Unit 1: 1.3 Business Objectives

Question 1

What are business objectives?

Answer 1

measurable results businesses hope to maintain

Question 2

What is a vision statement?

Answer 2

statement of what the organization would like to achieve in the LONG TERM.

Question 3

What is a mission statement and what does it do?

Answer 3

a statement of the business’ core AIMS.
phrased in a way to
- motivate employees
- stimulate interest by outside groups
*can be changed as business develops

Question 4

Corporate aims

Answer 4

aims expressed in the mission statement
- long term
- unmeasurable and qualitative
- set by senior level directors

Question 5

Corporate objectives

Answer 5

• SHORT TERM goals that are specific
• expressed as SMART goals
• quantifiable

Question 6

Corporate strategies

Answer 6

long/short term plans of action to achieve the corporate objective

Question 7

Targets

Answer 7

short term goals set for a department

Question 8

The triangle levels of business strategy

Answer 8

Vision statement, mission statement, corporate strategies (the 4 functions), team strategies within functions of business, individual tactics based on team dept. goals.

Question 9

What is the importance of objectives?

Answer 9

control, motivate, direct, and focus.

Question 10

How is control an important aspect of objectives?

Answer 10

business plans + sets limits on business activity

Question 11

How is motivate an important aspect of objectives?

Answer 11

inspire employees to reach common goal

Question 12

How is direct an important aspect of objectives?

Answer 12

identify which aims to achieve and how to go about doing it.

Question 13

How is focus an important aspect of objectives?

Answer 13

drives decision, making progress helps develop good teamwork

Question 14

What is profit maximization?

Answer 14

bring in more money than you are spending

Question 15

What does profit maximization do?

Answer 15

incentive to take risks
strategy should be long and short term

Question 16

What is strategic growth

Answer 16

business’ intentional plans to achieve long term goals
- measured by revenue and market share

Question 17

Benefits of strategic growth?

Answer 17

larger company =
- produce more at lower price
- market power, may have monopoly in market
- reduced risk, able to expand to other markets

Question 18

The image and reputation of a business

Answer 18

poor image = no profit
- companies often think that customer support are not as important as increasing productivity

Question 19

Advantages of ethical objectives of a company

Answer 19

corporate image
customer loyalty
improved employee motivation

Question 20

Disadvantages of ethical objectives of a company

Answer 20

take advantage of consumers + workforce
financial dishonesty
high cost to act ethical
lower profit

Question 21

What is corporate social responsibility (CSR)?

Answer 21

a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders. Classified by 3 types: free-market, altruistic, and strategic

Question 22

What is free-market CSR?

Answer 22

just make a profit + not to solve social problems. indirectly helping society

Question 23

What is altruistic CSR?

Answer 23

unselfish concern or devotion to the welfare of society. engage in CSR because they genuinely believe it is morally right.

Question 24

What is strategic CSR?

Answer 24

only act socially responsible if business will benefit from the act. engage in CSR to create profitability for the firm

Question 25

Why do business engage in CSR?

Answer 25

corporate image and reputation

Question 26

What is the Ansoff Matrix?

Answer 26

a growth strategy tool.

Question 27

Who uses the Ansoff Matrix?

Answer 27

sales managers

Question 28

What is market penetration?

Answer 28

selling existing products to existing markets. One way ____ can penetrate the market is by changing the price and using more promotions. - low risk

Question 29

What is product/service development?

Answer 29

selling new products to existing markets. One way ____ can develop a product is to ADD VALUE. - medium risk

Question 30

What is market development?

Answer 30

selling existing products to new markets. One way _____ can develop the market is to merge with another company. - medium risk

Question 31

What is market share?

Answer 31

the % of sales revenue a company has in a market

Question 32

What is the SWOT tool?

Answer 32

goals come from SWOT traits

Question 33

THE S in SWOT

Answer 33

strength CAN CONTROL/CHANGE what you do well

Question 34

The W in SWOT

Answer 34

weakness CAN CONTROL/CHANGE what you need to fix

Question 35

The O in SWOT

Answer 35

opportunity CAN'T CHANGE NEED TO REACT TO IT you will take advantage of

Question 36

The T in SWOT

Answer 36

threats CAN'T CHANGE NEED TO REACT TO IT you need to try avoid and can't control it

Question 37

Advantages of CSR

Answer 37

- improvement of image/products of the business = competitive advantage - improved brand recognition, increasing value of the brand - attract best motivated and efficient employees -> people prefer to work for and associate with socially aware businesses - goodwill of stakeholders -> better relationships with them - decrease in bad publicity and pressure group activity OVERALL increase long-term profitability

Question 38

Disadvantages of CSR

Answer 38

- short-run costs could increase -> fitting antipollution equipment, paying workers above poverty levels, not exploiting vulnerable groups when advertising - shareholders may be reluctant to accept lower short-run profits - loss of cost and price competition -> rival may not do CSR and could have lower costs - during economic recession customers may prefer lower prices and not care about how products are made - backlash -> may claim socially responsible but found to be doing the opposite.

Question 39

Advantages of mission statements

Answer 39

direction evaluate motivation understood by stakeholders

Question 40

Disadvantages of mission statements

Answer 40

cost expensive to develop not supported by all time consuming to develop