206- Aims and objectives Flashcards
Define aims
What the business wants to achieve in the future, they tend to be quite generic and broad. They set out goals for the business.
What is a vision statement?
A vision statement is a description of what a business sets out to achieve in the medium to long term.
Two benefits of having a vision statement
(+)help set objectives and support the business strategy
(+)Focus senior managers to achieve the vision
What are objectives?
More specific and measurable targets the business will set to achieve its aims
Most common aims and objectives of a business?
-Survival
-Profit maximisation
-Growth and gaining market share
-Increasing shareholder value
-Corporate social responsibility
SMART objectives
Specific - clear for what the business wants to achieve and for stakeholders
Measurable - measured to make sure they have been achieved (should be numerical)
Achievable - realistic, if not could be unmotivating
Realistic - are they likely to achieve the objectives with the resources available ?
Time limited or constrained - needs to be a timescale for achieving the objectives
Example of SMART objectives
growth - 015% a year for next five years by investing an additional £1m in advertising
Why are SMART objectives better? (Benefits of SMART objectives)
(+)More precise, quantifiable, therefore can be used more easily to monitor progress
(+)also enable feedback and learning within an organisation, so that management can monitor achievement and make changes where necessary
What is a mission statement?
A mission statement is a broad statement of its aims and values. It will guide the everyday operations and decision-making of the business.
What is the purpose of having a mission statement?
-everyone can be focused on the same goals and objectives
-Help with strategic planning
-Help customers understand the ethics and objectives of a company
-Gives transparency for investors/shareholders - they understand how their capital will be put to use
Evaluate mission statements, objectives and mission statements and their impact on a business and its stakeholders and 1 IDO
(+)Guide employees and managers
(+)customers will be indirectly affected if the goals in the mission statement are achieved
(-)vague and often express aspiration rather than reality and are often not achieved
(-)may only be of importance to internal stakeholders
(IDO)whether they are followed in all decisions and not just forgotten about
