3.7.1 Mission and corporate objectives

Question 1

What does a mission statement set out and who do they relate to

Answer 1

Mission statements sets out the purpose for a business existing. The mission relates to all stakeholders.

Question 2

What do mission statements typically focus on

Answer 2

Values of the business
Long term aim of the business
Impact the business intends to have on society
Importance of different stakeholders

Question 3

What may influence the missions of a business

Answer 3

Values of founders
The industry the business is in 
The views of society 
The size of the business and types of ownership 
The culture of the business

Question 4

What is the relationship between mission and corporate objectives

Answer 4

Whereas a mission statement will lay down the broad purpose of a business, corporate objectives will set clear targets that are specific and measurable

Question 5

What are some typical areas that corporate objectives tend to focus on

Answer 5

Profitability 
Social responsibility 
Growth 
Shareholders value 
Market standing 
Innovation 
Sustainability

Question 6

Internal Factors affecting corporate objectives

Answer 6

Poor performance 
New leadership
Business ownership
Business culture 
Business growth

Question 7

External factors affecting corporate objectives

Answer 7

Economic conditions 
Actions of competitors 
Global prices 
Technological change
Social change

Question 8

What is short-termism

Answer 8

The pressure of achieving short term gains over long term success

Question 9

What is strategy

Answer 9

A long term plan/approach that a business will take in order to achieve its objectives

Question 10

What does strategy involve

Answer 10

A major commitment to resources

Question 11

Clear ……. guide ……. ……..

Answer 11

Clear strategies guide tactical decisions

Question 12

Example of strategy guiding tactical decisions

Answer 12

A business may have a strategy to become market leader by have a wide range of innovative products in the market

Question 13

What are tactics

Answer 13

Tactics are the day to day decisions taken by middle managers

Question 14

What do tactics involve

Answer 14

Tactics are frequent and involve fewer resources but are taken to achieve the strategic direction of a business

Question 15

What are functional objectives guiding

Answer 15

They guide tactical decisions made by managers on a day to day basis

Question 16

What are examples of functional objectives and put them into context

Answer 16

Finance - to reduce labour costs to 40% of the overall expenditure budget
Marketing - launch two new products in the next year
Operations - reduce wastage by 20% within the next 6 months
People - ensure employees have a career action plan and target around areas for personal career development by Christmas

Question 17

What are functional objectives

Answer 17

Objective that are set by functional managers/directors that support and contribute towards achieving corporate objectives

Question 18

What is SWOT analysis

Answer 18

A tool that a business uses to analyse its current position and external factors that might affect it

Question 19

What does swot stand for

Answer 19

Strengths
Weakness
Opportunities
Threats

Question 20

Example of strength

Answer 20

Business may have strong brand image - business will develop strategy around this

Question 21

Example of weakness

Answer 21

Poor cashflow - business will eliminate anything that requires cashflow

Question 22

Example of opportunities

Answer 22

A fast growing geographical market - business will try and exploit these with its strategy

Question 23

Example of threat

Answer 23

A new competitor entering the market - business will attempt to protect itself against them

Question 24

Benefits of SWOT

Answer 24

Assists strategic thinking in a structural way
Low-cost simple approach
Can be combined with other thinking models e.g PEST

Question 25

Drawbacks of SWOT

Answer 25

Subjective - depends on opinions of managers
Does not offer clear solutions
Classification may depend on perspective