3.7.1 Mission/Corporate Objective

• A mission statement sets out a business’ overall purpose to direct and stimulate the organisation
• Criticisms of a mission statement?

  Regarded as cynical by staff

  Are they just PR?

  Often statements of the obvious

  Too vague and general

  Not alway supported
• Influences on mission statements?


  Values of the founder

  Society’s views

  Business size
• What are the key business objectives?

  • Market share
  • Enterprise
  • Provision of service
  • Social responsibility
  • Customer satisfaction
  • Survival - depends on size of business
  • Profit - depends on size of business
• What’s the hierarchy of the objectives?

  1. Mission statement
  2. Vision statement
  3. Aims or goals
  4. Corporate objectives
• What is a vision statement?

  the overall aspiration of the business
• What are aims or goals?

  statment of what businesses intend to achieve
• what are corporate objectives?

  more precise and detailed statements of aims or goals
• What structure do corporate objectives follow?

  S - specific

  M - measurable

  A - achievable or agreed

  R - realistic

  T - timed
• What are the areas that corporate objectives cover?

  Market

  Innovaation

  Productivity

  Financial resources

  Public responsibility (ethics)
• Corporate objective are those that relate to the business as a whole
• Influences on cooperate objectives?

  ownership

  internal environment

  external environment

  short termism
• Short termism is where a business prioritises short term rather than long term performance
• Short termism emphasises certain performance measures including: return on capital employed, unit costs, productivity, revenue growth, share price, gross and operating profit
• What suffers when short termism is prioritised?

  market share

  quality

  innovation

  brand reputation

  employee skills & experience

  social responsibility & sustainability
• Why might businesses prioritise short term perfomance?

  There is an increasing focus on stock market performance

  Reliance on bonuses based on short term performances

  Frequent changed in leadership and strategy can only focus on short term
• Indicators of short termism:

  • bonuses based on short term objectives
  • low investment In research and development
  • high dividend payments over reinvestment
  • overuse of takeovers rather than natural growth
• Long term impacts of short termism?

  Market share decrease

  Fall in quality

  Innovation neglected

  Brand reputation impacted
• What is strategy?


  A long term plan of how to achieve the objectives
• What are tactics?


  Responses to short term opportunities or threats
• What is SWOT analysis?


  SWOT analysis is a strategic planning tool used to evaluate the strengths, weaknesses, opportunities, and threats of a business or project, it considers the internal and external environments of a business
• What are the pros of SWOT analysis?

  • Low cost, straight forward
  • Structureed way to look at both the internal and external environment of a business
  • A business can assess the threats it needs to protect itself against before deciding its strategy
• What are the cons of SWOT analysis?

  • It can be difficult to assess situations that could be a strength or a weakness
  • The analysis could be of little value of the points are not used further
  • Doesn't assess the importance of the factors identified
  • Can be subjective