1 - Business Objectives

Question 1

Why Do Businesses Set Objectives?
(5 Points)

Answer 1

~ Common sense of purpose.

~ Motivate employees.

~ Create reward system.

~ Measure and review performance.

~ Inform decisions to improve performance.

Question 2

What Are The 6
Business Objectives?

Answer 2

~ Profit.

~ Growth.

~ Survival.

~ Cash flow.

~ Social.

~ Ethical.

Question 3

Define The Acronym SMART

Answer 3

S - Specific
M - Measurable
A - Achievable
R - Relevant
T - Timely

Question 4

What Is A Mission Statement?

Answer 4

Is a written statement, stating the purpose of an organisation so that stakeholders understand its intent.

Question 5

What Are Other Names For The Mission Statement?
(4 Points)

Answer 5

~ Aims.

~ Corporate aims.

~ Values.

~ Vision.

Question 6

What Is The Layer Below The Mission Statement?

Answer 6

Corporate objectives.

Question 7

What Are Corporate Objectives?
(3 Points)

Answer 7

~ Define the overall objectives of the business in the short to medium term.

~ Is driven by the mission statement.

~ Drives the functional objectives.

Question 8

What Is Strategy?

Answer 8

Long term objectives, how to strategise for the future.

Question 9

What Are Examples Of Corporate Objectives?
(4 Points)

Answer 9

~ Profit max.

~ Revenue max.

~ Growth.

~ Survival.

Question 10

What Are Corporate Objectives Likely To Be Written In The Format Of?

Answer 10

SMART.

Question 11

What Are Functional Objectives?
(4 Points)

Answer 11

~ Define the objectives of each department of a business.

~ More detail than at a corporate level due to its specific focus.

~ Driven by corporate objectives.

~ Can be called departmental objectives.

Question 12

What Are Functional Objectives Likely To Be Written In The Format Of?

Answer 12

SMART.

Question 13

What Is Revenue?
(2 Points)

Answer 13

~ Total made from sales.

~ Also referred to as turnover.

Question 14

What Are Fixed Costs & What Is An Example?
(2 Points)

Answer 14

~ Costs that do not vary with output.

~ Rent is an example.

Question 15

What Are Variable Costs & What Is An Example?
(2 Points)

Answer 15

~ Costs that do vary with output.

~ Raw materials is an example.

Question 16

How Do You Calculate Profit?

Answer 16

Revenue - Costs

Question 17

How Do You Calculate Revenue?

Answer 17

Sales x Price

Question 18

How Do You Calculate Total Costs?

Answer 18

Fixed Costs + Variable Costs

Question 19

How Do You Calculate Variable Costs?

Answer 19

Variable Costs Per Unit x Units Produced

Question 20

What Is The Importance Of Profit?
(6 Points)

Answer 20

~ It’s a source of finance.

~ There is a reward for taking risks.

~ Can be used to service the mission in the case of non-for-profit businesses.

~ Motivates employees.

~ Sign of financial stability to others. E.g. Suppliers.

~ Indicator of success.