1.5.3 : Business Objectives Flashcards
What are the main functions of a business objective ?
A clear statement of what needs to be achieved , a focus for all activity , targets for individual and group achievement , a means of measuring performance
How can objectives be used in a business ?
Implement the mission , provide a clear focus for decision making , provide a target , motivate employees , deuce uncertainties
What is a mission and what is an aim ?
Mission - a qualitative statement of the businesses’ aims
Aims - a long term plan rom which business objectives are derived
What are the two types of objectives ?
Corporate objectives + functional objectives
What are some examples of the relationship between corporate and functional objectives ?
CO = increase sales - so - FO = successfully launch five new products in the next two years (marketing)
CO = reduce costs - so - FO = increase factory productivity by 10%
What hours objectives be ?
S - specific
M - measurable
A - achievable
R - relevant
T - time-bound
What are some of the factors that affect business objectives ?
Age of the business
Size and legal status
Ownership
Market conditions
Legislation
State of the economy
Competition
Political factors
Social attitudes
What are strategical objectives ?
Focused on long-term
Set by the board
Involve higher risk
Difficult to change in the short term
Challenging
What are tactical objectives ?
Focused on short-term
Set by line management
Relatively low-risk
Limited resources invested
Realistic and achievable
What is a mission statement ?
The overriding goal of the business
The reason for its experience
A strategic perspective
A vision for the future
What makes a good mission statement ?
Contains a formulation of objectives that enables progress towards them to be measured
Differentiates the business from its competitors
Defines the markets or businesses in which the firm wants to operate
Motivation
What are the criticisms of a mission statement ?
Not always supported by the action of a business
Often too vague and general
Often merely statements of the obvious
Sometimes not a reflection of reality
What are objectives relating to revenue ?
Revenue growth
Sales maximisation
Market share
What are objectives relating to revenue ?
Revenue growth
Sales maximisation
Market share
What is the aim of cost efficiency ?
Aims to achieve he most cost effective way of delivering olds and services
