3. The purposes of a business

Question 1

What should a successful mission contain, according to the Ashridge College model?

Answer 1

Purpose - Why do they exist?
Strategy - What gives them competitive advantage?
Policies
Values

Question 1

What is an organization’s mission statement?

Answer 1

A written communication of an organization’s mission to internal and external stakeholders

Question 2

What are the advantages of a mission statement?

Answer 2

Help resolve stakeholder conflict
Formulate strategy
Communicate the values and direction of the organisation

Question 3

What are the disadvantages of a mission statement?

Answer 3

Often ignored by managers
Often considered to just be a public relations exercise
Often full of meaningless terms which give staff little idea on what to aim for

Question 4

Objectives should be SMART, what does this stand for?

Answer 4

Specific
Measurable
Attainable
Relevant
Timed

Question 5

Primary objectives for profit making entities

Answer 5

Maximise shareholder wealth

Question 6

Primary objectives for Not-For-Profit organisations?

Answer 6

Maximise the benefit to target stakeholders

Question 7

What are the issues for Not-For-Profit organisations?

Answer 7

Often have multiple objectives
Difficulty in measuring objectives
Stakeholder conflicts due to wider range of stakeholders
Financial constraints

Question 8

What can Mendelows matrix be used for?

Answer 8

To analyse stakeholders and how to manage them

Low interest/ Low power: minimal effort

High interest/ Low power: keep informed

Low interest/ High power: keep satisfied

High interest/ High power: key players