Business Objectives

Question 1

Advantages of mission statements

Answer 1

Sets out what an organisation is
trying to achieve, i.e. the reason why it exists.

Makes decision making easier by
enabling options to be compared against the overall objective of the business.

Effective in setting or changing an organisation culture

It gives everyone a sense of common purpose so that all actions are geared towards the same end.

Question 2

Disadvantages of mission statements

Answer 2

Often seen as a marketing (Public Relations) ploy rather than meaningful statements of intent.

Many mission statements do not reflect what is actually happening in company.

May damage business reputation if set out values are not achieved

Many mission statements are unrealistic, An unrealistic mission statement can
actually be demotivating; employees may struggle to meet its demands and it may lead the business to make unwise decisions.

Question 3

What is a mission statement (4)

Answer 3

A mission statement is a qualitative statement of the businesses aims and uses language aimed to motivate employees and convince customers, suppliers and those outside the firm the sincerity and commitment of the business. The overall objective of the business to benefit stakeholders.

(Example)

This can be seen via the text in the c/s

Question 4

What are business objectives, what way should these objectives be formatted (SMART) and highlight the meaning behind each acronym?

Answer 4

Objectives are medium to long term goals established to coordinate the business.To be effective objectives should be SMART so the business can judge the success or otherwise of its efforts to achieve these objectives.

Specific - They must define exactly what the firm is measuring, such as sales or profits.

Measurable- They must include a quantifiable target e.g. a 10% increase.

Agreed - If targets are simply imposed on people they are likely to resent them. If, however, the targets are discussed and mutually agreed, people are more likely to be committed to them.

Realistic - If the objectives are unrealistic e.g. too ambitious people may not even bother to try and achieve them. To motivate people the targets must be seen as attainable.

Time Specific - Employees need to know how long they have to achieve the target.

Question 5

What are businesses main objective?

Answer 5

• Survival
• Growth
• Profitability
• Non-financial objectives