Business Objectives 1.4

Question 1

Define the term “SMART Objectives”

Answer 1

The term “SMART Objectives” refers to aims that are :
(S)PECIFIC
(M)EASUREABLE
(A)CHIEVEABLE
(R)EALISTIC
(T)IME-SPECIFIC

Question 2

Define the term “Corporate Objective”

Answer 2

The term “Corporate Objective” refers to a very long term goal that a business hopes to achieve.

Question 3

List the hierarchy of objectives in order from the highest to the lowest.

Answer 3

1. AIMS
2. MISSION
3. CORPORATE OBJECTIVES
4. DIVISIONAL OBJECTIVES
5. DEPARTMENTAL OBJECTIVES
6. INDIVIDUAL TARGETS
   Abbreviation to help remember them : A.M.C.D.D.I

Question 4

Define the term “Mission Statement”

Answer 4

The term “mission statement” refers to a statement of the business’s core aims.

Question 5

List the 8 common corporate objectives.

Answer 5

• Profit maximization
• Profit satisficing
• Growth
• Increasing market share
• Survival
• Corporate Social Responsibility
• Maximizing short-term sales revenue
• Maximizing shareholder value

Question 5

Define the term “Corporate Social Responsibility”

Answer 5

The term “Corporate Social Responsibility” refers to the businesses that consider the interests of society by taking responsibility for the impact of their decisions and activities on customers, employees, communities and the environment.

Question 6

List 3 reasons why a business may change their objectives.

Answer 6

1. Previous objectives may have already been met.
2. A sudden change in the economic state.
3. An increase in competition.

Question 7

List 2 Advantages for setting up objectives as a business.

Answer 7

1. It provides the business with a purpose and sense of direction. This will help motivate the workers as they know which direction they must work towards.
2. It helps measure / assess the performance of a business over a given period of time.

Question 8

What are the factors that determine the corporate objectives of a business?

Answer 8

• Public or Private sector
• Corporate Culture
• Number of years in operation
• Ethics
• Size and legal form of the business

Question 9

Define the term “Management By Objectives”

Answer 9

A method of coordinating and motivating all staff in an organization by dividing its overall aim into specific targets for each department manager and employee.

Question 10

Define the term “Ethical Code”

Answer 10

A document detailing a company’s rules and guidelines on staff behavior that must be followed by all employees.