Corporate objectives Flashcards
Define the term mission statement.
A mission statement is a qualitative statement of an organisation’s aims.
What is the hierarchy of business objectives?
Mission statement and general aims. ------- Corporate objectives ------- Department objectives
Explain what a mission statement is.
A mission statement is a short way of a business expressing their main intent.
Nike’s mission statement is “To bring inspiration and innovation to every athlete* in the world.
A mission statement is a document written by a business which should provide general aims for all the employees to work towards
Critics say that mission statements are just a public relations tool
What qualities should mission statements have?
A mission statement sets out the purpose and primary objectives of a business in the present.
A mission statement should be memorable
A mission statement should be inspiring
A corporate vision looks towards the future and where the business would like to be
Explain corporate objectives.
Corporate objectives should flow from the mission statement and corporate vision
Usually set by senior management for the whole company
Aimed at satisfying the shareholders so may be related to profit or dividends:
e.g. Increase operating profit 4% over the next 24 months
Objectives need to be SMART
What are SMART objectives?
Specific; This means there must be a clear definition, often including a number
Measurable; This means the achievement can be checked
Achievable; This means you can achieve your target but you may need to stretch yourself
Realistic; This means that the target should sensible so that you can achieve it
Time-related; this means setting a date for achievement or review
What are department objectives?
In most businesses they divide up the work into departments or functions; sales, marketing, human resources, operations and finance
Each department will set their own objectives which should flow from the corporate objectives
For example, the marketing department may aim to increase sales 3% each quarter
This will help the business to achieve its corporate objectives of more dividends for the shareholders
What are the uses of mission statements?
Focus; helps to focus and involve all employees in the business
Profitability; helps to motivate employees to become more efficient which could have an impact on profitability
Identity; helps to create an identity in a competitive marketplace
What are the limitations of mission statements?
Can be unrealistic and over optimistic
Can be a waste of management time and resources
Can lead to conflicts and inconsistencies when not properly written
Can be ambiguous
Can become obsolete as the business develops but the mission statement remains the same
List the different stakeholders that have perspectives on mission statements.
Owners Managers Employees Pressure groups Customers Competitors
Explain owners’ perspectives on mission statements.
Owners will want to maximise shareholder value of the business
Explain managers’ perspectives on mission statements.
Manager will look for core aims and objectives of the business to lead their staff / teams with
Explain employees’ perspectives on mission statements.
Employees will look for motivational statements that make them feel proud to work for that company
Explain pressure groups ‘ perspectives on mission statements.
Pressure groups will look for a clear environmental or ethical message in the mission statement
Explain customers’ perspectives on mission statements.
Customers will look to see core business principals that are ethical
