Setting Operational Objectives

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Setting Operational Objectives

The four main functions, or departments, of businesses are marketing, operations, human resources and finance.

Operational objectives

To support the business’s overall objectives, each of these functions or departments will have its own objectives which contribute to the wider objectives set for the business.
It is important that the objectives of each department are aligned to the business’s overall objectives, as if they are not, individual departments may not be contributing to the success of the overall business.

Cost objectives

Operations objectives can be focussed on reducing or maintaining costs, for example fixed and variable costs.
- For example, a value retailer such as Poundland may try to reduce the variable costs of its products by reducing the amount of packaging used. This objective is likely to be important to all businesses which compete on price.

Quality objectives

Operations objectives can be focussed on improving or maintaining quality.
- For example, Rolex prides itself on the quality of its products.

Dependability objectives

Operations objectives can be focussed on dependability. If a business is dependable, customers trust the business as they value reliability and this allows the business to attract customers and increase its selling prices.
- For example, if a retailer is running low on stock, they may pay a manufacturer to distribute a product directly to the customer so that their supply remains stable and customer needs are met.

Environmental objectives

Operations objectives can be focussed on the environment.
- For example, Amazon has created a piece of software which determines the most appropriate size box for packaging to reduce waste and their impact on the environment.

Adding value

Operations objectives can be focussed on added value. Added value occurs when businesses convert raw materials into a finished product and in doing so create a product which can be sold at a greater price than the cost of the individual components or materials used to make the product.
- For example, the actual components and materials used to create an Apple iPhone are worth much less than the purchase price of the product, as value is added because of Apple’s reputation as a manufacturer of smart phones.

External and Internal Influences on Operational Objectives and Decisions

Influences affecting a business’s choice of operational objectives can be internal or external.

The influence of other business functions

The objectives of the three other business functions will influence the choice of operational objectives.
- For example, if the operational objectives are focussed on flexibility and require the recruitment of additional temporary staff for the festive period, the human resources department will need to support this through their responsibility for overseeing recruitment.

How products influence objectives

The type of product or service produced will influence the choice of operational objectives.
- For example, if the product or service produced is sold competitively on the basis of price, objectives to reduce costs may be appropriate.

Availability of internal resources

The availability of internal resources such as capital and labour can influence the choice of operational objectives.
- For example, if there is a shortage of employees, it would be difficult to increase the speed of response and the business’ ability to increase its production levels.

Technological advancements

Technological advancements influence the choice of operational objectives.
- For example, developments in artificial intelligence may allow businesses to improve their production processes.

Changing tastes

Changing customer tastes, needs and preferences influence the choice of operational objectives.
- For example, when customers demanded healthier meals, McDonalds introduced a range of healthier menu alternatives.

Globalisation

Globalisation and competition influence the choice of operational objectives.
- For example, customers’ ability to purchase products directly from China places pressure on UK manufacturers to remain competitive.

1Business Organisation & Environment

1.1Introduction to Business Management

1.1.1Why Businesses Exist & Sectors

1.2Types of Organisation

1.2.1Sole Traders

1.2.2Limited Liability

1.2.3Non-Profit

1.2.4Franchising

1.2.5End of Topic Test - Franchising

1.3Organisational Objectives

1.3.1External Environments

1.3.2Business Mission & Corporate Objective

1.3.3Mission, Corporate Objectives & Strategy

1.3.4SWOT Analysis

1.3.5End of Topic Test - SWOT Analysis

1.4Stakeholders

1.4.1Stakeholders

1.5External Environment

1.5.1Social & Technological Environment

1.5.2Lifestyle & Technological Environment

1.5.3Corporate Social Responsibility

1.5.4Economic Environment

1.5.5Political & Legal Change

1.6Growth & Evolution

1.6.1Growth & Retrenchment

1.6.2Challenges of Growth

1.6.3Growth Models

1.6.4End of Topic Test - Diseconomies of Scale

1.6.5Internationalisation

1.6.6Sourcing Resources & Entering Markets

1.6.7End of Topic Test - Internationalisation

1.6.8Managing Internationalisation

1.6.9Impact of Internationalisation

1.7HL Only: Organisational Planning Tools

1.7.1Organisational Planning Tools

2Human Resource Management

2.1Functions & Evolution of Human Resource Management

2.1.1Setting Human Resource Objectives

2.1.2Human Resource Management

2.1.3Labour Turnover & Retention

2.1.4Labour Productivity

2.2Organisational Structure

2.2.1Organisational Structures

2.3Leadership & Management

2.3.1Managers

2.3.2Management Theories

2.3.3End of Topic Test - Management

2.4Motivation

2.4.1Motivating & Engaging Employees

2.4.2Taylor's Theory

2.4.3Maslow's Theory

2.4.4Herzberg's Theory

2.4.5Different Incentives

2.4.6Evaluating Incentives

2.5Organisational (Corporate) Culture

2.5.1Managing Organisational Culture

2.5.2Organisational Structures

2.6HL Only: Industrial/Employee Relations

2.6.1Improving Employer-Employee Relations

2.6.2Case Study - The Winter of Discontent

3Finance & Accounts

3.1Sources of Finance

3.1.1Internal Sources of Finance

3.1.2External Sources of Finance

3.1.3Factors for Financing

3.1.4End of Topic Test - Debt

3.2Costs & Revenues

3.2.1Costs & Revenues

3.3Break-Even Analysis

3.3.1Profit

3.3.2Break-Even Analysis

3.4Profitability & Liquidity Ratio Analysis

3.4.1Profitability Analysis

3.5Cash Flow

3.5.1Cash Flow

3.5.2Solutions to Cash Flow Problems

3.5.3Improving Cash Flow & Profits

3.6HL Only: Investment Appraisal

3.6.1Investment Appraisal

3.7HL Only: Budgets

3.7.1Cash-Flow & Budgets

4Marketing

4.1The Role of Marketing

4.1.1Setting Marketing Objectives

4.1.2Market Calculations

4.2Marketing Planning

4.2.1Marketing Mix

4.2.2Segmentation

4.2.3Niche & Mass Markets

4.3Market Research

4.3.1Market Research

4.3.2Market Mapping

4.3.3Methods of Market Research

4.4The 4 Ps

4.4.1Product Decisions

4.4.2Pricing Decisions & Price Skimming

4.4.3Pricing Decisions & Price Penetration

4.4.4End of Topic Test - Pricing & Competition

4.4.5Promotional Decisions

4.4.6Promotional Decisions 2

4.4.7Promotional Decisions 3

4.4.8Digital Marketing

4.4.9Evaluating Digital Marketing

4.4.10Case Study - The Marketing Mix & Promotion

4.4.11Place & Distribution

4.5HL Only: The Extended Marketing Mix

4.5.1The Extended Marketing Mix

4.6HL Only: International Marketing

4.6.1International Marketing

4.7E-Commerce

4.7.1E-Commerce

5Operations Management

5.1The Role of Operations Management

5.1.1Setting Operational Objectives

5.2Production Methods

5.2.1Production Processes Overview

5.2.2Production Processes

5.2.3Production Efficiency

5.2.4Technology & Production

5.3HL Only: Lean Prodution & Quality Management

5.3.1Importance of Quality

5.3.2Measuring & Identifying Quality

5.3.3Total Quality Management

5.3.4Evaluating Total Quality Management

5.3.5Case Study - Toyota Production System

5.4HL Only: Production Planning

5.4.1Capacity

5.4.2Productivity & Efficiency

5.4.3Technology & Efficiency

5.4.4Improving the Supply Chain

5.4.5Inventory

5.4.6Outsourcing

5.5HL Only: Research & Development

5.5.1Organisational Planning Tools

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