BST - The purposes of a business (3) Flashcards
What is a mission statement?
Written communication of an organisation’s mission to internal and external stakeholders. It is usually a brief statement that sets out in general terms - has no timescale or commercial terms.
Features of a successful mission statement (4) PSPV
Purpose: why does the organisation exist and what does it aim to achieve?
Strategy: What gives the company a competitive advantage?
Policies: standard/behaviours adopted by the organisation
Values: beliefs employees share
Advantages of a mission statement (3)
Help resolve stakeholder conflict
Sets the direction of the company - helps formulate strategy
Helps communicate the values and direction of the company
Disadvantages of a mission statement (3)
Often full of terms such as ‘the best’ which give staff little idea of what to aim at
Often ignored by managers
Often considered to just be a public relations exercise
What is required if asked to ‘critically evaluate the two mission statements’?
PSPV
What is the purpose, strategy, policies and values.
Are they clear? what do they state?
ALWAYS CONCLUDE
SMART - setting objectives. What does is stand for?
Specific - clear and easy to understand
Measurable - to enable control and communication
Attainable - pointless if they can’t realistically be met
Relevant - appropriate to the mission
Timed - time period for the achievement
What do we use SMART for?
Setting objectives within the organisation based on the mission
What is the primary objective of a profit making entity?
Maximise shareholder wealth
What is the primary objective of a not for profit entity?
Maximise the benefit of the target stakeholder
What are the secondary objectives of a profit making entity? (4)
Customer satisfaction
Social responsibility
Innovation
Meaningful employment
What are the secondary objectives of a non profit entity? (3)
Investing in staff
Minimal impact on the local environment
3 E’s - economy, efficiency, effectiveness
What are the three E’s
Economy, efficiency, effectiveness
What are some issues with the objectives of a NFP organisation?
They often have too many objectives which can be difficult to measure. Stakeholder conflicts may be more difficult to resolve (aka in a school they have a wide range of influential stakeholders - teachers, students, parents, governors, local authority…)
Financial constraints may limit the amount they can achieve
What is a stakeholder?
An individual or group with an interest in what the organisation does
What is stakeholder mapping?
The process of identifying key stakeholders (i.e. individuals or groups with a vested interest in your product or project) and understanding their relationships with each other.
