Aims and objectives

Question 1

What is a vision statement

Answer 1

A description of what a business sets out to achieve in the medium and longterm

Question 2

What should the vision statement provide

Answer 2

A clear guide to senior management of the future direction of the business and help to direct strategic decision making -

Question 3

What question should the vision statement answer

Answer 3

Where would the business like to see itself in the future

Question 4

Give an example of vision a statements

Answer 4

1 trees for the future - plant trees. Change lives.

Question 5

What benefits can a vision statement bring

Answer 5

1 a clear vision van give the business a clear identity and ethos
2 can help set objectives ans support the business strategy
3 focus senior managers on the tasks to achieve the vision
4 communicates to employees how they can contribute and can improve employee engagement
5 commits resources to achieving the vision

Question 6

What is another statement used by businesses

Answer 6

Mission statement

Question 7

What is the purpose of a mission statement

Answer 7

Focuses on what the business wants to do in the present

Question 8

What is a mission statement

Answer 8

Broad statement of aims and values and guides the everyday operations and decision making of the business- a clear statement of the businesses purpose

Question 9

Give an example of a mission statement

Answer 9

Ford - we go further to make our cars better, our employees happier and our planet a better place to be.

Question 10

Give reasons for having a mission statement

Answer 10

1 helps ensure all stakeholders are clear on the purpose of the business so everyone can be focused on the same goals and objectives
2 helps with strategic planning since this should be the start point
3 gives some transparently for investors- they will know how their capital is used
4 helps customers understand the ethics and objectives of the company

Question 11

Why do some argue mission statements are unrealistic

Answer 11

They can never be achieved RCPCA state they will alleviate all suffering of animals

Question 12

What is the main purpose of having a mission statement

Answer 12

To give an organisation cohesiveness so all have a common set of aims that the organisation stands for and what it is trying to achieve

Question 13

What are business aims

Answer 13

What the business wants to achieve in the future - the goals for the business they are specific and measurable targets

Question 14

What are the 6 areas aims and objectives can be grouped into

Answer 14

1 survival
2 profit maximisation
3 growth
4 increase shareholder vision
5 corporate social responsibility/environmental/ethics

Question 15

Describe the survival objective

Answer 15

1 30% of businesses fail in first 2 years so the initial objective is to survive the difficult time of gaining customers, establishing good name an building a reputation

Question 16

Describe the profit maximisation objective

Answer 16

1 Objective of most businesses is to maximise profit. 2 profitability can be measured in a number of ways and can include gross, gross profit margin, net profit and net profit margins and return on capital employed. When examining profits a business neeeds to make comparisons against rival businesses and historical profit figures

Question 17

Describe growth and gaining market share as an objective

Answer 17

1some businesses will spend money of gaining customers, reducing profits in the short term hopefully increasing long term profits
2 may force competitors out of the market using loss making marketing strategies
3 growth is often based on reinvesting profits reducing short term returns but leading to greater market dominance in the long term and greater profits

Question 18

Describe increasing share holder value as an objective

Answer 18

This is measured by the amount of dividend paid to shareholders and increases in share prices . The objective is concerned with increasing the price of the business

Question 19

Describe corporate social responsibility/environmental/etethics

Answer 19

These are businesses that try to minimise the impact of their business activities on the environment and consider the needs of societies trading with companies who have fair working conditions .
Objective may come at a cost in lower profits

Question 20

How should objectives be written

Answer 20

Using SMART model
S specific - clearly stating specifically what the business wants to achieve
M measurable - objective can be measured and numeric to ensure objective is achieved
A achievable - achievable and attainable
R realistic - business is likely to achieve it with available resources
T time limited - achieved in a timescale

Question 21

Give 3 examples of a SMART target

Answer 21

To grow by 15% a year for the next 5 years by investing an additional £1m in advertising and opening 10 new stores

To achieve 40% market share share from current level of 35% within 3 years

To reach reach a net profit margin of 11% in the next 5 years

Question 22

What is the benefit of smart targets

Answer 22

1 focus attention
2 gain commitment from all levels to agreed targets
3 enable feedback and learning from within
4 achievement can be easily monitored