Chapter 1: Introduction to Business
o ORGANISATION: a ‘social arrangement which pursues collective goals, controls its own
performance and has a boundary separating it from its environment’.
Controlled performance – performance is measured and relevant action is taken.
boundary could be physical or social.
o MISSION: ‘generalised type of objective which is an expression of its reason of existence
(raison d’etre)
o MISSION STATEMENT: written communication of the mission to internal and external
stakeholders. Should contain: Purpose, Strategy, Policies and Values.
o OPERATIONS: quantitative operational goals. Objectives should be SMART – specific,
measurable achievable, relevant, timed
Primary Objectives: maximise shareholder wealth for profit orientated organisations.
Maximise the benefit to stakeholders of NFP organisations (the provision of goods and
services)
Secondary Objectives: innovation, productivity, corporate responsibility.
o In theory the primary objective of a profit orientated organisation should be to maximise
shareholder wealth. However, may choose: Profit (managers choosing satisfactory profits or
revenue maximisation.
o PLANS: state what should be done to achieve the operational objectives.
o STANDARD AND TARGETS: specify the desired level of performance – physical standard
cost standards and quality standards.
o STAKEHOLDER: a person or group of people who have a stake in the organisation.
Primary Stakeholders: shareholders or owners
Secondary Stakeholders: employees, management, customers, suppliers, government and the
environment.
o SUSTAINABILITY: the ability to meet the current needs without compromising the ability of
future generations to meet their needs.
o BUSINESS SUSTAINABILITY: considers how far a business goes to operate in a sustainable
way – part of their corporate responsibility.
o ORGANISATION: a ‘social arrangement which pursues collective goals, controls its own
performance and has a boundary separating it from its environment’.
Controlled performance – performance is measured and relevant action is taken.
boundary could be physical or social.
o MISSION: ‘generalised type of objective which is an expression of its reason of existence
(raison d’etre)
o MISSION STATEMENT: written communication of the mission to internal and external
stakeholders. Should contain: Purpose, Strategy, Policies and Values.
o OPERATIONS: quantitative operational goals. Objectives should be SMART – specific,
measurable achievable, relevant, timed
Primary Objectives: maximise shareholder wealth for profit orientated organisations.
Maximise the benefit to stakeholders of NFP organisations (the provision of goods and
services)
Secondary Objectives: innovation, productivity, corporate responsibility.
o In theory the primary objective of a profit orientated organisation should be to maximise
shareholder wealth. However, may choose: Profit (managers choosing satisfactory profits or
revenue maximisation.
o PLANS: state what should be done to achieve the operational objectives.
o STANDARD AND TARGETS: specify the desired level of performance – physical standard
cost standards and quality standards.
o STAKEHOLDER: a person or group of people who have a stake in the organisation.
Primary Stakeholders: shareholders or owners
Secondary Stakeholders: employees, management, customers, suppliers, government and the
environment.
o SUSTAINABILITY: the ability to meet the current needs without compromising the ability of
future generations to meet their needs.
o BUSINESS SUSTAINABILITY: considers how far a business goes to operate in a sustainable
way – part of their corporate responsibility.
