1.3 Business objectives

Question 1

Vision statement

Answer 1

a philosophy, vision, or set of principles which guides the direction and behaviour of an organization

Question 2

Mission statement

Answer 2

states a company’s purpose and explains why the business exists. A mission statement generally includes the business’s aims and, whether expressly stated or implied, indicates its most important values

Question 3

Business objectives

Answer 3

the articulated, measurable targets that a business must meet to achieve the aims or long-term goals of the business. It is critical that objectives are specific and measurable

Question 4

Aims of a business

Answer 4

its long-term goals (what it wants to achieve in the future) → vision statement (it’s a summary of the aims)

Question 5

Strategic objectives

Answer 5

the long-term goals of a business that indicate how the business intends to fulfill its mission. Strategic objectives usually include performance goals, such as increasing market share or improving profitability

Question 6

Tactical objectives

Answer 6

short-to-medium-term targets that, if consistently met, will help a business reach its strategic goals. Whereas strategic objectives are typically set by the board of directors with top executive management, tactical objectives are usually set by executive management working with middle-level management

Question 7

Objectives

Answer 7

medium to short-term goals that clarify how the business will achieve its aims and reach its vision → mission statement (summarizes these objectives)

Question 8

Business objectives come in 3 types

Answer 8

1. Stratetgic objectives → They are the long-term objectives set by senior managers to guide the company in the
2. Tactical objectives → the medium to short-term objectives set by middle managers (heads of departments or supervisors) to achieve the strategic objectives
3. Operational objectives → day-to-day objectives set by floor managers (and sometimes workers themselves) so that the company can reach its tactical objectives

Question 9

SMART objectives. Best business objectives are SMART

Answer 9

Specific
Measurable
Achievable
Relevant
Time-specific

Question 10

Common business objectives

Answer 10

• Growth
• Profit maximization
• Protecting shareholder value
• Ethical objectives

Question 11

The need for organizations to change objectives - internal environment

Answer 11

• Leadership
• HR
• Organization
• Product
• Finance
• Operations

Question 12

The need for organizations to change objectives - external environment using STEEPLE framework

Answer 12

Social
Technological
Environmental
Ecological
Political
Legal
Ethical

Question 13

Corporate Social Responsibility (CSR)

Answer 13

the view that businesses, rather than focusing solely on increasing shareholder value, should contribute to the economic, social and environmental well-being of society

Question 14

Companies can operationalize a commitment to CSR in many ways including:

Answer 14

• Philanthropy
• Generous salaries and wages
• Meaningful benefits such as flexitime for working parents
• Doing more for the environment than the minimum legal required by government regulations

Question 15

Why organization set ethical objectives?

Answer 15

• Building up customer loyalty
• Creating a positive image
• Developing a positive work environment
• Reducing the risk of legal redress
• Satisfying customers ever-higher expectations for ethical behaviour
• Increasing profits

Question 16

The impact of implementing ethical objectives

Answer 16

Explain each impact
- The business itself
- Competitors
- Suppliers
- Costumers
- The local community
- Government