44 Corporate objectives

Question 1

corporate objectives

Answer 1

the objectives of a medium to large-sized business as a whole

Question 2

departmental and functional objectives

Answer 2

the objectives of a department within a business

Question 3

mission statement

Answer 3

a brief statement, written by the business, describing its purpose and objectives, designed to encapsulate its present operations

Question 4

objective/goal

Answer 4

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

Question 5

SMART

Answer 5

acronym for the attributes of a good objective: specific, measurable, agreed, realistic and time specific

Question 6

reasons why a business may form and share a mission statement

Answer 6

1. to make a commitment to its customers. A mission statement forms a promise to customers on what they can expect the business to strive for.
2. to bring a company’s workforce together with a shared purpose. Many successful busiesses have a mission statement that their employees believe in. This is why a mission statement is important in forming a strong corporate culture.

Question 7

advantages of making a mission statement

Answer 7

1. a good mission statement helps guide the decision making of the firm.
2. when all else fails a good mission statement can clarify the direction a business should take by reminding the owners and directors of the reason why the business exists.

Question 8

examples of mission statement

Answer 8

R&F Fitness Centre: ‘We improve levels of fitness by providing individual plans for people of all ages and helping them to achieve their aims.’
R&B furniture maker: ‘To help create practical and beautiful homes for our customers.’

Question 9

development of corporate objectives

Answer 9

They should be specific to the company, its particular history ad vision of the future, and sit well with its mission statement. They should focus mainly on desired performance and results of the business over time, and may include such goals as market share, profit levels, creation of new products or processes, resource usage and scale economies, management of people and ethical behaviours.
Specific: the objectives sets out clearly what the business is aiming to achieve and should refer to a particular aspect or function of the business.
Measurable: involves evidence to demonstrate whether or not the objectives have actually been achieved.
Agreed: everyone is responsible for achieving the objective has agreed with the objective and understands what it means for them.
Realistic: ensures that the objective can be met within the resources available and the prevailing market conditions.
Time specific: gives the stated time frame within which the objectives are to be achieved.

Question 10

departmental and functional objectives

Answer 10

they are more specific objectives that set the day-to-day goals and may include human resources, finance, operations, logistics and marketing. These all refer back up the hierarchy to the corporate objectives and mission statement, so that the goals and activities of the business are consistent.

Question 11

the objective hierarchy

Answer 11

aims
mission statement
corporate objectives
functional objectives: finance, marketing, operations and people

Question 12

small firms objectives

Answer 12

small businesses may have a wide variety of objectives, such as:
to ensure that the company breaks even at the end of the tax year
to improve the firm’s liquidity in the next six months
to increase sales by 10 per cent over the next three years
to hire five new staff with skills in sales and marketing, and build a strong marketing department over the next year

Question 13

large firms objectives

Answer 13

the objectives of large firms and multinationals tend to be mostly financial. This is because they have many stakeholders to satisfy, the foremost being the shareholders. Some examples might be:
maximising sales, sales revenue or market share
achieving efficiencies in cost
looking after employees or ensuring customers are satisfied

Question 14

critical appraisal of mission statements and corporate aims

Answer 14

a critical re-assessment should involve an appraisal of the following:
what is the purpose of the mission statement?
who is its intended audience?
how does the strategy followed by the business fit with its stated mission?
are the aims and objectives realistic and achievable?