3.1.1 corporate objectives Flashcards
What is the hierarchy of business objectives?
- mission statement and general ais
- corporate objectvies
- department objectives
What is a mission statement?
A brief statement written by a business and describing its purpose.
- make a commitment to customers, bring a workforce together with a shared purpose
What are the advantages of a mission statement?
-Provides identity to a business
- gives a sense of direction employee -can remain focused on their purpose- increases motivation
What are the disadvantages of a mission statement?
- workers may not agree
- may not be realistic or achieveable
- can be ambiguous
What is a corporate objective?
They are objectives that relate to a business as a whole
- set by senior management
- provide focus for more detailed objectives
-flow from the mission statement
- tend to focus on business performance and desired results
What is a SMART objective?
Specific
Measurable
Achievable
Realistic
Time based
What are department/ functional objectives?
work is divided into departments eg. sales, hr
- each department will set its own objectives which should flow from the corporate objective
- helps a business to achieve its corporate objective of more dividends for the shareholders
What are examples of objectives for small businesses?
- ensure company breaks even at the end of the year
- improve the firms liquidity in the next 6 months
- to hire 5 staff with skills in marketing
what are examples of objectives for large businesses?
- improve profits by 20% in the next 5 months
- increase market share
What is asked during critical appraising of mission statements?
- who is the intended audience?
- what is the purpose of their mission statement?
- how does the strategy that the business follows fit with their mission statement?
What is the purpose of a mission statement?
- focus
- identity
- profitability
