Essay
BTEC Business Level 3 Unit 1 P4 – Explain how their style of organisation helps them to fulfil their purposes
- Module
- Unit 1 P4
- Institution
- University College London (UCL)
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BTEC Level 3 National Business Studies | Unit 1 – The Business Environment |P4 – Explain how their style of organisation helps them to fulfil their purposes
P4 – Explain how their style of organisation helps them to fulfil their
purposes
Strategic Aims
Strategic aims include large goals you want to reach through your strategies.
These can include things such as gaining a majority of market share, reaching a
productivity rate of 90 percent of capacity or owning your facilities instead of
renting them. These large goals take time to reach and will strategically position
your small business to maintain growth and profitability.
Strategic Objectives
Your small-business strategic objectives detail the small steps to your aims.
These small steps become your strategy for reaching your larger aims. For
example, if your goal is to capture a majority of market share, your objectives
might be: reducing prices while maintaining a reasonable profit margin, offering
discounts to customers who switch to your products and advertising the greater
benefits of your product. When you reach these strategic objectives, you may
find yourself closer to your aim of capturing a majority of market share.
Benefits of mission statements
Mission statements encourages team work. This allows them to determine key
goals that are essential to the functioning of the business. Mission statements
are important for allowing managers to find out whether the business is
achieving its full potential. The objectives in a mission statement assists in
generating a positive outlook for whichever business that an organisation wants
to undertake.
Benefits of having Aims and Objectives
By setting aims and objectives, companies give themselves a sense of purpose
and direction. A company can set particular targets and monitor its progress
towards reaching them. The purpose of setting aims and objectives is also known
to help the managers manage the business. This could help them to get the
maximum workout in the period of time, so he/she knows what he wants at the
end of the day or the year. This will enable discussions to meet the objectives
and will make all the workers to work within the organisation more than their
ability.
Another purpose of setting aims and objectives is to measure the performance,
for example, how much profit they have made in the last year, so they know that
they are doing better or worse than last year. They will provide information to
those who are interested, which will lead to encourage them to do better.
NatWest
What are the aims?
NatWest aims to maintain an appropriate level of capital in each legal entity to
meet its business needs and regulatory requirements. And also to operate with
an agreed risk appetite.
The appropriate level of capital is determined based on their main aims which is
meeting minimum regulatory capital requirements and ensuring the group
maintains sufficient capital to uphold customer, investor and rating agency
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,BTEC Level 3 National Business Studies | Unit 1 – The Business Environment |
P4 – Explain how their style of organisation helps them to fulfil their purposes
confidence in the organisation therefore supporting the business and funding
capacity.
Based on these aims of determination which is continually reassessed, NatWest
aims to maintain capital adequacy.
By serving customers well, NatWest aims to be trusted, respected and valued
which is a role model of how banks should serve society.
What are the objectives?
NatWest’s strategic objectives aims to strike an optimal balance between
building a sustainable risk profile and creating long-term value for the customers,
investors and wider stakeholders.
The main objectives of NatWest since the reform in 2009 includes:
Maintaining capital adequacy. To ensure that NatWest has sufficient capital
resources to meet regulatory requirements and to cover the potential for
unexpected losses in its asset portfolio.
Deliver stable earnings growth. To ensure that strategic growth is based
around a longer term risk versus reward consideration.
Ensure stable and efficient access to funding and liquidity. To ensure that
NatWest has sufficient funding to meet its obligations, taking account of the
constraint that some forms of funding may not be available when they are most
needed.
Maintain stakeholder confidence. To ensure that stakeholders have
confidence in the organisation’s recovery plan, its ability to deliver its strategic
objectives and the effectiveness of its business culture and operational controls.
NatWest’s Customer Charter which also contains some of the aims and
objectives:
“We put our customers' needs first
- We will listen and then help you find solutions that meet your needs
We make banking easier
- We will help you bank with us in the simplest and most convenient way
We are there whenever you need help
- We will take personal responsibility when you need support from us
We are fair and honest
- We will explain the features and pricing of our products clearly and simply”
NatWest’s Mission statement: “To deliver superior sustainable value we run our
business with integrity and openness, delivering optimum financial results within
clearly defined business principles.”
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,BTEC Level 3 National Business Studies | Unit 1 – The Business Environment |
P4 – Explain how their style of organisation helps them to fulfil their purposes
The decision for NatWest to have this mission statement is because NatWest
aims to be the number one National bank in the Great Britain. Their mission
statement contains the word ‘superior’ simply meaning higher in rank, status or
quality. This shows that NatWest care about the quality of service they bring to
their clients. Also the word shows that NatWest wants to be the best banking
service provider in the nation.
One of NatWest’s objectives is to constantly execute a risk assessment during
service. This is to identify any risks otherwise NatWest would have a bad
reputation in terms of profit loss and bad customer service. This objective links to
their mission statement which is to ‘deliver sustainable value’, the word
sustainable simply means something to be maintained at a certain rate or level.
Without risk assessments NatWest would not be able to identify the issues with
any current services or future services so this mission statement is highly
beneficial as an aim of the objective to keep the structure of the organisation
maintained.
The term ‘Integrity’ used in the mission statement shows that NatWest aim is to
be honest and have strong moral principles which links to the customer charter
of NatWest “We are fair and honest- We will explain the features and pricing
of our products clearly and simply”. This shows that NatWest has integrity
towards their customers in terms of being honest about their products and have
it explained simply and clearly in their policies.
Strategic aims and objectives developed through their mission statement. The
mission statement is used to communicate with stake holders. Mission
statements will outline the overall reasons for the organisation’s existence.
An objective starts from the Board of Directors and cascades all the way down to
the functional elements of NatWest.
One of the objectives is Maintaining capital adequacy. This cascades through
all the departments, however every department has a different approach to this
objective. For instance the financial departments approach to this objective is for
the business to have extra capital in the form of money whatever the
circumstances. So the financial department wants the goal of having more profits
in case of any losses so the bank could afford to be bailed out. Their goal can
only be achieved by cascading this objective to other departments.
NatWest provide an annual bonus for its management and many employees. This
is another way it can cascade objectives through the company. Typically, the
bonuses are based on attainment of revenue and profit targets (since these
usually affect the total performance of the company) but they may also have
bonus components based on specific goals or initiatives of the companies (these
will typically be related to corporate objectives). So, the company can manage
motivation and behaviour expectation by using the annual bonus as a final way
to cascade objectives to the employees.
The strategic planning process of NatWest includes listening to their customers,
creating stronger foundations, a stronger platform, making customers first and
taxpayers. The main strategic process is to gain their trust.
3
, BTEC Level 3 National Business Studies | Unit 1 – The Business Environment |
P4 – Explain how their style of organisation helps them to fulfil their purposes
A popular way of setting goals is using a SMART model. Using this approach will
help ensure that objectives are clearly understood and are more likely to be
successfully achieved:
Specific. Objectives should specify exactly what the individual should be
able to achieve. There should be no vague or ambiguous language.
Measurable. It should be possible to measure objectively the extent to
which objectives have been met.
Achievable. People should be able to achieve their objectives. Setting
unrealistic targets demotivates. However, this does not mean that they
should be too easy; they should be challenging and stimulating.
Relevant. Objectives should have a clear purpose and benefit
Time-bound. People should know how long they have to complete their
objectives and what the deadlines are.
An example of how SMART objectives is used in NatWest, a table is set below:
NatWest/Department Objective How will this be measured
Business Plan Link
Develop and maintain a To ensure that stakeholders By applying a risk strategic
resourced and market have objective called the ‘Risk
confidence in the NatWest’s Appetite’ which is the fourth
informed portfolio that meets
recovery plan, its ability to strategic risk objective
stakeholder needs of maintaining stakeholder
deliver its confidence covers qualitative
strategic objectives and the aspects
effectiveness of its business relating to the culture of risk
culture and management and controls and
Operational controls. meeting
stakeholder expectations.
Develop a culture of all staff We put our customers' needs By having a customer
taking personal responsibility first satisfaction survey after every
for customer satisfaction time a customer uses
NatWest’s service such as
telephone calls and online
banking.
Ensure all departments have Each programme can Having communication with
links with employers or demonstrate employer the procurement team where
relevant organisations that engagement in design, there would be prospects of
enhance programme design, approval, delivery or future improvement of the
delivery and the future monitoring businesses profit margins and
success prospects of the assets.
business
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