3.7.1 (1) Corporate Objectives

Question 1

Objectives

Answer 1

Statements of specific outcomes that are to be achieved

Question 2

What are business objectives?

Answer 2

1. Specific intended outcomes of business strategy

2. Targets which the business adopts in order to achieve its aims

Question 3

Corporate Objectives

Answer 3

Those that relate to the business as a whole

Question 4

What are corporate objectives driven by?

Answer 4

Mission, vision and aims or goals

Question 5

Mission

Answer 5

Overall purpose of the business

Question 6

Vision

Answer 6

Overall aspiration of the business

Question 7

Aims and goals

Answer 7

Statements of what business intends to achieve

Question 8

What are the main purposes of corporate exams?

Answer 8

1. Provide strategic focus
2. Measure performance of the firm as a whole
3. Inform decision-making (which involved strategic choice)
4. Set the scene for more detailed functional objectives

Question 9

SMART Objectives

Answer 9

Specific
Measurable
Achievable
Relevant
Time-Bound

Question 10

Specific

Answer 10

State exactly what is to be achieved

Question 11

Measurable

Answer 11

Capable of measurement - possible to determine whether it has been achieved

Question 12

Achievable

Answer 12

Realistic considering circumstances in which it is set ad the resources available to the business

Question 13

Relevant

Answer 13

Should be relevant to the people responsible for achieving them

Question 14

Time Bound

Answer 14

Should be set with a realistic time-frame in mind

Question 15

Hierarchy of Objectives - what is it?

Answer 15

Corporate objectives are positioned at the top as the most important, with tactical and operational towards the bottom.

Question 16

How is the Hierarchy ordered?

Answer 16

Mission
Corporate/Strategic
Functional
Team
Individual

Question 17

Examples of areas where corporate objectives are used

Answer 17

Market, innovation, productivity, profitability

Question 18

Examples of areas where functional objectives are used

Answer 18

Increased sales, reduce costs, increase cash flow, improve customer satisfaction

Question 19

Internal influences of corporate objectives

Answer 19

Business ownership
Attitudes to profit
Ethical stance
Organisational culture
Leadership
Strategic position and resources
Stakeholders influence

Question 20

External influences of corporate objectives

Answer 20

Short-termism
Economic environment
Political/legal environment
Competitors
Social and technological change

Question 21

What is short-termism?

Answer 21

Where a business prioritises short-term rather than long-term performance

Question 22

Why are businesses concerned by short-termism?

Answer 22

• stock market focus on latest financial performance
• bonuses and other financial incentives are largely based on short-term performance
• frequent changes in leadership and strategy

Question 23

What would businesses focus on using a short-termist approach?

Answer 23

1. Share price and market capitalisation
2. Revenue growth
3. Gross and operating profit
4. Unit cost and productivity
5. Return on capital employed (ROCE)

Question 24

Strategy

Answer 24

How a business intends to achieve its objectives
Usually long term
Made by senior management

Question 25

Tactics

Answer 25

Support achievement of specific targets
Usually routine and short-term
Often delegated to junior management

Question 26

Examples of strategic decisions

Answer 26

1. External growth via takeover
2. Enter international market
3. Adopt cost minimisation strategy
4. Rebrand the business
5. Close a major business suit

Question 27

Examples of tactical decisions

Answer 27

1. Relocate staff from takeover HQ
2. Choose locations in new market
3. Identify specific cost savings
4. Launch rebranding campaign
5. Determine detailed closure plan