Aims and Objectives Flashcards
(10 cards)
Define vision statements
It is a description of what a business sets out to achieve in the medium to long term. The vision statement should provide a clear guide to senior management of the future direction of the business and help to direct strategic decision-making across the business.
Benefits of vision statements
- A clear vision can give the business a clear identity and ethos.
- Can help in setting objectives and support the business strategy.
- Focus senior managers on the tasks to achieve the vision.
- Communicates to employees how they can contribute, and can improve employee engagement.
- Commits resources to achieving the vision.
Define mission statements
A business mission statement is a description of what a business sets out to achieve in the medium to
long term. The mission statement should provide a clear guide to senior management of the future direction of the business and help to direct strategic decision-making
across the business.
Reasons for having a mission statement
- Helps to ensure that all stakeholders are clear on the purpose of the business so everyone can be focused on the same goals and objectives.
- Helps with the strategic planning since this should be the starting point.
- Gives some transparency for investors – they understand how their capital will be used.
- Helps customers understand the ethics and objectives of a company.
Long-term objectives
if businesses are aiming to grow in
the long term, they may want to:
* invest in training their staff
* building up their brands
* expanding into new markets
* putting money into developing new products.
Short-term objectives
A business that wants to maximize
profit in the short-term and is not concerned about the long term might cut back on all the above activities. In addition, it might:
* make staff redundant
* change to cheaper suppliers
* increase productivity at the expense of quality
* set a high price for maximum immediate profit
* sell assets.
Aims for-profit organisation
- survival
- profit maximisation
- sales maximisation
- growth/increase market share
- increase shareholder value
- corporate social responsibility/environmental/ ethical
- increase productivity/improve quality.
Aims of not-for-profit organisation
- to provide services
- to avoid wasteful duplication of resources where a natural monopoly exists, such as litter collection and beach cleaning
- to control strategic industries
- to prevent exploitation by monopoly suppliers
- to help people in need, whether it’s age, disability, poverty or illness
Explain business aims and objectives
Business aims are what the business wants to achieve in the future, and they tend to be quite generic and broad. They set out the goals for the business.
Business objectives are more specific and measurable targets the business will set to achieve its aims. A business may aim to increase sales revenue and will set sales targets (objectives) in order to achieve the aim
SMART objectives
> Specific - objectives should specify what the business wants to achieve. They should be clear so that all stakeholders understand what the objective is.
Measurable - objectives should be measured to make sure the objective has been achieved. This measurement should be numeric.
Achievable - are the objectives achievable and attainable? There is no point in setting an unrealistic target, this can be demotivating.
Realistic - is the business likely to achieve the objectives with the resources available?
Time limited or constrained - a time-scale needs to be set
for achieving the objectives.
SMART objectives contain the potential to focus attention and gain commitment from all levels within a business to agreed performance targets. They will also encourage teamwork, and they direct resources to where they can be most effective. Typically, businesses set objectives that relate to profit, growth, social considerations and employee welfare.
