topic 7 Flashcards
the decisions making cycle (5 steps)
- set objectives
- analyse situation
- assess the resources available
- make a clear decision
- review decision
what are aims
a generalised statement of where you are heading from which objectives can be set
what is a mission statement (2)
- an attempt to put corporate aims into words that inspire. It sets out the purpose of a business existing
- an answer for their aims
what does a mission statement often include (2)
- the overriding goal, long term aim of the business and sets out of a vision for the future.
- relates to the stakeholders
4 main things that a mission model includes
- purpose
- values and beliefs (reflected in business culture)
- strategy
- standards and behaviour
4 influences on a mission statement
- values and beliefs of the founders/ owners
- the industry the business is in- market opportunities
- strategy- the medium/ long term plans of the business
- the size of the business and type of ownership
criticisms of mission statements (3)
- not always supported by actions of business
- often too vague and general
- sometimes not a true reflection of reality
5 characteristics of a good mission statement
- contains a formulation of objectives that enables progress towards them to be measured
- differentiates the business from its competitors
- defines the markets or business in which the firm wants to operate in
- is relevant to all major stakeholders- not just shareholders and managers
- excites, inspires, motivates and guides
what are corporate objectives (3)
- the company wide goals that need to be achieved to keep a business on track to achieve its aims
- medium to long term targets for the whole business
- objectives take the companies mission and turn it into something measurable
corporate objectives helps the …
different business functions to work together towards a clear target
the focus of corporate objectives (5 examples)
- profit
- growth
- survival
- cash flow
- social and ethical performance
peter drucker suggested that corporate objectives should cover 8 key areas:
- market standing
- innovation
- productivity
- physical and financial resources
- profitability
- management
- employees
- public responsibility
4 influences on a businesses corporate objectives
- the ownership of the business (shareholders who want a profit)
- the pressure for short termism
- internal factors
- external factors
influences on businesses corporate objectives
-internal factors (4)
- size
- finance
- values of leaders
- HR
influences on businesses corporate objectives
-external factors (5)
- economy
- government policy/ laws
- trends
- competition
- technology
