Unit 1: 1.3 Business Objectives Flashcards
What are business objectives?
measurable results businesses hope to maintain
What is a vision statement?
statement of what the organization would like to achieve in the LONG TERM.
What is a mission statement and what does it do?
a statement of the business’ core AIMS.
phrased in a way to
- motivate employees
- stimulate interest by outside groups
*can be changed as business develops
Corporate aims
aims expressed in the mission statement
- long term
- unmeasurable and qualitative
- set by senior level directors
Corporate objectives
- SHORT TERM goals that are specific
- expressed as SMART goals
- quantifiable
Corporate strategies
long/short term plans of action to achieve the corporate objective
Targets
short term goals set for a department
The triangle levels of business strategy
Vision statement, mission statement, corporate strategies (the 4 functions), team strategies within functions of business, individual tactics based on team dept. goals.
What is the importance of objectives?
control, motivate, direct, and focus.
How is control an important aspect of objectives?
business plans + sets limits on business activity
How is motivate an important aspect of objectives?
inspire employees to reach common goal
How is direct an important aspect of objectives?
identify which aims to achieve and how to go about doing it.
How is focus an important aspect of objectives?
drives decision, making progress helps develop good teamwork
What is profit maximization?
bring in more money than you are spending
What does profit maximization do?
incentive to take risks
strategy should be long and short term
What is strategic growth
business’ intentional plans to achieve long term goals
- measured by revenue and market share
Benefits of strategic growth?
larger company =
- produce more at lower price
- market power, may have monopoly in market
- reduced risk, able to expand to other markets
The image and reputation of a business
poor image = no profit
- companies often think that customer support are not as important as increasing productivity
Advantages of ethical objectives of a company
corporate image
customer loyalty
improved employee motivation
Disadvantages of ethical objectives of a company
take advantage of consumers + workforce
financial dishonesty
high cost to act ethical
lower profit
What is corporate social responsibility (CSR)?
a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders. Classified by 3 types: free-market, altruistic, and strategic
What is free-market CSR?
just make a profit + not to solve social problems. indirectly helping society
What is altruistic CSR?
unselfish concern or devotion to the welfare of society. engage in CSR because they genuinely believe it is morally right.
What is strategic CSR?
only act socially responsible if business will benefit from the act. engage in CSR to create profitability for the firm
Why do business engage in CSR?
corporate image and reputation
What is the Ansoff Matrix?
a growth strategy tool.
Who uses the Ansoff Matrix?
sales managers
What is market penetration?
selling existing products to existing markets. One way ____ can penetrate the market is by changing the price and using more promotions.
- low risk
What is product/service development?
selling new products to existing markets. One way ____ can develop a product is to ADD VALUE.
- medium risk
What is market development?
selling existing products to new markets. One way _____ can develop the market is to merge with another company.
- medium risk
What is market share?
the % of sales revenue a company has in a market
What is the SWOT tool?
goals come from SWOT traits
THE S in SWOT
strength
CAN CONTROL/CHANGE
what you do well
The W in SWOT
weakness
CAN CONTROL/CHANGE
what you need to fix
The O in SWOT
opportunity
CAN’T CHANGE NEED TO REACT TO IT
you will take advantage of
The T in SWOT
threats
CAN’T CHANGE NEED TO REACT TO IT
you need to try avoid and can’t control it
Advantages of CSR
- improvement of image/products of the business = competitive advantage
- improved brand recognition, increasing value of the brand
- attract best motivated and efficient employees -> people prefer to work for and associate with socially aware businesses
- goodwill of stakeholders -> better relationships with them
- decrease in bad publicity and pressure group activity
OVERALL increase long-term profitability
Disadvantages of CSR
- short-run costs could increase -> fitting antipollution equipment, paying workers above poverty levels, not exploiting vulnerable groups when advertising
- shareholders may be reluctant to accept lower short-run profits
- loss of cost and price competition -> rival may not do CSR and could have lower costs
- during economic recession customers may prefer lower prices and not care about how products are made
- backlash -> may claim socially responsible but found to be doing the opposite.
Advantages of mission statements
direction
evaluate
motivation
understood by stakeholders
Disadvantages of mission statements
cost expensive to develop
not supported by all
time consuming to develop
