Business objectives and strategy

Question 1

mission statement definition

Answer 1

sets out the purpose of an organisation and thus gives its reason for existing

Question 2

vision statement definition

Answer 2

sets out a businesses aspirations for the future

Question 3

what is the difference between a mission statement and a vision statement

Answer 3

mission statement states a businesses purpose and a vision statement sets out what it wants to do or be in the future

Question 4

how does a mission statement affect a stakeholder

Answer 4

relates to the businesses current position and its intended to provide information for stakeholders

Question 5

how does a vision statement affect stakeholders

Answer 5

tend to be long term as they look to the future and can be a source of inspiration to stakeholders

Question 6

what is the order to achieve the mission statement

Answer 6

-> vision statement
—> strategy (how will it get there)
——–> corporate objective (targets within the plan and measure sucess)

Question 7

5 influences on a businesses mission statement

Answer 7

• values of the founder
• values of employees
• industry the business is part of
• society’s views
• the ownership of the business

Question 8

corporate objectives definition

Answer 8

are medium- to long-term goals established to coordinate the business
- turn the mission statement into something more quantifiable

Question 9

strategic decisions definition

Answer 9

are judgements made by senior managers that are long term, involve a major commitment of resources and are difficult to reverse

Question 10

shareholder returns definition

Answer 10

the financial benefits derived by shareholders from buying a company’s shares and are the combination of an appreciating share price and dividends paid

Question 11

dividends definition

Answer 11

that part of a company’s profits that are paid to shareholders in proportion to the number of shares they own

Question 12

4 external influences on corporate objectives and strategic decisions

Answer 12

• state of the economy
• global prices
• technological changes
• migration

Question 13

4 internal influences on corporate objectives and strategic decisions

Answer 13

• poor performance
• new leader
• business culture
• pressures for short-termism

Question 14

short-termism definition

Answer 14

the pressure to deliver quick results to the potential detriment of the longer term development of a company

Question 15

business culture definition

Answer 15

encompasses the values, attitudes and beliefs of those who work for a business

Question 16

strategy definition

Answer 16

a long-term plan to achieve the businesses vision through attaining its corporate objectives

Question 17

tactics definition

Answer 17

are short-term decisions, usually involving relatively few resources, that are made to implement a strategy

Question 18

functional decision definition

Answer 18

a judgement taken by managers responsible for one aspect of a business’s activities, such as marketing or human resources

Question 19

how do functional decisions and strategic decision link

Answer 19

functional decisions have to be coordinated so the different functions work together to meet and support the strategic decision