Chapter 2

Question 1

in order to be effective, what four elements must a mission be

Answer 1

purpose - why does the company exist
strategy - the range of businesses in which the firm seeks to compete
values - beliefs and moral principles which lie behind the culture
policies and behaviour standards - guidelines for day to day

Question 2

definition of mission statement

Answer 2

aims to provide employees and stakeholders with clarity about what the organisation is fundamentally there to do

Question 3

4 things a mission statement should address

Answer 3

reason for existence

identity of stakeholder groups and commitment to them

nature of firms business

ways of competing

Question 4

advantages of mission statements

Answer 4

communicate nature of organisation

communicate desired culture and behaviour

provide a focus for performance measurement

provide framework for strategic planning

Question 5

criticisms of mission statements

Answer 5

often full of generalisations

may be a PR exercise rather than an actual representation

have little value if not true

may become obsolete if not updated

Question 6

hierarchy of objectives ( most important to least)

Answer 6

corporate objectives
business objectives
operation objectives
individual objectives

Question 7

what are critical success factors (CSFs)

Answer 7

those aspects of a product or service which are particularly valued by customers, and therefore at which a business must excel in order to outperform its competition

Question 8

two types of CSF’s

Answer 8

monitoring - short term, operational focus

building - longer term, future orientated, build strategic capabilities

Question 9

what are KPI’s

Answer 9

measures used to assess if business is achieving its CSF’s

Question 10

5 things KPI’s must be

Answer 10

Specific
Measureable
Attainable
Relevant
Time bound