Chapter 44- Corporate Objectives

Question 1

Business Aims

Answer 1

Theses are long term goals, its purpose or reason for being. Ultimately its aims are what the business is striving to achieve e.g. become world leader

Question 2

Mission Statements

Answer 2

A brief statement written by the business describing its purpose and objectives, designed to encapsulate its present operations.
- A good mission statement should help guide decision making
of the firm – running a business can be extremely complicated
and it is easy to get lost in the finer details of the decision-
making

• When all else fails a good mission statement can clarify the
  direction a business should take by reminding the owners and
  directors of the reason why the whole business exists

Question 3

Corporate strategy

Answer 3

Plans and policy’s developed to meet a company’s objectives. They should be specific to the company, its specific history and vision of the future and sit well with its mission statement.

Question 4

Development of Corporate objectives

Answer 4

• Specific- Must be very concise – means objectives set out
clearly what the business is aiming to achieve and should refer
to a particular aspect of function of the business

• Measurable- you have to be able to follow it and measure it
e.g. profit not likeness

• Agreed – implies everyone responsible for achieving the
objective has agreed with the objective and understands what
It means for them

• Realistic- means that the objective can be met within the
recourses available and the prevailing market conditions

• Time specific- Needs a time frame – gives the stated time
frame within which the objectives are to be achieved

Question 5

Departmental and functional objectives

Answer 5

the objectives of a department within a business
-From general objectives that flow from the mission statement
come more specific corporate objectives that detail specifically what the firm does

-Following this hierarchy come the even more specific departmental and functional objectives, which set day-day goals and may include human recourses, finance, operations, logistics and marketing

Question 6

Small business objectives:

Answer 6

1. To ensure that the company breaks even at the end of the tax
   year
2. To improve the firms liquidity in the next six months
3. To increase sales by 10 percent over the next three years
4. To increase pre-tax profits by 5 percent over the next 12
   months
5. To hire staff with skills in sales and marketing

Larger businesses tend to have objectives that are mostly financial – this is because they have many stakeholders to satisfy, the foremost being the shareholders.

Question 7

Critical appraisal of mission statements

Answer 7

Analysing mission statements to make sure that the business sticks to its core values