1. Corporate objectives

Question 1

what are business aims

Answer 1

These are the things the business wants to achieve in the long term — its purpose or reason for being.

Question 2

difference between business aim and business objectives

Answer 2

The aims of a business are less specific than its objectives and can be expressed as a vision

Question 3

define vision

Answer 3

a view of what the corporation wants to be like in the future

Question 4

define mission statement

Answer 4

a brief statement written by the business, describing its purpose and objectives, designed to cover its present operations

Question 5

4 examples of information that would be included in a mission statement

Answer 5

· the markets in which it operates

· what its key commercial objectives are

· in what way it values its stakeholders

· what its ethics involve (i.e. what it believes to be good or correct).

Question 6

explain the main elements of a mission

Answer 6

Purpose — a mission statement should outline why the business exists. It should communicate what the business does, for whom and why.

Values — businesses are likely to state the corporate values that they emotionally invest in. These might include qualities such as integrity, sustainability, innovation and quality. The values held by a corporation are likely to influence its culture

· Standards and behaviour — some mission statements may communicate a business’s commitment to high standards. For example, always conducting ethical behaviour (i.e. behaviour that is good or correct).

· Strategy — some mission statements may outline how the business will try to achieve its main objective. For example, a car manufacturer may say it is committed to the development of driverless cars to help achieve its aim of making transport as easy and convenient as possible.

Question 7

benefits of a good mission statement

Answer 7

1) A good mission statement should help guide the decision making of the firm. Running a business can be very complicated. It is very easy to get lost in the small details of business decision making. A good mission statement makes it clear which direction a business should take by reminding the owners and directors why the business exists.
2) Many people may argue that the only purpose of a business is to generate a profit for its owners. However, most employees would like to believe that they go to work to achieve something more than this, A mission statement makes this point.

Question 8

what are the two reasons why a business makes a mission statement

Answer 8

1) The first is to make a commitment to its customers. A mission statement expresses a promise to customers of what they can expect the business to aim for
2) a mission statement can be used to bring a company’s workforce (i.e. all the people who work for a company) together with a shared purpose. Many successful businesses have a mission statement that their employees believe in. This is why a mission statement is important in forming a strong corporate culture

Question 9

what are corporate objectives

Answer 9

the objectives of a medium to large-sized business as a whole

Question 10

who sets corporate objectives

Answer 10

Corporate objectives are objectives set by senior managers and directors for a company

Question 11

characteristics of corporate objectives

Answer 11

1) They should be specific to the company, its particular history and vision of the future
2) fit well with its mission statement
3) They should focus mainly on the desired performance and results of the business over time

Question 12

give examples of goals in corporate objectives

Answer 12

They may include goals such as

1) market share
2) profit levels
3) creation of new products or processes,
4) resource usage and scale economies,
5) management of people and ethical behaviours

Question 13

SMART objectives

Answer 13

• Specific means that the objective clearly states what the business is aiming to achieve. It should refer to a particular aspect or function of the business.
• Measurable involves evidence to demonstrate whether or not the objectives have actually been achieved. For this reason, most corporate objectives will have a financial or quantifiable element (i.e. an element that can be expressed by a number). This is because it makes it easier to measure the success of that objective,
• Agreed implies that everyone responsible for achieving the objective is happy with the objective and understands what it means for them. Without an objective being agreed by all those involved, there will be no motivation or commitment to achieve it.
• Realistic ensures that the objective can be met given the resources available and the current market conditions. If an objective is unrealistic, people may begin to ignore it. This means that the objective will not be achieved. This is likely to have a negative impact on the business.
• Time specific gives the stated time frame required to achieve the objectives. All objectives must have a deadline to ensure urgency and a point at which the objective can be assessed

Question 14

departmental and functional objectives

Answer 14

the objectives of a department within a business

Question 15

what do departmental and functional objectives include

Answer 15

These set the daily goals that may include human resources, finance, operations, logistics and marketing

Question 16

relationship of departmental objectives to the objectives hierachy

Answer 16

These all refer back up the hierarchy to the corporate objectives and mission statement, so that the goals and activities of the business are consistent. In this way, functional objectives will directly support the corporate objectives. Business functions should be aligned with one another because they are guided by these corporate objectives.

example - if the operations department sets a departmental objective to reduce waste by 25 per cent within the next year, it is likely that this will have to feed into the objectives set by the human resources (HR) department. HR will need to ensure all production workers complete a specific training programme focusing on quality management

Question 17

objectives hierachy

Answer 17

Question 18

objectives small businesses set

Answer 18

Small businesses may have a wide variety of objectives, such as the following examples:

1. to ensure that the company breaks even at the end
   of the tax year
2. to improve the firm’s liquidity in the next six months
3. to increase sales by 10 per cent over the next three years
4. to increase pre-tax profits by 5 per cent over the next 12 months
5. to hire five new staff with skills in sales and marketing and build a strong marketing department over the next year
6. to reduce energy consumption by 2 per cent and cut the use of non-recyclable packaging over the next three years.

Question 19

objectives large businesses set

Answer 19

the objectives of large firms and multinationals tend to be mostly financial. This is because they have many stakeholders to satisfy (mainly the shareholders).

example - a supermarket chain such as Carrefour’’’ might state an objective that covers its entire operation: `To increase market share by 5 per cent over the next two years

Question 20

why do large businesses set more financial objectives

Answer 20

Financial objectives are more objective and quantifiable. Therefore, they are easier to communicate to a wide variety of interested parties

Question 21

why should mission statements be constantly assessed

Answer 21

mission statements must be constantly assessed to ensure they have continued relevance for the business

Question 22

Limitations of mission statements

Answer 22

1. Some argue that mission statements are a little unrealistic and too optimistic - As a result, this may have a negative impact on employees. For example. employees may become demotivated because they know that the mission cannot be achieved. Also, unrealistic mission statements are not useful to anybody. Therefore, they are a waste of management time.
2. They may also be vague and appear insincere - which might cause stakeholders to see the statement as just a marketing tool or a slogan.
3. Sometimes, they are not appropriate - For example, a company with a mission statement that includes respect and honesty would not be supported if there were reports of fraud in a business
4. Many organisations may have a mission statement that is appealing to its customers - However, if it is not believed and followed by employees, then customers may soon lose faith in the business
5. Not achieving profits for shareholders - On any corporate website, you will find objectives relating to corporate social responsibility (CSR), ethical behaviours and sustainable business growth. However, businesses may need to consider the balance of the appeal of some of these objectives to their customers. This is especially true if the organisation is not achieving a profit for shareholders,

Question 23

questions to include in the critical reassesment of a mission statement

Answer 23

• What is the purpose of the mission statement?
• What audience is it intended for?
• How does the business strategy fit in with its stated mission?
• Are the aims and objectives realistic and achievable?