Unit 7 Section 1: Mission,corporate Objectives And Strategy

Question 1

Vision Statement

Answer 1

This sets out a business’s aspirations for the future

Question 2

Mission Statement

Answer 2

This sets out a business’s overall purpose to direct and stimulate the entire organisation

Question 3

Corporate objectives

Answer 3

Medium to long term goals established to coordinate the business

Question 4

Strategic decisions

Answer 4

Judgements made by senior managers that are long term, major commitment and are difficult to reverse

Question 5

Short-termism

Answer 5

The pressure to deliver quick results to the detriment of long term development

Question 6

Tactics

Answer 6

Short term decisions; involving few recourses

Question 7

Strategy

Answer 7

A long term plan to achieve objectives

Question 8

Functional decisions

Answer 8

A judgement taken by managers responsible for one aspect of a firms activities such as marketing or Human recourses

Question 9

SWOT

Answer 9

A management technique used to identify a business’s strengths and weaknesses as well as the opportunities and threats it may face

Question 10

Objective setting hierarchy

Answer 10

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

Question 11

Influences on the mission

Answer 11

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

Question 12

Peter Drucker identified 8 areas for strategic objectives driving strategic decisions

Answer 12

Market positioning

Innovation

Financial recourses

Physical recourses

Human recourses

Productivity

Profit

Social responsibility

Question 13

Influences on strategic decisions: business ownership

Answer 13

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

Question 14

Influences on strategic decisions: short termism

Answer 14

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

Question 15

Influences on strategic decisions: internal environment of the business

Answer 15

Poor recent performance

A new leader

The firms culture (way employees behave)

Question 16

Influences on strategic decision: external environment

Answer 16

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

Question 17

Strategy versus tactic

Answer 17

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

Question 18

SWOT analysis and strategy

Answer 18

. 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

Question 19

SWOT benefits

Answer 19

Easy to follow

Low cost

Looks at both external and internal influences

Encourages planning

Can help assess risk

Question 20

SWOT problems

Answer 20

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