Objectives & Strategy (Mr Gibbins) Flashcards
Mission Statement
Gives a general idea of what the business exists to do / purpose.
Aim
More specific than mission statement. E.g survival, growth, profit.
Strategic objectives
How a business plans to achieve it’s aims.
Tactical objectives
Day to day objectives needed to ensure strategic ones are met.
Name 2 disadvantages of a mission statement.
- Often too vague or states obvious.
- Not always supported by actions of the business.
- Sometimes regarded cynically by employees.
- Not supported whole heartedly by senior management.
Internal Audit
Allows a business to assess its strengths and weaknesses in relation to competitors.
External Audit
Looks at opportunities open to the business and the threats it faces externally.
Steps of Plan Review Cycle
1) planning and preparing
2) gathering evidence
3) taking action
4) reviewing and improving
2 advantages of plan review cycle
- Methodical
- Clear what everyone has to do.
- Deviations will be limited.
- Allows evaluation and adaptation.
Name a disadvantage of plan review cycle.
- Lengthy process
- Can be inflexible
- Needs to have empowered staff.
Name two ways a business might respond to risk
- Ignore it
- Contingency plans
- Share/deflect i.e insurance
- Embrace as opportunity, especially if competition affected.
Opportunity costs
The benefits lost by choosing one option rather than another.
Contingency planning
To minimise the impact of a significant foreseeable event and to plan for how the business will resume normal operations after the event.
Name two advantages of contingency planning
- Damage limitation
- Minimise risk of catastrophic loss
- Recover faster
- Business more likely to survive.
Name two disadvantages of contingency plans.
- Time
- Money
- Opportunity cost
- wasted if negative event doesn’t happen.
