
• This is because entrepreneurs who invest capital expect a high net
return for taking risk.
2. GROWTH
• Growth is mainly measured in terms of market share and expansion of
business activity.
• Larger firms are less likely to be taken over and benefit from economies
of scale.
• A business that does not grow loses the competitive advantage and
does not attract potential investors.
• However, too much growth can lead to cash flow problems and can be
achieved at the expense of lower profit margins and experiences
diseconomies of scale
INCREASING MARKET SHARE
• This involves selling a greater proportion of the total sales in the whole
market. It indicates
• that the firm’s marketing strategies are a success and there is a
competitive advantage.
• Retailers will be willing to stock and promote the bestselling brand.
4. SOCIAL, ETHICAL AND ENVIRONMENTAL CONSIDERATIONS
• 1. It is the responsibility of firms to the community or the public at large.
Increasingly pressure groups are forcing businesses to reconsider their
approach to decision making and also legal changes have forced
businesses to refrain from certain practices.
• 2. Firms have to consider their pricing, product quality, employment levels
and the way they treat the environment.
• 3. This is reflected in the passing of laws requiring firms to provide equal
employment opportunities, promotion prospects and compensation benefits
to women, racial minorities and the handicapped.
5. SURVIVAL
• i. Firms seek to cover only their costs by getting enough revenue to do
so. This is an
• objective during times when the economic situation is bad and firms
cannot make
• profits. Firms aimed survival so that they will not fail and go out of
business.
LEADERSHIP.
• Leadership is the art of influencing people so that they perform assigned tasks willingly in an effective
and efficient manner.
• It is essential to distinguish between managers and leaders.
• Managers must have leadership qualities.
• Managers who are not leaders will achieve some but not all of the objectives.
• Managers who are leaders will strive for total and enthusiastic cooperation from their subordinates.
STYLES OF LEADERSHIP.
• This refers to the way in which managers take decision and deal with their staff.
• a) Autocratic leaders.
• Autocratic leaders make decisions on their own without consultation.
• They set objectives themselves, issue instructions to workers and check to ensure that work is carried out.
• Workers can become so used to this style that they depend on the leader for all guidance and will show no
initiative.
• Motivation of staff will be very low and supervision of workers become essential.
• Communication is one – way with no feedback.
• This style is useful in armed forces and police.
• It is also applicable in crisis such as an oil tanker disaster, or a railway accident.
• Leaders may have to take full control and issue orders in emergencies as there would be no time for
consultation.
DEMOCRATIC LEADERS.
• Democratic leaders will engage in discussion with the staff before taking
decisions.
• Communication is two way with every opportunity for staff to respond and
initiate discussion.
• (i) Managers must have good communication skills so that they are able to
explain issues clearly and to understand responses from subordinates.
• (ii) Full participation in decision-making is encouraged. This may lead to better
final decisions as subordinates can offer valuable experience to new situations.
• (iii)Consultation with staff is time-consuming, yet sometimes quick decisions will
be required.
LAISSEZ – FAIRE MANAGEMENT.
• (i) Allow workers to carry out tasks and take decisions within very broad limits.
• (ii) There will be very little input from management into the work to be carried
out by staff.
• (iii) It is effective in cases of research and design teams. In other cases such a
style can be disastrous
MCGREGOR’S THEORY X AND Y
• McGregor identified opposing attitudes towards the workers.
• 1. He referred to the negative attitudes as X and the positive Y.
Theory X management assumes. Theory Y management assumes:
.
Workers inherently dislike work and will Spending effort at work is as natural as
try to avoid it where necessary play or rest and the average person likes
work.
Because of this workers should be Employees can exercise their own control,
controlled, directed or threatened in direction, and are rewarded through efforts
order towards achievement of organisational
to get effort towards company goals. objectives.
The average person wants to be The average person learns to both accept
controlled and seek responsibility
and directed, has little ambition and
seeks
to avoid responsibility
• Supporters of Theory X advocate for an authoritarian organisational
structure scientific management and centralized decision-making.
• Advocates of Theory Y argue that the main limiting factor in an organisation
is management’s ability and willingness to develop employee potential.
• Problems arise when employees who expect Theory Y approaches are
subjected to Theory X approaches and vice versa.
