Business Objectives And Strategy

Question 1

Stakeholder

Answer 1

This is a person or party with the interest in the success of a business.

Can be internal or external

Internal
- these are found within the business e.g. employees, owners and managers

External
-these are found outside the business e.g. suppliers, lenders, customers and the local community

Question 2

Private costs and benefits

Answer 2

Costs a business pays and the benefits it gets from activities

Question 3

Social costs and benefits

Answer 3

Overall/true costs of the businesses activities taking into account of the external costs and benefits as well as private ones

Question 4

Explain the reasons for conflicts between different stakeholder groups

Answer 4

-investors may want cost-cutting, but employees want fair wages.
-Business growth may cause environmental concerns.
-Customers want low prices, but quality improvements increase costs.
-Cutting jobs to save money can create conflicts.

Question 5

Explain why a business needs to manage the conflicting objectives of its stakeholders

Answer 5

Negotiation: Find middle ground acceptable to all parties.
Transparency: Clearly communicate the reasons behind decisions.
Prioritisation: Balance stakeholder interests based on their impact.
Corporate Social Responsibility (CSR): Show commitment to ethical practices.

Question 6

Evaluate the impact on a business of different stakeholders having conflicting objectives

Answer 6

• Reduced Efficiency: Internal conflicts slow down decision-making.
• Reputational Damage: Public disputes harm brand image.
• Loss of Support: Key stakeholders may withdraw support or investment.
• Employee Morale: Conflict can lower job satisfaction and productivity.

Question 7

Recommend and justify how a business should deal with the conflicting objectives of stakeholders

Answer 7

Stakeholder Mapping: Identify and prioritize stakeholders based on influence and interest.
Engage and Consult: Regular meetings to discuss concerns.
Compromise Solutions: Balance profitability with social responsibility.
Feedback Mechanisms: Encourage open communication to resolve issues promptly.

Question 8

Explain the nature and purpose of a mission statement

Answer 8

A mission statement defines a business’s purpose/what is exists to do there core values, and approach to achieving its goals.
Purpose:
• Guides strategic planning.
• Enhances brand identity.
• Motivates employees by outlining shared goals.
Example: Nike - “To bring inspiration and innovation to every athlete in the world.”

Question 9

Evaluate the advantages and disadvantages to a business of having a mission statement

Answer 9

Advantages of a Mission Statement:
•Provides direction and purpose.
• Motivation: Inspires employees by aligning their work with a greater vision.
• Customer Connection: Helps build brand loyalty through shared values.

Disadvantages:
• Vagueness: If poorly defined, it lacks practical guidance.
• Lack of Authenticity: If not backed by actions, it damages credibility.
•Can limit innovation if too restrictive.