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Business HL > Unit 1 - 1.3 Business objectives > Flashcards

Unit 1 - 1.3 Business objectives Flashcards

1
Q

Hierarchy of objectives

A

Vision
Mission
Strategies
Tactics

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2
Q

How does time relate to the hierarchy of objectives

A

Top: very long term
Bottom: very short term

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3
Q

How does specificity relate to the hierarchy of objectives?

A

Top: broadly expressed ideas
Bottom: very specific

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4
Q

Objectives

A

Specific, measurable, achievable, relevant, and time-bound targets (SMART targets) that give targeted direction to a business for the future

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5
Q

SMART

A

Specific
Measurable
Achievable
Relevant
Time-bound

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6
Q

Business aims

A

The long-term aspirations of an organisation (realised through objectives)

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7
Q

Vision

A

An outline of an organisation’s aspirations in the distant future
* focus on the very long-term and are broad statements

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8
Q

Mission

A

A simple declaration of the underlying purpose of an organisation’s existence and its core value
* focus on the medium to long-term and are well written, clearly defined and achievable

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9
Q

Mission or vision:
Aspirational (i.e. “What do we want to
become?”).

A

Vision

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10
Q

Mission or vision: Does not specify actual targets to
achieve

A

Vision

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11
Q

Mission or vision: Declaration of purpose (i.e. “What is our
business?”).

A

Mission

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12
Q

Mission or vision: Infrequently updated

A

Vision

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13
Q

Mission or vision: Immediate time period

A

Mission

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14
Q

Common business objectives

A

GPPE
* growth
* profitability
* protection of shareholder value
* ethical objectives

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15
Q

Why is growth an objective to businesses?

A

Growth is essential for
survival in order to adapt to
ever-changing and
competitive business
conditions
* failure can lead to declining competitiveness and threaten firm’s sustainability
* usually measured by an increase in sales revenue or market share

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16
Q

Profit equation

A

Total revenue - total cost

17
Q

Revenue equation

A

Price x quantity

18
Q

Total costs equation

A

Total fixed cost + total variable cost

19
Q

Market share equation

A

(total product sold / total product sold in market) x 100

20
Q

Why is profitability an objective to businesses?

A

Provides incentive for entrepreneurs to take risks due to personal gain
* it is traditionally the main objective

21
Q

Why is protecting shareholder value an objective to businesses?

A

To earn profitable return for shareholders in a sustainable way
* challenge for directors (shareholders) is to balance short-term profits (dividends) with investments in long-term value of the company

22
Q

Why is ethical consideration an objective to businesses?

A

Corncerned with societal perspectives on what ir morally correct
* focused on due to reputation and personal responsibility towards the moral principles that guide decision-making

23
Q

Advantages of ethical objectives (name 3)

A
  • Improved corporate image
  • Increased customer loyalty
  • Cost-cutting
  • Improved staff morale and motivation
24
Q

Disadvantages of ethical objectives (name 3)

A
  • Compliance costs (taxes and addional costs to adhere to regulations)
  • Lower profits
  • Stakeholder conflicts (difference in what notion they support i.e. profit maximisation or health and safety)
  • Subjective nature
25
Q

Startegies

A

Plans of action to achieve the objectives of an organisation
* medium to long-term goals and expressed specifically
* their fulfillment will allow reach of objectives

26
Q

Examples of strategic objectives (name and define 3)

A
  • Market standing: the extent to which a business has presence in the industry
  • Image and reputation: consumer beliefs and perception of firm
  • Market share: firm’s sale revenue as a percentage of industry’s total sales
27
Q

Corporate social responsibility (CSR)

A

The consciencious consideration of ethical and environmental practice related to business activity
* policies require regular review to adapt to evolving attitudes and expectactions of different market/time/country
* can provide competitive advantages and long-term sustainability

28
Q

Examples of CSR (4)

A
  • Provide accurate product labelling/description
  • Be conscious of impacts to the environment
  • Adhere to fair employment practices
  • Contribute to communities via volunteer or charitable work
29
Q

Theranos - ethical objectives case study

A

2003 - blood testing company claimed to have invented medical machine that could detect diseases using one drop of blood
* 2016 - firm shut down due to investigation which showed machine has technological flaws
* produced widespread innacurate data
* 2018 - CEO and COO were charged with massive fraud by authorities

30
Q

Stores in COVID-19 - Tactics case study

A

Groery stores during COVID
* stop-and-go system or delivery services were implemented
* some transitioned from cafés to grocery stores
* many had to let go of workers

31
Q

Misleading food labels - CSR case study

A

Use of “natural” label on food products without standardised definition
* many contain artificial ingredients
* consumers (USA) are asking for ban of label due to interpretive nature

32
Q

Recycling furniture at IKEA - CSR Case study

A

Transition to a CBM system
* initially 200 million physical copies of catalogue published in 2016
* transitioned to online catalogue in most countries
* reuse, buy back thousands of used products across 27 countries
* in order to keep them in circulation for as long as possible

33
Q

Wage theft at Funtea - CSR case study

A

Coworker assaulted (slapped and kicked) after confronting boss about underpayment ($10 /day) - 2021 Australia?
* video leaked and viewed by over 50 million
* assailant given assault conviction at court
* fully paid back $672 underpayment
* in response: widespread underpayment and exploitation of workers in Chinatown was discovered

34
Q

Community engagement by Nissan - CSR case study

A

Nissan and Habitat for Humanity refurbished/built more than 300,000 humes for families in need
* with over $25 million private money from donations
* aims to provide affordable, safe and decent housing for all

Business HL (4 decks)

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