T44 - Corporate objectives

Question 1

Mission statement

Answer 1

A brief statement written by a business describingits purpose and objectives

Question 2

Reasons for mission statement

Answer 2

• To promise customers what the business is striving for
• To motivate staff and bring them tgt with a common goal

Question 3

Limitations of mission statement

Answer 3

• Can be too long, boring customers
• Firm has to keep actions in line with the statement, likely increasing costs
• Customers lose faith if not upheld by staff

Question 4

Corporate objectives

Answer 4

Objectives of a medium-large sized business

Question 5

SMART

Answer 5

• Acronym that describes what a good corporate objective must be.
• Specific, measurable, agreed, realistic, timed

Question 6

Departmental/functional objectives

Answer 6

Day-to-day goals set by a department to meet corporate objectives

Question 7

Objectives hierarchy

Answer 7

Mission -> Corporate -> Functional -> Unit/team -> Individual

Question 8

Benefits of objectives hierarchy

Answer 8

• Improved communication within the firm, boosting productivity
• Clear direction so staff knows priorities, less mistakes

Question 9

Drawbacks of objectives hierarchy

Answer 9

• Cost of coming up with objectives
• High output/costs to meet goals, could instead be used on production

Question 10

Small vs large firms

Answer 10

• Small = Wide variety of objectives, like breaking even or hiring more specialised staff
• Large = Mainly financial as they need to pay dividends to shareholders