Theme 3

• What is an aim?

  What the business is looking to achieve in the long term. Often expressed in as an overall vision and describes the businesses reason for being e.g. Macmillan cancer support 'To do whatever it takes to support people living with cancer.'
• What is a mission statement?


  Declares the businesses purpose but it may also reflect its goals and values
• Why is a mission statement good?

  When everything else fails a good mission statement can clarify the direction a business should take by reminding the the owners and directors of the reason why the business exists
• What are some reasons a business may share and form a mission statement?

  A commitment to customers - a promise to customers on what they can expect the business to strive for

  
  

  Can be used to bring a company's workforce together with a shared purpose - many successful businesses have a mission statement that employees believe in
• Market share - increase market power - reduce competition - gain economies of scale - lower prices - attract customers away from competitors
• Economies of scale - larger firms can spread fixed costs over greater volume of production - lower average cost per unit produced
• Diseconomies of scale - large size may lead to bureaucracy, lack of flexibility, poor communication between departments, high management salaries
• What are corporate objectives?


  Target set for the whole firm to reach within a given time period
• What does SMART stand for?

  Specific, Measurable, Agreed, Realistic, Time specific
• What is specific?


  That the objective sets out clearly what the business is aiming to achieve and should refer to a particular aspect or function of the business
• What is measurable?


  Involves evidence to demonstrate whether or not the objectives have actually been achieved - most corporate objectives will have a financial or quantifiable element because it makes it easier to measure the success of that objective
• What is agreed?


  Implies that everyone is responsible for achieving the objective has agreed with it and understands what it means for them. Without an objective being agreed by all those involved - there will be no motivation or commitment to achieve it
• What is realistic?


  Ensures that the objective can be met with the resources available and the prevailing market conditions. If an objective is unrealistic people will ignore it - failing to achieve the business is likely to have a negative effect on the business
• What is Time specific?

  Gives the stated time frame within which the objectives are to be achieved - all objectives are to have an end point to ensure urgency and a point where the objective can be assessed