1.5.3 Business Objectives

Question 1

Mission statement

Answer 1

• overriding goal of the business
• reason for its existence
• strategic perspective
• vision for future

Question 2

A good mission statement …

Answer 2

• excites, inspires, motivates and guides
• differentiates (from competitors)
• defines market/business (where want to operate)
• relevant to all major stakeholders
• relevant to objectives = measure progress

Question 3

Mission

Answer 3

Qualitative statement of the business’s aims

Question 4

Aim

Answer 4

long term goal from which business objective are derived

e.g. maximise profits

Question 5

Objective

Answer 5

• time assigned target
• from goals
• set in advance of strategy

E.g. break even by end of 2017

Question 6

S.M.A.R.T

Answer 6

Specific 
Measurable 
Achievable 
Relevant 
Time bound 

All business objectives should be SMART

Question 7

Purpose of objectives:

Answer 7

1. direction/ focus
2. future target = motivate/reward = unity
3. measuring performance
4. focus = decision making
5. motivates employees
6. reduce uncertainty

Question 8

Factors influencing objectives:

Answer 8

1. views of owners and mangers
2. market conditions
3. ownership of business
4. finance/capital available
5. age and scale/size of business

Question 9

Hierarchy of objectives in business

Answer 9

1. Mission
2. Corporate/Strategic
3. Functional
4. Team
5. Individual

5-1 = increasingly strategic (perceptive/future orientated) 
1-5= increasingly detailed

Question 10

Functions of a business

Answer 10

1. HR -people
2. Operations -process/manufacture
3. Finance - capital
4. Marketing - 4Ps.

Question 11

4 Ps in marketing

Answer 11

Product
Price
Place
Promotion

Question 12

Corporate objective

Answer 12

Overall business targets

Translate down to each department or function

Question 13

Functional objectives

Answer 13

More specific objectives that feed in to corporate objectives
E.g.s
HR: plan for training &financial incentives
Operations: oversee quality
Finance: monitors spending & controls costs
Marketing: advises on consumer trends

Question 14

Common business objectives

Answer 14

• survival
• profit & sales maximisation
• market share
• cost efficiency
• employee welfare
• customer satisfaction
• social objectives