UNIT 1 ALL KEY TERMS

Question 1

What is a mission statement

Answer 1

It is a long term, breif and motivating declaration of an organization’s purpose of existence, what they do and who they are.

Question 2

What is strategic objective?

Answer 2

it is the long term goals of a business which could include profit maximization, growth and increased market share.

Question 3

What are the SMART objectives?

Answer 3

it is the framework to set clear and effective goals for a business.
1. Specific: objective must be clear and precise
2. Measurable: must be smth u can measure
3. Achievable: realistic not impossible goals:
4. Relevant: should align with overall goals
5. Time bound: should be a deadline/timeframe

Question 4

What are tactical goals?

Answer 4

Short term goals that affect units of an organization. they are specific goals that guide the daily functioning of a certain department or organization

Question 5

What is a vision statement

Answer 5

an organization’s long term aspirations and what they aim to achieve in the future

Question 6

What is a stakeholder

Answer 6

they are individuals, businesses, or groups with a vested interest in the activities and outcomes of a specific organization

Question 7

What are internal shareholders

Answer 7

they are individuals or groups who are part of the organization

eg: employees, managers, owners, directors

Question 8

Who are the internal stakeholders in an organization

Answer 8

Employees, directors, managers, owners

Question 9

What are the key interests of employees as internal stakeholders?

Answer 9

• job satisfaction
• job security
• Peter pay and bonuses
• career progression
  equal opportunity

Question 9

What are the three levels of management, and what are their roles?

Answer 9

senior: plans long term strategy
middle: runs departments and implements strategies
junior: handles day to day operations

Question 10

What rights do shareholders have as internal stakeholders?

Answer 10

dividend payments, voting right, financial return on investment

Question 11

How do employees impact the organization as internal stakeholders?

Answer 11

through their level of motivation and productivity which directly effects business performance and sucess

Question 12

What are external shareholders

Answer 12

they are individuals or organizations outside the business but with a direct interest in its actions and performance

eg: customers, suppliers and government

Question 13

What do financiers expect from a business

Answer 13

to be financially healthy, repay debts on time and provide a competitive return on investment.

Question 14

What is the role of labor union as external stakeholders

Answer 14

they provide workers right, advocate fro better pay and conditions

Question 15

What interests do suppliers have in a business?

Answer 15

securing contracts, receiving timely payments and getting fair prices for their goods/services.

Question 16

What are examples of stakeholder conflicts

Answer 16

1. employees may demand higher wages which can reduce shareholder profit
2. senior managers may demand higher bonuses which effects shareholder dividends

3, employees may invest in new technologies which can lead to Job loses

Question 17

What is franchising?

Answer 17

it is a business model where the franchisor grants the franchisee to operate under its brand, name and business system

Question 18

What is a franchisor?

Answer 18

it is the original business that owns the brand, name, product and business system. it grants the right to use its business model for franchisees

Question 19

What is a franchisee

Answer 19

an individual or business that buys the right from franchisor to operate under its brand and business system, while following franchisor rules.

Question 20

What are advantages and disadvantage of franchising

Answer 20

ADV:
1. franchising allows business to quickly expand without financial risk
2. franchisees have a ventured interest n the success of the business which leads to better management
3. franchisees cover set and operational costs which lower franchisors expenses

DISADV:
1. franchisors cannot control day to day operations of franchises
2. poor management by franchisees can harm overall brand reputation
3. franchisors earn less per unit as they share profits with franchisees via royalties.

Question 21

What are ethical objectives

Answer 21

• they are specific goals a business sets to act morally and responsibly towards stakeholders and the environment

eg: reducing carbon emission
using fair trade suppliers

Question 22

Why are advantages and disadvantages of ethical objectives

Answer 22

ADV:
1. increased customer satisfaction
2. enhanced reputation

DISADV:
1. Higher costs
2. Conflict with profit goals

Question 23

What is Ansoff Matrix

Answer 23

it is a strategic planning tool used by businesses to identify and evaluate growth strategies based on product and markets