3.1.1 - Corporate Objectives

Question 1

What is a Mission Statement

Answer 1

• A mission statement is a qualitative statement of an organisations aims
• usually a short way of a business expressing their main intent
• Nike’s mission statement is “To bring inspiration and innovation to every athlete* in the world.“

Question 2

What is a disadvantage of a mission statement

Answer 2

• Critics say that mission statements are just a public relations tool

Question 3

What are corporate objectives

Answer 3

• Corporate objectives should flow from the mission statement and corporate vision
• Usually set by senior management for the whole company
• Aimed at satisfying the shareholders so may be related to profit or dividends:
• Increase operating profit 4% over the next 24 months
• Increase dividends by 2% over the next three years
• Objectives need to be SMART (see next slide)

Question 4

What are SMART objectives

Answer 4

• Specific; This means there must be a clear definition, often including a number
• Measurable; This means the achievement can be checked
• Achievable; This means you can achieve your target but you may need to stretch yourself
• Realistic; This means that the target should sensible so that you can achieve it
• Time-related; this means setting a date for achievement or review

Question 5

what are department objectives

Answer 5

• In most businesses they divide up the work into departments or functions; sales, marketing, human resources, operations and finance
• Each department will set their own objectives which should flow from the corporate objectives
• For example, the marketing department may aim to increase sales 3% each quarter, or increase sales revenue 2% each year
• This will help the business to achieve its corporate objectives of more dividends for the shareholders

Question 6

What is the purpose of a mission statement

Answer 6

• A mission statement can define the essence or purpose of the
  business in just a few sentences
• It is the purpose of the business that is key in the statement

Question 7

What are the uses of mission statements

Answer 7

A. Focus; helps to focus and involve all employees in the business
B. Profitability; helps to motivate employees to become more efficient which could have an impact on profitability
C. Identity; helps to create an identity in a competitive marketplace

Question 8

What are limitations of mission statements

Answer 8

A. Can be unrealistic and over optimistic
B. Can be a waste of management time and resources
C. Can lead to conflicts and inconsistencies when not properly written
D. Can be ambiguous
E. Can become obsolete as the business develops but the mission statement remains the same (perhaps due to a merger or change of product, iPod to iPhone for example)

Question 9

What are aims / objectives

Answer 9

Aims are long term, and objectives are broken down aims for short term

Question 10

What is a stakeholder

Answer 10

• Anyone entity who has a stake. in the business