1.3 - Business Objectives Flashcards
what is a mission statement
a statement that outlines the overall purpose of a business and what it is trying to achieve
(tend to be more specific and detailed than vision statements)
what is a vision statement
a statement that outlines the aspirations of a business for the future
(tend to be more general and hypothetical than mission statements)
pros/cons of haing a mission/vision statement
pros
* gives a business direction and guidance (with decision making and behaviour of staff)
* builds brand image
* motivates employees
cons
* it can be too vague or general
* could be seen as just public relations
* the time and the cost that is involved in creating them
what is an objective within a business
how should they be structured?
an objective is a measurable goal or target that is created by a business to be completed within a set period of time
SMART
S - specific
M - measurable
A - agreed
R - realistic
T - time-specific
pros/cons of a business having an objective
pros
* may be motivating - provides a sense of direction
* motivating - sets something that employees can work towards
cons
* demotivating - if the person who set them does not believe in them themselves
(eg. if employees know that there are insufficient funds to complete objectives)
what are examples of objectives within businesses in the private sector
Growth
* in revenue, profit, market share, assets and more
Profit
* maximising difference between revenue and costs
Survival
* small businesses may strive to survive in a competitive market
Cash Flow
* aim to improve cash flow
Diversification
* create new products - reduce risk of product failing
Protecting Shareholder Value
* shareholders want high share price + dividends
Ethical Objectives
* high moral guidlines
types of objectives and descriptions
strategic objectives
* long-term aims and goals of a business
* long-term strategies put into place to achieve these objectives
tactical objectives
* short-term aims and goals of a business - often only include part of the business
(corporate objective
* a target that is set for the business as a whole
functional objective
* a target for one of the functions of the business - such as marketing, finance, operations management or human resource management)
labour productivity definition
measure of the output per time period of an employee
what are examples of objectives of businesses in the public sector
providing a service to the community
financial objectives
* cover operating costs to not drain government funds
development in poor regions
* try to raise living standards
ethical objectives
* well recieved by stakeholders
what is corporate social responsibility
(CSR)
an approach under which businesses consider the interests of all groups in society as a central factor of decision making, not only focusing on profit
“a socially responsible business wants to leave the world a better place than when it started up”
what is the triple bottom line model (TBL)
3 sections - people, planet and profit
a model which recognises people, planet and profit factors that contribute to a sustainable business. with a balance of these three, a business may be considered sustainable.
- profit (economic)
- people (social)
- planet (environmental)
pros/cons of CSR (corporate social responsibility)
pros
* improved brand image
* differentiating from competitors
* attracting and motivating employees
* less bad publicity (good brand image)
cons
* increased costs
* lower profits in short run
* individuals could see through it as a marketing attempt, could lead to reduced consumers
what are some factors that may affect objectives within a business (internal/external)
internal
* change in management
* change in ownership
external
* economic factors
* social factors
* market factors
define ethical behaviour
behaviour that is thought to be morally correct, not necessarily the most profitable
