3.7.1 Mission, corporate objectives and strategy

Question 1

Aims

Answer 1

The potential if everything runs smoothly - the intention of achieving

Question 2

Mission

Answer 2

A firms overall purpose and reason for existing

Question 3

Mission statement

Answer 3

A mission statement is defined as an action-based statement that declares the purpose of an organization and how they serve their customers. This sometimes includes a description of the company, what it does, and its objectives. A mission statement is a short summary of your company’s purpose, the overall aim of the business.

Question 4

Porters five forces

Answer 4

Porter’s Five Forces Framework is a method for analysing competition of a business.

• The number and power of a company’s competitive rivals
• Potential new market entrants
• Suppliers
• Customers
• Substitute products that influence a company’s profitability.

Question 5

Satisfice

Answer 5

Satisficing behaviour is an alternative business objective to maximising profits. It means a business is making enough profit to keep shareholders happy or it’s sufficient for investors to maintain confidence in the management they appoint.

Question 6

Internal influences on Objectives

Answer 6

• Financial constraints - e.g. staff training can be expensive
• Corporate Culture - E.g. If HR is recognised as an important function then training will be important
• Organisational structure - flat or tall structures may have different approaches to HR objectives
• Trade Unions and employee relations - Will affect how HR objectives are defined and achieved
• New Technology - The introduction of new technology could mean a reduction in workforce or more training
• Overall performance of the business - If the business is expanding or contracting this will affect the employee requirements

Question 7

External influences on Objectives

Answer 7

Hint: PESTLE

• Political factors - Change in government or government spending can affect HR decisions
• Environmental factors - Extreme groups
• Social factors - Increased emphasis on work-life balance means HR needs to consider more flexible working conditions
• Technological factors - HR may have to increase training for new technology
• Legislation - Any new employee-related legislation can affect HR objectives, e.g. Parental leave given to new fathers
• Economic factors - The country being in recession or growing will affect demand
• Actions of competitors - Shortage of skills and increased competition can force up salaries
• Structure of the population - An aging population or more graduates available can change HR objectives, e.g. B&Q hiring older people

Question 8

Functional objectives

Answer 8

Functional objectives are those that relate to the specific functions of a business (e.g. marketing, operations, HRM, finance) and which are designed to support the achievement of corporate objectives. A well-established business will divide its activities into several business functions.

Question 9

SWOT Analysis

Answer 9

SWOT (strengths, weaknesses, opportunities, and threats), and so a SWOT Analysis is a technique for assessing these four aspects of your business.

Question 10

Lobbying

Answer 10

The term lobby refers to a group of people who band together and try to influence people in public office and politicians. A lobby is typically formed to influence government officials to act in a way that is beneficial to the lobby’s or an industry’s best interests, either through favorable legislation or by blocking unfavorable measures. The term is also used as a verb to describe the influence that a group of individuals exerts over other people.

Question 11

Enterprise resource planning (ERP)

Advantages and disadvantages

Answer 11

This is a software system that helps businesses integrate their and manage their often complex financial, supply chain, manufacturing, operations, reporting, and human resource systems.

Advantages include: (If implemented successfully)

• Financial management - Better control over cash flow, assets and accounting
• Supply chain and operating management - Streamlined purchasing, inventory, manufacturing etc.
• Customer relationship management -improved customer service, and opportunities to cross-sell
• Project management - complex projects better managed and to lower cost
• Human resources management - may help attract and retain good employees
• Business intelligence - improved management reporting, analysis, and business analytics
• International business - helps coordinate multi-location business management

Disadvantages:

• Expensive
• Complex

Question 12

Functional strategy

Answer 12

A functional strategy helps set objectives that guide the optimum allocation of resources among different business functions.