Unit 7 Section 1: Mission,corporate Objectives And Strategy Flashcards
Vision Statement
This sets out a business’s aspirations for the future
Mission Statement
This sets out a business’s overall purpose to direct and stimulate the entire organisation
Corporate objectives
Medium to long term goals established to coordinate the business
Strategic decisions
Judgements made by senior managers that are long term, major commitment and are difficult to reverse
Short-termism
The pressure to deliver quick results to the detriment of long term development
Tactics
Short term decisions; involving few recourses
Strategy
A long term plan to achieve objectives
Functional decisions
A judgement taken by managers responsible for one aspect of a firms activities such as marketing or Human recourses
SWOT
A management technique used to identify a business’s strengths and weaknesses as well as the opportunities and threats it may face
Objective setting hierarchy
1: mission statement-what the business wants to do
2: vision statement - what the business aims to be like in the future
3: strategy - how the business will get there
4: corporate objectives- measurable targets
Influences on the mission
Values of the founders
Values of employees
What is going on in the industry in which a firm operates
Society’s views
Ownership of the firm
Peter Drucker identified 8 areas for strategic objectives driving strategic decisions
Market positioning
Innovation
Financial recourses
Physical recourses
Human recourses
Productivity
Profit
Social responsibility
Influences on strategic decisions: business ownership
Private, family owned firms have a much longer term and commuted focus from their owners
PLCs are more likely to suffer from shot- termist objectives pursued by their owners
Influences on strategic decisions: short termism
The excessive focus on short term results. It often involves decision making that involves cost - cutting and loss of jobs.
It is the pressure to deliver quick results to the detriment of the long term growth of a firm
PLCs often suffer from having the majority of shareholders who are short- termists
Influences on strategic decisions: internal environment of the business
Poor recent performance
A new leader
The firms culture (way employees behave)
Influences on strategic decision: external environment
The state of the economy
Prices on global markets particularly for commodities (oil), restricted on supply, probably always going to need, holds their value
Technology development
Patterns of migration
Strategy versus tactic
Strategy Tactic
Long term Short term
High level of Low level of recourses
recourses
Difficult to Easy to reverse
change
Usually taken Decisions junior manage
by Senior
management
SWOT analysis and strategy
. Strengths: what the firm is good at. An internal audit may be carried out. The strengths identified can be built on
. Weaknesses: the audit can also show what is lacking
. Opportunities: identified from external audit, considerations should be given as to how to take the best advantage of them
. Threats: what in its external environment will prevent the firm from achieving
SWOT benefits
Easy to follow
Low cost
Looks at both external and internal influences
Encourages planning
Can help assess risk
SWOT problems
Can take time when fast action is required
Time value
Needs to be completed by someone who has holistic view of the firm
Is very brief, more of a summary, detail may affects decisions
Can be prejudiced by the compiler
Doesn’t offer solutions
