7.1 Flashcards
influences on mission,objectives and strategy
what is a mission statement ?
sets out what a firm is trying to achieve
what will a mission statement include ?
what the firm believes in , its values, which markets it competes in and overall what the business wants to be.
what is the purpose of a mission statement ?
-everyone in the business knows what they should ultimately be trying to do
- directed towards achieving the mission
-enables decision making
-motivate employees
what does a mission statement need to be ?
-clear and concise
-informative
reviewed frequently
-inspirational
what are some influences on the mission of a business?
-competitors actions
-past performance
-PESTLE factors
-industry they compete in
what are corporate aims ?
Corporate aims are long-term plans of the business from which its corporate objectives are derived.
what should corporate aims provide guidance for ?
-functional objectives
-managers making decisions
-setting corporate objectives
what are corporate objectives?
Corporate objectives are medium to long term goals established to coordinate the business and enable the aim to be completed.
Objectives should always be SMART.
what does smart objectives ?
specific , measurable ,achievable , realistic and time
how does market position influence CO ?
This could be the share of sales in a specific new or existing market or a growth rate for sales in a market.
how does innovation influence CO?
This refers to the invention and development of new goods and services, as well as new processes and methods of producing and supplying products.
how does human resources influence CO ?
Objectives in this area may relate to motivation or engagement amongst employees.
how does productivity influence on CO ?
This refers to the efficient use of resources to gain the maximum output from minimal inputs.
how does financial resources influence CO?
These objectives could relate to the amount of capital available to a business and its sources, and how it might be used.
how does physical resources influence CO ?
This refers to the buildings, land, equipment and technological resources available to the business.
how does social responsibility influence CO ?
This is an area in which setting objectives has become more common as businesses have responded more fully and openly to stakeholders’ needs.
how does profit maximisation influence CO ?
profit is maximised when the difference between sales revenue and total costs are at its greatest.
what external factors influence CO ?
competition,economy,pressure groups,
what internal factors influence CO ?
Brand perception, finance, HRissues, experience,operational issues.
what is market standing ?
this is when a business try and establish an image to add value to the product and gives consumer confidence to assume best of company.
what does high market standing mean ?
the public needs to believe the business operates as a force of good whether its their products or employment practices or a positive approach to their social responsibilities.
what is short terminism ?
Whereas market standing is a classic long-term objective, some companies can only focus on the short term.
why does a business choose short terminsim ?
This is because trading difficulties have made business reporters critical of the management and are therefore scrutinising each 6 monthly profit statement.
This means that companies tend to spend less on growth and re development so that their cash flow and to some extent profits look healthy for their stakeholders. However, this could be at the cost of long-term prospects.
what are the three types of business ownership ?
plc- shares stock on stock exchange
ltd-family run business
private equity- buy business with the intention of stripping assets or rebuild the business
