1.3

• Vision statement

  A declaration of a business's aspirations - a picture of success for the business, usually not too realistic or specific
• Mission statement

  A declaration of a business's purpose - the reason for being of the business, can be revised over time
• Google's vision and mission statements

  • Vision: To provide access to the world's information in one click

  Mission: To organize the world's information and make it universally accessible and useful
• Pros of vision and mission statements

  • Serve as assessment criteria for business decisions and objectives

  Motivate staff and attract customers
• Cons of vision and mission statements

  • Can be vague and unclear

  Often made for public relations reasons rather than to guide decision making
• Goals

  What a business wants to achieve in the long term
• Objectives

  Clearly defined short-term or medium-term tasks that a business sets to achieve its goals
• Strategies

  Medium-term or long-term plans, methods, approaches, and schemes used to achieve goals and objectives
• Tactics

  Short-term or medium-term actions that need to be taken to achieve objectives
• Hierarchy of business decision making

  • Goals

  Objectives

  Strategies

  Tactics
• Levels of management

  • Strategic (senior management)

  Tactical (middle management)

  Operational (junior management)
• Corporate strategy


  Determines the market in which the business operates
• Generic strategy

  Determines methods of achieving competitive edge
• Operational strategy

  Determines what the company needs to do on a day-to-day basis to make strategies and objectives happen
• Common business objectives


  • Profit

  Growth

  Shareholder value

  Ethical objectives
• Profit


  The difference between revenues and costs
• Growth


  Achieving an increase in market share, total revenue, profit, capital employed, size of workforce, or volume of output
• Shareholder value


  What shareholders get through the company's ability to increase market capitalization and share price, and/or pay dividends
• sarily have to be larger in size like if you move in move to a larger office this is not the only example of growth or if you hire more people no there are plenty of ways more about that in 1.5
• Shareholder value


  What shareholders get through companies ability to increase market capitalization and thus share price and/or dividends through increasing the profits
• Ways to increase shareholder value

  • Dividends
  • Increasing share price
• Dividends is a portion of profits that shareholders get depending on how many shares they have depending on their stake in the company
• Not all companies are obliged to pay dividends
• The basic investment strategy is to buy low and sell high
• When google went public in their ipo one share was 85, now it's times more than that
• What shareholders want is to increase the share price so that they can sell their shares or multiply their investment later on
• Both dividends and increasing share price relate to increase in profits
• Ethical objectives


  Tasks or targets that go beyond profit making and are in line with moral behavior, sustainability and CSR
• Ethical objectives would be the main objectives for non-profit organizations or for for-profit organizations that are social enterprises
• Strategic objectives are those objectives that are set on strategic level and apply to the entire company
• Tactical objectives are objectives about how to make strategic objectives happen and they are set by middle management on the tactical level
• Operational objectives are about day-to-day routine short-term plans
• SLAP


  Stakeholders, Long-term and short-term implications, Advantages and disadvantages, Priorities
• An example of a strategic objective could be by the end of the year achieve 35% market share
• An example of a tactical objective could be determine the appropriate price range for all products
• An example of an operational objective could be embed report feedback feature into all apps
• Corporate Social Responsibility (CSR) is a commitment to benefiting or at least not harming the society and environment that is achieved through certain ethical objectives
• CSR is not a legal obligation but a positive trend that businesses nowadays set
• The term CSR appeared in the mid-1960s and has evolved over time
• Stages of CSR evolution

  • Charity
  • Generic strategy
  • Underpins all levels of the business