Aims and objectives Flashcards
What is a vision statement?
A description of what the business is hoping to achieve medium to long term. Normally used for internal stakeholders and gives strategic direction to management.
Benefits of vision statement?
-Gives a clear identity and ethos.
-Helps when setting objectives.
-Focuses senior management on what needs to be achieved.
-Tells employees how they can contribute.
Drawbacks of vision statements?
-There is a difficult balance between forward looking but not being too challenging that it is impossible to achieve.
-Employees’ individual objectives might not match the organisation’s vision.
-Ineffective if not communicated with all stakeholders efficiently.
What is a mission statement?
A broad statement of the business’ current aims and objectives which affect it’s everyday operations and decision making.
-More short term and about the present.
-For external stakeholders.
-Gives the organisation cohesiveness and everyone knows what values they stand for.
Benefits of mission statements?
-Motivational and can inspire workers.
-Can differentiate it from competitors.
-Helps to define the market it wants to succeed in.
-Acts as a form of advertising.
Drawbacks of mission statements?
Vague and states the obvious.
-Has been criticised as a PR exercise that has no thought put into it, so can be unbelievable.
-True values of the business and individuals in the business may conflict it.
What is the link between vision/mission statements and aims and objectives?
-Vision statements are more geared towards the future and therefore long term aims of the organisation are based on the vision statement.
-Mission statements ensure there is a common aim amongst all stakeholders to uphold the values of the business.
What are aims?
General long term targets.
What are objectives?
Specific, short-term statements detailing how to achieve the organization’s goals.
What are corperate objectives?
Set by the board of directors. They derive into functional and departmental objectives which all relate back to the corporate objectives.
What is survival?
Short term objective that is appropriate for companies plagued with overcapacity, intense competition, or new start ups. Making enough capital to pay off suppliers or until they break even.
-Establishing a local name and reputation.
-Prevalent in times of economic crisis.
What is profit maximisation?
Most of the private sector want to maximise annual profits above all else.
What is growth and gaining market share?
By reinvesting profits, the business hopes to get more of the sales available in the market in order to grow in size or take market share from competitors.
-Want to be preferred option by customers.
-Develop a strong brand identity.
What is increasing shareholder value?
-Either increasing the price of shares on the stock market or increasing the dividends that shareholders receive.
-An important objective because shareholders provide capital to invest in the business, so need to be kept content.
What are corporate social responsibility and ethical objectives?
Minimising the impact on the environment and consider society’s needs.
