Unit 1.3 business objectives

Question 1

objectives

Answer 1

Objectives are the goals or targets an organization strives to achieve.
They are generally specific and quantifiable and are set in line with the organization’s mission statement.

Question 2

The nature of objectives are:

Answer 2

-Vision
-Mission
-Strategies
-Tactics

Question 3

Vision statment

Answer 3

This is an outline of an organization’s aspirations in the distant future.
Vision statements focus on the very long-term.
They are expressed as a broad view of where the company wants to be.

Question 4

Mission statements

Answer 4

This is a simple declaration of:
the underlying purpose of an organization’s existence.
its core values.
Mission statements focus on the medium to long-term.
A well-written mission statement is clearly defined and realistically achievable.

Question 5

Common business objectives:

Answer 5

Growth
Profit
Protecting shareholder value
Ethical objectives

Question 6

Objectives are important for three reasons:

Answer 6

To measure and control
To motivate
To direct

Question 7

Growth

Answer 7

This is usually measured by an increase in its sales revenue or by market share.
Growth is essential for survival in order to adapt to ever-changing and competitive business conditions.
Failure to grow may result in declining competitiveness and threaten the firm’s sustainability

Question 8

Profitability

Answer 8

Profit maximization is traditionally the main business objective of most private sector businesses.
It provides an incentive for entrepreneurs to take risks in setting up and running a business.

Question 9

Protecting shareholder value

Answer 9

This objective is about earning a profitable return for shareholders in a sustainable way.
A challenge for the directors of a firm is to balance short-term profits (in the form of dividends) with an investment in the long-term value of the company.

Question 10

Ethical objectives

Answer 10

Ethics are the moral* principles that guide decision-making and strategy.
*Morals are concerned with what is considered to be right or wrong, from the point of view of society.
Therefore, business ethics are the actions of people and organizations that are considered to be morally correct.

Question 11

Advantages of Ethical business practices

Answer 11

Improved corporate image
Increased customer loyalty
Cost-cutting
Improved staff morale and motivation

Question 12

DisAdvantages of Ethical business practices

Answer 12

Compliance costs
Lower profits
Stakeholder conflict
The subjective nature of business ethics

Question 13

Strategies

Answer 13

Strategies are plans of action to achieve the objectives of an organization.
They are:
medium to long-term goals.
expressed specifically.
Fulfilment of strategies will allow an organization to reach its objectives.

Question 14

Examples of strategic objectives

Answer 14

-Market standing:
This refers to the extent to which a business has presence in the industry.
-Image and reputation:
This stems from consumer beliefs and perceptions of a firm.
-Market share:
This is measured by expressing the firm’s sales revenue as a percentage of the industry’s total sales.

Question 15

Tactics

Answer 15

Tactics are the methods used to enact strategies of an organization.
They are short-term and frequently generated in order to enact strategies.
Fulfilment of tactics will allow an organization to perform its strategies.

Question 16

Relationships between objectives

Answer 16

Vision
The ideal situation of the business in the distant future.
Mission
The purpose and values from the mission will shape employee behaviour to turn vision into reality.
Strategies
Strategic plans fulfil the purpose stated in the mission statement.
Tactics
Tactical actions add up to forming strategic approaches.

Question 17

Corporate social responsibility

Answer 17

Corporate social responsibility (CSR) is the conscientious consideration of ethical and environmental practice related to business activity.
CSR policies and practices need regular review in order to adapt to evolving attitudes and expectations of different markets/countries.
CSR practices can provide firms with competitive advantages and long-term sustainability.

Question 18

distinguish betweentactical objectivesandstrategic objectives

Answer 18

Atactical objectiveis a short-term target that is in line with the organization’s long-term goals. Typically,tacticalobjectives have a pre-determined time frame of less than a year. An example of such an objective is to improve staff productivity at WSO by using non-financial methods such as praise to motivate staff.
In contrast, astrategic objectiveis a long-term goal used to achieve the overall strategic goal or aim of a business. For example, a strategic objective might be to improve the market share of WSO by expanding its pathways on offer. This will take a longer time to achieve than tactical objectives.

Question 19

business ethics

Answer 19

the actions of the organizations that are considered to be morally correct to employ
ethical code of practice ande upload their annual reports

Question 20

survival

Answer 20

If a business does not survive, it cannot generate revenue, serve customers, or achieve long-term success. Therefore, survival is the fundamental foundation upon which all other business objectives are built.

Question 21

sales revenue maximization

Answer 21

it directly impacts a company’s profitability and growth potential. Higher sales revenue allows a company to cover its costs, invest in research and development, expand its operations, and generate profits for shareholders.

Question 22

market standing

Answer 22

the extent that a business has presence in the industry

Question 23

image and reputation

Answer 23

they impact customer trust and market competitiveness.

Question 24

market share

Answer 24

it indicates how much of the market a company captures, influencing its competitiveness, revenue, and overall success. it reflects a company’s competitive strength and growth potential in its industry.