Unit 7

Question 1

What is a mission statement?

Answer 1

A qualitative statement setting out a business’ overall purpose and focus or its reason for existence.

Question 2

Why is a mission statement important?

Answer 2

• It communicates the purpose and values of an organisation to its stakeholders.
• It informs the strategy adopted by an organisation.
• It enables measurable goals and objectives to be identified.

Question 3

Factors that can influence the mission of a business

Answer 3

• The values of the founder(s) of the business, e.g. Elon Musk’s ambitions & drive: to revolutionise transportation both on Earth, through electric car maker Tesla and in space, via rocket producer SpaceX.
• A business’ strengths (what the business is good at) e.g. its strengths could be distinctive competences e.g. Apple’s key strength is its ability to be the first to introduce some of the most innovative products that change the world.
• The extent to which a business demonstrates social responsibility in its actions e.g. Lush’s mission statement: to make their products by hand with only vegetarian ingredients and little-to-no preservatives.
• The industry the business is operating in e.g. Chanel’s mission statement: to be the ultimate house of luxury, defining style and creating desire, now and forever.

Question 4

What are corporate objectives?

Answer 4

Corporate objectives are the targets that a business wants to achieve within a given period of time. They are normally medium- to long-term.
- To be effective, corporate objectives should always be SMART.
- Once a business has determined its mission it can set its corporate objectives.
- The corporate objectives will inform decision-making.

Question 5

Recall some common corporate business objectives

Answer 5

• Survival
• Profit
• Growth
• Cash flow
• Ethics
• Social