Stakeholder Objectives & Mission Statements

Question 1

Importance of having a sense of what a business wants to achieve

Answer 1

Needs to be accurate - saying it just wants to make a profit isn’t enough

Depends on what the business is involved with and how long it’s been trading for

Will provide a target

Give everyone a sense of the idea to where the business is wanting/hoping to go

Question 2

The hierarchy of objectives

Answer 2

Mission statement ➡️ aims/goals ➡️ strategic objectives ➡️ tactical objectives

The mission/overall purpose of the business
The vision and where it wants it to be in the future
The aims for achieving the mission + vision
The objectives to achieve all the above ^^^^

Question 3

The mission statement

Answer 3

General idea of why the business is there to do and appeal to all stakeholders (motivate/stimulate business interest)

The over-arching aim of the organisation

Sums up core aims, business (specific?) objectives

Can be used in marketing

About the here & now

Include the overall organisation or corporate aims of the business

Question 4

The corporate objectives

Answer 4

• profit
• growth
• to survive
• operate socially

Question 5

Aims / goals

Answer 5

The specifics compared to a mission statement that’s very general

Survival = first few months/years of trading
Breaking even = not being profitable straight away
Market growth/share = dependent on type of business and market it operates in
Profit = longer term than survival

Question 6

Financial objectives

Answer 6

Liquidity

Shareholder returns

Breaking even ( survival )

Profitability ( ROCE )

Cost minimisation

Gearing (how dependent on the business’ debt)

Affected by internal (HR, marketing, Ops) & external (MCSTEEPLE) influences

Question 7

Strategic objectives

Answer 7

To achieve its main aims

A long term approach

SWOT may be undertaken to decide the most appropriate strategic objectives
⬇️
Deciding the best way forward to achieve its aims

Question 8

Tactical objectives

Answer 8

The short term objectives needed to achieve the long term strategic objectives

Involving the day-to-day activities of the business

Concentrating on how to achieving the strategic objectives

Question 9

How to set objectives

Answer 9

SMART

S pecific
=everyone understanding what the target is

M easurable

A greed
= all departments/everyone in a department agreeing
=all work together to be set and compromised
=different stakeholders having different needs they want met so it’s difficult

R ealistic
=avoid demotivation

Time
= over an achieveable time frame

Question 10

Problems with SMART

Answer 10

Not automatically going to be achieved as with anything, will take time

Not all stakeholders are happy with the decisions to the objectives or how they’ll be reached

Belief that the stakeholder approach to a business that taking into account the needs of all stakeholders when setting objectives over one group (owners) means that all will benefit in the long run

Concentrating on one stakeholder group needs can be counter-productive (alienate the other stakeholder groups

Problems arising from one objective being chosen = redundancy as a strategy and employees will not benefit from this way to earn more profit

Question 11

Internal constraints for objectives being met

Answer 11

A lack of finance to achieve the objectives

Poor communication in the business

Disputes in the workforce

Departments conflicting in the business of what they all want

Question 12

External constraints to meeting objectives set

Answer 12

The state of the economy (bad time to expand and make people redundant)

Competitor behaviour (counter-act or follow what they’re doing)

Opinions/views of external stakeholders (community, government, suppliers)

Changes in the law affecting business operation

Question 13

Corporate objectives

Answer 13

Gives a more specific idea of goals and aims than the vague mission statement

Gives the business a sense of direction

Define culture to how the business is organised and how it operates

Corporate culture linked = i.e. try make employees feel like they’re apart of a big family

Question 14

Social objectives

Answer 14

Businesses having a social conscience

(being environmentally friendly, offering sponsorship for the local community)

^^^^ ways business can satisfy their social objectives

Used as an effective marketing tool

Acting this way, they can save large amounts of money
=reducing the amount of waste they create, not paying for landfill sites, satisfies social objectives

Question 15

How do social and corporate objectives clash?

Answer 15

Corporate related to profitability for its shareholders

Spending money on social objectives adds extra costs and reduces the profits for shareholders which they won’t want

Question 16

Why do objectives need to change from time to time?

Answer 16

Tactical objectives may alter
(Priorities & circumstances changing)

=needed to implement the strategic goals + the firm’s main aims/goals

Only extreme circumstances is the strategic plan needing to change
=Ebola outbreak for travel companies reducing sales targets

^^^^^ contingency plan in these situations

Question 17

Objectives not being communicated properly

Answer 17

Objectives clearly communicated to all stakeholders

Method needs to be carefully chosen to communicate all objectives and ESPECIALLY a change in objectives

^^^^ change management

Employees resistant to change and new ideas
Reasons for the change clearly spoken about

Miscommunication = can quickly escalate into lack of trust and industrial unrest & worry