3.1.1 Corporate Objectives

Question 1

What is a Mission statement

Answer 1

• A mission statement is a qualitative statement of an organisations aims

• A mission statement is a short way of a business expressing their main intent

Question 2

Criticisms of mission statement?

Answer 2

Critics say that mission statements are just a public relations tool

Question 3

What does a mission statement do?

Answer 3

• A mission statement sets out the purpose and primary objectives of a business in the present.
• A mission statement should be memorable
• A mission statement should be inspiring
• A corporate vision looks towards the future and where the business would like to be

Question 4

Corporate objectives

Answer 4

• Corporate objectives should flow from the mission statement and corporate vision
• Usually set by senior management for the whole company
• Aimed at satisfying the shareholders so may be related to profit or dividends:
• Increase operating profit 4% over the next 24 months
• Increase dividends by 2% over the next three years

Question 5

What are SMART objectives

Answer 5

• Specific; This means there must be a clear definition, often including a number
• Measurable; This means the achievement can be checked
• Achievable; This means you can achieve your target but you may
need to stretch yourself
• Realistic; This means that the target should sensible so that you can achieve it
• Time-related; this means setting a date for achievement or review

Question 6

Uses of mission statements

Answer 6

A. Focus; helps to focus and involve all employees in the business
B. Profitability; helps to motivate employees to become more efficient which could have an impact on profitability
C. Identity; helps to create an identity in a competitive marketplace

Question 7

Limitations of mission statements

Answer 7

A. Can be unrealistic and over optimistic
B. Can be a waste of management time and resources
C. Can lead to conflicts and inconsistencies when not properly written
D. Can be ambiguous
E. Can become obsolete as the business develops but the mission statement remains the same (perhaps due to a merger or change of product, iPod to iPhone for example)

Question 8

Stakeholder perspectives on mission statements?

Answer 8

Owners - Owners will want to maximise shareholder value of the business

Managers -Manager will look for core aims and objectives of the business to lead their staff / teams with

Employees- Employees will look for motivational statements that make them feel proud to work for that company

Pressure groups - Pressure groups will look for a clear environmental or ethical message in the mission statement

Customers - Customers will look to see core business principals that are ethical

Competitors - Competitors will look to see if the business is visionary, competitive, innovative and organised

Question 9

Objectives hierarchy

Answer 9

1. Aims
2. Mission statement
3. Corporate objectives
4. Functional objectives

Question 10

Departmental and functional objectives

Answer 10

The objectives of a department within a business

Question 11

Objective(or goal)

Answer 11

A target of or outcome for a business that allows it to achieve its aims