3.1.1 Corporate Objectives

Question 1

What’s a mission statement??

Answer 1

Formal summary of the aims and values of an organisation

Question 2

What’s the hierarchy of business objectives??

Answer 2

Mission statement and general aims -> corporate objectives -> department objectives

Question 3

What are 2 benefits of mission statements??

Answer 3

• Used to communicate nature of organisation to stakeholders
• Focus strategies and energy of business in specific direction

Question 4

What are 3 drawbacks of mission statements??

Answer 4

• Could be biased from business POV because they write it
• Critics say it’s just a public relations tool so not useful as basis for corporate objectives
• Customers may not even know what the statement is (waste of time)

Question 5

What are the aims of corporate objectives??

Answer 5

To satisfy shareholders (so may be related to profits or dividends).
They should flow from the mission statement to the corporate vision

Question 6

What are department objectives??

Answer 6

In larger businesses, they might divide the work into departments or functions.
Each department sets its own objective that flows from the corporate objectives.

Question 7

What’s the purpose of a mission statement??

Answer 7

• To define the essence of the business
• Lets the public know the product it provides and why

Question 8

What are the 3 uses of mission statements??

Answer 8

• Focus (focus and involve all employees)
• Profitability (motivate efficiency in employees)
• Identity (creates identity in competitive marketplace)

Question 9

What are 3 limitations of mission statements??

Answer 9

• Can be unrealistic and over optimistic
• Can be waste of time and resources
• Can become obsolete as business develops but statement doesn’t change

Question 10

Who is motivated by mission statements (if written correctly)??

Answer 10

Employees, it helps them to focus and give all departments the same aims of direction