Aims And Objectives

Question 1

Vision statements

Answer 1

A vision statement is a description of what a business sets out to achieve in the medium to long term. The vision statement should provide a clear guide to senior management of the future direction of the business and help to direct strategic decision-making across the business

Vision statements are normally used for internal purposes and are relevant to internal stakeholders

Question 2

Mission statement

Answer 2

This focuses on what the business wants to do in the present (what a business is doing now), whereas a vision statement focuses on the future (where a busines wants to be).

A business’s mission statement is a broad statement of its aims and values. It will guide the everyday operations and decision-making of the business.

Question 3

Purpose of a mission statement

Answer 3

The mission statement is sometimes seen as a crucial element in the strategic planning of a business organisation. The mission statement can be the foundation stone of an overall strategy and then be followed through into the development of more specific functional strategies. By defining a mission an organisation is making a clear statement of its purpose which is communicated to its external stakeholders.

One of the main purposes of a mission statement is to give an organisation cohesiveness, so that everyone in the organisation has a set of common aims. They know what the organisation stands for and what it is trying to achieve. In this way mission statements and vision statements are similar as they are used internally, but mission statements are also used in communications with external stakeholders.

Question 4

Business objectives

Answer 4

Business objectives are more specific and measurable targets that a business will set to achieve its aims. They are usually set on a short-to-medium timescale.

Question 5

Aim

Answer 5

Aims are normally set to be achieved over the medium-to-long term.

Question 6

Business aims can be grouped into the following main categories:

Answer 6

Survival
Profit maximisation
Sales maximisation
Growth
Increase shareholder value
Corporate social responsibility/ Environmental/ Ethics

Question 7

SMART

Answer 7

Specific – objectives should specify what the business wants to achieve. They should be clear so that all stakeholders understand what the objective is.

Measurable – objectives should be measured to make sure the objective has been achieved. This measurement should be numeric.

Achievable – are the objectives achievable and attainable? There is no point in setting an unrealistic target, this can be demotivating. Sometimes ‘A’ can be used for Agreed (do all internal stakeholders agree on the objective and whether it is achievable?)

Realistic – is the business likely to achieve the objectives with the resources available?

Time limited or constrained – a timescale needs to be set for achieving the objectives.