3.1.1 Corporate objectives

Question 1

order for process

Answer 1

1. mission statement
2. business aims
3. business objs
4. business strategy

Question 2

mission statement

Answer 2

qualitative statement of business’s aims

vision for the future
what company does and how it does it and why

over riding goal, reasons for business existence

Question 3

aim

Answer 3

LT plan business obj are derived

Question 4

SMART

Answer 4

Specific 
Measurable 
Achievable 
Realistic 
Time bound

Question 5

common business objectives

Answer 5

1. satisficing
2. survival
3. profit and sales maximisation
4. market share
5. cost efficiency
6. social objs
7. customer satisfaction
8. employee welfare

Question 6

order for objectives

Answer 6

corporate obj – functional obj – unit obj

Question 7

why do objectives change

Answer 7

1. economic changes - forecasts change
2. met obj = change (break even - profit max)
3. competitive structure may change (perfect competition)
4. business size/legal structure changes (flotation/inorganic growth)

Question 8

perfect competition

Answer 8

occurs when all companies sell identical products, market share does not influence price

Question 9

internal influences on business objs

Answer 9

• age of business
• ownership (views of owners/managers)
• legislation
• market conditions

Question 10

external influences on business objs

Answer 10

• state of economy
• competition
• risk/attitude to risk
• corporate culture
• political factors
• social attitudes

Question 11

stakeholders and influence of mission statement

Answer 11

employees (welfare, bring it to life, know their roe, motivational)

customers (show values, communicate stance)

society (convey brand image/reputation)

investors (help decide whether to invest = long term)

Question 12

purpose/features of a good mission statement

Answer 12

1. clear sense of business purpose
2. excite/inspire/motivate/guide
3. easy to understand/remember
4. differentiate business from competitors
5. for all stakeholders/not just shareholders/managers

Question 13

criticisms of mission statement

Answer 13

could just be paying lip service
not always supported by business actions
too vague/general
merely statements of obvious
just PR?
regarded cynically by staff
effective = everyone in business has to ‘buy in’

Question 14

issues with mission statements

Answer 14

1. not always supported by business actions
2. often too vague/general
3. often merely statement of obvious
4. just PR? paying lip service?
5. sometimes regarded cynically by staff
6. effective = everyone in business = “buy in”

Question 15

order of pyramid

Answer 15

mission
corp obj/aims (company)
functional obj (department)
strategy (how, 4 models to develop Strat)

Question 16

mission statement affected by

Answer 16

external influences (outside of business control)

1. economy
2. legislation
3. competitors