1.3

Question 1

vision statement

Answer 1

inspiring or aspirational declaration of what an organization ultimately strives to be, or wants to achieve, in the distant future

Question 2

Criticisms of vision and mission statements

Answer 2

• Being too vague
• Vision statements (and many mission statements) are very long term

Question 3

mission statement

Answer 3

motivating declaration of an organization’s core purpose (why it exists), identity (who they are) and focus (what they do)

more specific than vision statement

Question 4

business objectives

Answer 4

SMART
* Specific
* Measurable
* Achievable
* Realistic
* Time specific

strategic objective (long term)
targets that the whole organization is striving to achieve

tactical objective (short term)
specific targets with definitive timelines

4 common business objectives:
1. growth
2. profit
3. protecting shareholder value
4. ethical objectives

Question 5

growth

Answer 5

increase in the size of a business and its operations

benefits:
* Higher sales revenue and profit
* Economies of scale
* Reduced risks ( less vulnerable to changes due to external environment such as economy recession)

internal growth:
* organization expands without the help of an external partner firm
* uses its own resources, e.g. use profit to invest in opening new branch

external groeth:
* expansion using third party resources

Methods of measuring the growth of a business:
1. sales revenue (per time period)
2. sales volume (per time period)

benefits of business growth:
* economies of scale
* attract investors

Question 6

profit

Answer 6

positive difference between a firm’s sales revenue and its total costs of production, per time period

reasons profit as business objective:
1. reward for the owners and investors
2. internal source of finance in the future

enables business to grow without relying on external sources of finance

Question 7

protecting shareholder value

Answer 7

safeguarding the interests of the owners of a limited liability company

responsibility of the CEO and board of directors

Question 8

Ethical objectives

Answer 8

Examples of ethical objectives:
* improving the overall wellbeing of workers
* adopting green technologies

Examples of unethical business practices:
* the exploitation of stakeholders
* exploitation of the natural environmental

advantages of ethical business objectives:
* improved corporate image
* Higher sales revenue
* Increased customer loyalty
* Avoiding fines and penalties

Limitations of ethical business objectives:
* Compliance costs
* Lower profits

Question 9

strategic objectives

Answer 9

• long-term goals
• responsibility of executive directors

Question 10

Tactical objectives

Answer 10

• short term and specific goals
• definitive timelines
• specific functional areas of an organisation (HR, marketing, finance and account, operation management)
• less than a year

Question 11

strategies

Answer 11

• actions required to achieve the long term objectives of an organization
• e.g. diversification, merges
• decided by senior leadership team/board of directors

Question 12

tactics

Answer 12

• actions required to achieve the short term objectives of an organizations
• methods used by an organization to meet specific and measurable goals

Question 13

CSR

Answer 13

• value, decisions, and actions taken by a business that impact society in a positive way

advantages:
* positive corporate image
* customer loyalty
* improve staff motivation

limitations:
* Compliance costs
* can cause stakeholder conflict

role and nature of corporate social responsibility:
* have a positive impact on their triple bottom line (ecological, social, economic sustainability)