Organisational objectives 3 On completing this chapter you should be able to: Know and understand

in
 
different-sized packaging
Long term
Short to medium term
Difficult to reverse once made – departments 
will have committed resources to it
Reversible, but there may still be costs involved
Taken by directors and/or senior managers
Taken by less senior managers and 
subordinates with delegated authority
Cross-functional – will involve all major 
departments of the business
Impact of tactical decisions is often only 
on
one department
Table 1.3.2 
Key differences between tactical decisions and strategic decisions
strategy:
a long-term plan 
of action for the whole 
organisation, designed to 
achieve a particular goal
tactic:
short-term policy or 
decision aimed at resolving 
a particular problem or 
meeting a specific part of 
the overall strategy
Common corporate aims
Profit maximisation
Pro
fi
ts are essential for rewarding investors in a business and for 
fi
nancing further 
growth, and are necessary to persuade business owners and entrepreneurs to take risks. 
Pro
fi
t maximisation means producing at the level of output where the greatest positive 
di
ff
erence between total revenue and total costs is achieved – see 
Figure 1.3.4
.
It seems rational to seek the maximum pro
fi
t available from a given venture. Not to 
maximise pro
fi
t is seen as a missed opportunity, but there are limitations with this 
corporate objective:
ACTIVITY 1.3.2
CORPORATE AIMS OF DOMESTIC DETERGENTS INC.
•
To increase annual sales from $1 billion to $2 billion in five years
•
To enter a new market every 18–24 months
•
To achieve 30% of sales each year from products not in the company’s product line 
five years earlier