Chapter 4: Business objectives

Question 1

What are considered to be the limitations of a mission statement?

Answer 1

• They inform aims, BUT they are too vague and general, not really specific about the firm itself and their future plans.
  E.g two firms can have similar m.s’s yet have different plans.
• they are based on a public relations exercise, in order to make stakeholders to feel good about the firm- attracting employees etc.
• it’s virtually impossible to analyse.

Question 2

State 4 factors that would help to ensure that corporate objectives were effective in – assisting a firm to achieve it’s aim?

Answer 2

1) seeking out a corporate aim (v. Long term goals)
2) providing clear guides for management action (sense of purpose)
3) providing measurable goals (realistic, achievable ones)
4) Form solid framework for more specific objectives

Question 3

What’s the purpose of a mission statement?

Answer 3

A brief statement of a company who’s purpose or intent is to:
- serve as a practical frame of reference for guidance in
-providing a sense of direction +
- decision making for all levels of management,
It reveals:

Core aims of the business,
designed to motivate employees and stimulate interest by any outside groups (such as investors)