1.3 Organisational objectives

Question 1

Vision statement

Answer 1

outlines an organisation’s aspirations in the distant future

Question 2

Mission statement

Answer 2

a simple declaration of the underlying purpose of an organisation’s existence and its core values

Question 3

What are the main differences between vision and mission statements?

Answer 3

• vision statement - “what do we want to become?”
  mission statement - “what is our business?”
• vision statements are focused on the very long term, whereas mission statements can focus on medium or long term
• mission statements are more frequently updated
• vision statements do not have actual targets that must be achieved; allow people to see what could be
• mission statements outlines the values of the business

Question 4

What are the steps in setting mission statement?

Answer 4

1. define the organisation
2. outlines what the organisation aspires to be
3. limited enough to exclude certain ventures
4. broad enough to allow for growth in a creative or innovative way
5. distinguishes the organisation from others
6. serves to evaluate current business activities
7. phrased clearly so that it is understood by all

Question 5

Aims

Answer 5

general and long-term goals of an organisation

Question 6

Objectives

Answer 6

short-to-medium term and specific targets an organisation sets in order to achieve its aims

Question 7

Why are organisational aims and objectives important?

Answer 7

to measure and control
to motivate
to direct

Question 8

Strategies

Answer 8

the plans of action to achieve the strategic objectives of an organisation

Question 9

Tactics

Answer 9

short-term methods used to achieve an organisation’s tactical objectives

Question 10

What are the several levels of business strategy?

Answer 10

operational strategies - day-to-day methods used to improve the efficiency of an organisation
generic strategies - affect the business as a whole
corporate strategies - targeted at the long term goals of a business

Question 11

What are some differences between aims and objectives?

Answer 11

aims: what the business wants to achieve; short-term goals that affect a section of the organisation; objectives: what the business has to do to achieve the aims
aims: not time-bound; short-term goals that affect a section of the organisation: time-bound
aims: vague; objectives: specific measurable
aims: what a business wants to happen; objectives: what a business needs to happen
aims: set by senior leaders; objectives: set by managers or subordinates

Question 12

Tactical objectives

Answer 12

short-term goals that affect a section of the organisation

Question 13

Examples of strategic objectives

Answer 13

survival

sales revenue maximisation

Question 14

Strategic objectives

Answer 14

longer-term goals of a business

Question 15

Examples of strategic objectives

Answer 15

profit maximisation
growth
market standing
image and reputation

Question 16

Internal factors that cause aims and objectives to change

Answer 16

corporate culture
type and size of organisation
private versus public sector organisations
age of the business
finance
risk profile
crisis management

Question 17

External factors that cause aims and objectives to change

Answer 17

state of the economy
government constraints
the presence and power of pressure groups
new technologies

Question 18

Ethics

Answer 18

moral principles that guide decision-making and strategy

Question 19

Morals

Answer 19

what is considered to be right or wrong, from society’s point of view

Question 20

Examples of ethical objectives

Answer 20

reducing pollution by using more environmentally friendly production process
disposal of waste in an environmental manner
increased recycling of materials

Question 21

Examples of unethical behaviour

Answer 21

financial dishonesty
environmental neglect
exploitation of the workforce
exploitation of suppliers
exploitation of consumers

Question 22

Corporate social responsibility (CSR)

Answer 22

moral actions that benefit their stakeholders such as their employees and the local community

Question 23

What are the three attitudes in CSR?

Answer 23

The self-interest (non-compliance) attitude
The altruistic attitude
The strategic attitude

Question 24

The self-interest (non-compliance) attitude

Answer 24

in order to gain profit, firms become more efficient and prosperous, thus helping the society indirectly.

Question 25

The altruistic attitude

Answer 25

humanitarian and unselfish behaviour

Question 26

The strategic attitude

Answer 26

businesses are only socially responsible to become more profitable; sees CSR as a long-term growth.

Question 27

How can a business adapt to meet their social responsibilities?

Answer 27

Provide accurate information and labelling Adhering to fair employment practices Having consideration for the environment Active community work

Question 28

What are the factors that decide whether a business is socially responsible?

Answer 28

The involvement, influence and power of various stakeholders, such as pressure groups Corporate culture and attitudes towards CSR Societal expectations Exposure and pressure from the media Experience Compliance costs Laws and regulations

Question 29

Code of practice

Answer 29

documented beliefs and philosophies of the business

Question 30

Advantages of ethical behaviour

Answer 30

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

Question 31

Disadvantages of ethical behaviour

Answer 31

compliance costs lower profits stakeholder conflict ethics and CSR are subjective

Question 32

SWOT analysis

Answer 32

a tool that helps a business with decision-making. | strengths, weaknesses, opportunities, threats

Question 33

What can SWOT be used to provide a good framework for?

Answer 33

``` Competitor analysis Assessing opportunities Risk assessment Reviewing corporate strategy Strategic planning ```

Question 34

Advantages of SWOT analysis

Answer 34

Quite simple and quick to complete Helps to determine the organisation's position in the market - long-term survival Encourages foresight and proactive thinking in the decision-making process Help reduce the risks of decision-making by demanding objective and logical thought processes Wide range of applications

Question 35

Disadvantages of SWOT analysis

Answer 35

Simplistic, not too detailed Business environment is always changing - limited use Only useful if decision-makers are open about weaknesses and are willing to act upon them Not typically used in isolation

Question 36

Ansoff Matrix

Answer 36

An analytical tool which usually aids a business in determining its product and market growth.

Question 37

What are four alternatives of marketing strategies?

Answer 37

Market penetration Market development Product development Diversification