BUSINESS OWNERSHIP AND OBJECTIVES.
Business objectives are vital, it is what a company will work for, a goal that needs to be achieved.
In order for objectives to be effective, they must:
- Provide detail about what specifically needs to be achieved.
- Have a time limit by when they need to have been achieved
- Need to state the required resources that they need in order to meet them.
Setting clear and realistic objectives will allow many employees to understand exactly what their job entails and achieving clearly stated objectives may be linked to bonus payments - this can act as an incentive for employees.
All businesses aim to do a few simple, most of these are crucial if they want to survive in their industry.
Please see diagram below:
Ernest Bader – Scott Bader’s founder believed that a business should do more than just make a profit; he believed that it should be founded on ethical principles, organised democratically and contribute to the good of the wider community.
Scott Bader Company Ltd’s main strategic objective is "To be a successful and sustainably profitable international enterprise, with its unique ownership structure providing an example to others". Scott Bader has a set of principles in its constitution in which all of the Scott Bader Commonwealth (all Scott Bader companies around the world and their workers) must abide by.
Ernest Bader – the founder of Scott Bader, lay down most of these principles and objectives. When he at first founded the company, for many years he sought after a different way of distributing the assets of the company in a less disruptive way and tried to find a way where all employees could have a 'real' say in the company. He believed that “labour should employ capital acknowledging the equality of everyone as individuals”, only his restructure of the way the industry was managed brought that about. In 1951 Scott Bader changed its structure of the company and shared out responsibility for its long-term future to its employees. He wanted to ensure that whenever staff benefited from advantages such as, profit and bonus’s they would share with those less fortunate. These principles state how Scott Bader works as a company across the world. Wherever their location, they all work to a common set of principles these are: -
- Care
- Equality [of opportunity]
- Ethics
- Involvement
- No discrimination
- Respect [Human Dignity]
- Service
The intentions of the founders of Scott Bader, was to create an influential company, its will being entrusted to those who work in it. It must be able to encourage a will to cooperate and help influence other people around the world to get rid of discrimination and waste – “making the world a better place to live”.
For Scott Bader to be sustainable they must maintain a reputation for honesty, integrity, service and quality in all their dealings. Each Scott Bader Company must work in a spirit of cooperation with colleagues, their local communities and with all the people that they do business with. They must ensure that they provide equality of opportunity by informing and training each other to help people meet their full potential and so to drive Scott Bader forward.
Taking responsibility; as individuals working at Scott Bader, they are supposed to accept their personal responsibility for their actions, recognising that all staff must be trusted – (so in doing this they will avoid conflicts between staff members) and to constantly seek improved knowledge and skills. As an organisation as a whole, each company must behave in a caring and moral way and to try and work together to grow mutual long-term relationships based on honesty. The managers have a special responsibility to make the individuals work together and also ensure open discussion and reporting at all times.
Working for a better society. Scott Bader’s workers must influence and do good in the community themselves, they must care about those who rely on them (such as charities and needy projects around the world, in less fortunate places) and the dignity of all people. Any sort of discrimination, of race, age or religion or gender is not at all tolerated.
Most companies aim to profit maximise in theory, but in the real world firms want to break even and just survive as a business and don’t want to waste the time and effort needed to gain maximum profit – Scott Bader use time to make their products of high quality and efficient they try as hard as possible to get customer satisfaction but they do not profit maximise as they proportion their profit so to benefit those less fortunate than them. As a sustainable and caring company they try to set an example to others and support staff in community activities.
Self-Governance; Scott Bader encourages personal responsibility and try to keep all staff informed and consulted on matters affecting their day-to-day working lives/problems, and to commit to working in the best interests of the company.
These principles are an important matter for Scott Bader, they need to be used and abided by every working day.
Problems must arise with these principles; Scott Bader can set an example to be less discriminative but you can’t change people views and cultures the influencing may not work however, it does give Scott Bader a good and honest reputation which will help them in all aspects of their business.
I think these principles give a huge incentive to their employees to work hard, this is probably why the company is probably so sustainable, it makes them feel worthy and that their input does matter on all issues and affairs. Therefore I think these principles are a good set of principles to have if followed properly. People will think before acting and therefore the company and the people working for it produce a good yet honest image, to the outside world making it an influencing company.
The objective of every company is to profit maximise. Scott Bader need to aim to get as much profit as possible but they do not profit maximise as that the money that they earn will come back into the business for research and development so to improve products and production with new innovation etc. Scott Bader would have to try and profit maximise to a very large extent for the reason that it uses its profits in a very different way to other companies; this is because of their objectives and principles to help those lees fortunate than them.
- Only a maximum of 60% of all the profit made can be kept for the business used for research and development and innovation. (Although they have voted to change this to 95%, we could say well that’s not fair on the charities if thy only receive 5% but you can argue that at least they do give money to charity.)
- Of the 40% left of the profit, a maximum 20% is allowed to be paid into the employees wags as bonuses, but an equal 20% or a greater amount is given to charity.
Using their profits in this way has meant that Scott Bader has given a huge amount of money over the years to charities and projects such as, the provision of water to rural villages in Africa and India, health care clinics in South America and many projects for the homeless in the UK. (Pictures: below)
Voluntary organisations can apply to Scott Bader for grants. Scott Bader’s areas of focus for this year are:
- In the UK - child and youth projects
- Overseas - any project that helps the most marginalised to become self sufficient
There are benefits and constraints to the proportional profit idea.
Another disadvantage is that if they need to downsize and get rid of workers it would be against their principles of help the well being of their employees and make a good example to others, to do so, therefore they could be in a bit of a muddle.
Another of Scott Bader’s objectives is that, “Scott Bader has been founded on the belief that a socially responsible undertaking cannot exist merely with its own interests. It is part of the whole national and international community and, as such, it has responsibilities, which extend far beyond the factory walls.” Scott Bader also states that, it is for each generation to understand these responsibilities in it’s own way, according to existing situations and changing needs.
On Scott Bader’s website they talk about the community activity that they get involved in (as before in the principles); they work within a mutually supporting community they believe that as individuals they have a responsibility to participate in their local communities to serve those who most need. Some examples of these involvements are below:
In the future Scott Bader want to use all of their technological developments as a part of their mission to find the most “environmentally acceptable solutions” for their customers. They want to produce products that are either water based or solid, or use significantly reduced levels of solvent. In all cases they want to produce products that are safer and more pleasant to work with.
Different businesses have different objectives but the main ones that most businesses aim to achieve are:
- Making a profit (surplus)
Profit is important to companies because it affects a lot of people; shareholders and their return on investments also known as dividends, the owner of the company so he can improve his lifestyle/earnings, directors for bonus’s and fringe benefits, employees if the company is doing well not only does this mean they may receive a pay rise of a bonus it also means their job is secure. Profit is important to the government because it will mean businesses taxes will increase they will receive more income tax and would have too pay out less unemployment benefits paid. Consumers will like to know how a business is going they feel if a company is doing well they will have better quality, choice and price. Suppliers want to know because they need to know if the company can afford to pay them if they cant they can refuse to trade credit with that customer again. In economic terms if a company is doing well this can help regional economies and make business multipliers as people with jobs have money to spend elsewhere. This is important to Scott Bader, although they cannot compete on price as their company is smaller than other worldwide organisations they can compete on quality which has cost issues, they also need to make surplus to help their future investment this year Scott Bader has a huge investment program – they want to build an infrastructure that will help them to become more flexible and to have the ability to respond faster to a change in customer needs.
- Increasing sales or market share
Linked to profitability this means the total market share in terms of sale and turnover. Larger market share enhances the company’s image promotions and branding. It gives them a stronger competitive position and attracts inward investment such as shareholders and the bank will feel more secure for lending loans. This is helped by making a profit above they must make a supernormal profit so that they can cover all of their costs and have money to invest in the business. High quality products and good customer relations help Scott Bader to increase their sales and increase market shares into other countries to become more globalised.
Scott Bader survive well – they have moral and honourable principles which helps them to stick out in the market, customers feel as though they are helping others when buying their products also the high quality of the products means good customer satisfaction and consumer surplus they will keep coming back.
- Providing services to the community
Scott Bader feel that they should work within a mutually supporting community they believe that as individuals they have a responsibility to participate in their local communities to serve those who most need. This is talked about more on page 5.
- Offering charitable or non-profit services, such as caring for the environment
Scott Bader try to make their products as safe as possible to the environment by making products water-based. At the moment they are looking to improve productivity further their long-term eye is on environmental issues. Scott Bader gives a percent of it’s profits to charities using their profits in this way has meant that Scott Bader has given a huge amount of money over the years to charities and projects such as, the provision of water to rural villages in Africa and India, health care clinics in South America and many projects for the homeless in the UK.
It is important to Scott Bader to have their staff working at their optimum level so that all aspects of the business are done to the highest standard possible.
- Producing high quality products and services.
This is fundamental for Scott Bader Ltd. They cannot compete by means of price for the reason that they are a small company within their industry, this means it is imperative that their quality of the products is up to its optimum level, and that customer relations, respect and the companies reputation is upheld so that customers will take them seriously and if they’re happy with the service gain customer loyalty. They also need to get high customer satisfaction so to create relationships and make partnerships with other companies so that they can gain regular sales revenue.
Different departments would be involved in meeting these objectives and would probably have a few of their own.
The production department is vital as the products they make are technically in control of the whole businesses success; this keeps the customers coming back to a business. This means producing new innovative goods, good quality and a range of goods for consumer choice. Scott Bader’s passion for the industry has meant that they do constantly change and improve their range, including the introduction of two new resins that no company in Europe manufacturer.
The employees of Scott Bader are vital to the delivery of their business objectives. It is the skills and passion of their staff, which guarantee success. This is seen to by total quality management they try to stop errors and waste from occurring at all levels within the organisation, and to try to encourage all employees to make ‘quality’ vital within all their daily activities (whether in production, marketing or personnel). Internal relationships between workers and their managers are seen to be as important as the external relationships that exist between the business and its customers and suppliers. Total Quality Management must be seen to be a course of action that is followed by, and has the commitment of, all workers, from senior management to factory workers. The business must monitor all its activities and processes in order to identify any areas for improvement and to ensure that quality is being achieved. Team-working is important, since a group of people working together will develop a wider range of skills, co-operation, and higher motivation than if workers were performing repetitive tasks on their own. Regular market research must be undertaken to ensure that customers are happy with the level of service that they receive (any complaints can be used to improve the existing systems).
This is the ultimate objective for a business is, to produce every product with no defects, therefore eliminating waste and the time taken to correct mistakes. Zero defects can lead to an improved business and customer reputation, as well as increasing levels of both sales and profitability. In order for the objective of zero defects to be achieved, it requires the involvement of every employee in the business, making sure that they are all committed and suitably trained. Staff at Scott Bader needs to be specifically trained if the managers want them to do a good and efficient job. To make Scott Bader more efficient and successful they need to train and develop the staffs skills, improve their knowledge about the product and what happens to it when it has been made, this acts as an incentive as the employees feel as though they do an important and worthy job and it also improves consumer satisfaction because the employee will do his/her job well with the training in place. Scott Bader claim that they have never had a batch sent back proving that they feel quality is a vital aspect of there company’s success.
The main objectives in which Scott Bader wanted to meet were, "To be a successful and sustainably profitable international enterprise, with its unique ownership structure providing an example to others", Profit maximisation, increase market share, diversification, to become more environmental/ecological friendly, help charity, produce safer products, care. Equality, service, and take a part in the community.
Scott Bader have been successful and sustainable by keeping customers, suppliers and staff satisfied part of Scott Bader’s principles help the company to run smoothly the principles in which they have to abide by help Scott Bader to meet the objectives of care, equality, service because staff have to take an active part in the community which is proven to have been met shown previously on page 8.
Scott Bader have profit maximised although if they were larger and increased there market share more they would benefit from economies of scale which would reduce their costs and mean profits would increase. Scott Bader produces a limited variety of goods although they do work in a range of markets from Marines, Land Transport, Building and Construction, Pipes and Pipe Lining, to Decorative Casting, this has meant they have diversified which means risk is spread and increased market share means they can have more control over price and will help them to establish new products in the future.
Scott Bader has never had a batch of their products sent back to them ever before proving that they meet the service that their customers want.
Scott Bader have not completely met the target of producing environmentally acceptable solutions although they re trying to rectify this and have planned for it because in the future Scott Bader want to use all of their technological developments as a part of their mission to find the most “environmentally acceptable solutions” for their customers. They want to produce products that are either water based or solid, or use significantly reduced levels of solvent. In all cases they want to produce products that are safer and more pleasant to work with.
I think therefore that Scott Bader set targets and try their best to meet them they take care over meeting short term, mid term and long term objectives so that the business can run smoothly and they can act straight away on a situation which arises.
