Business 1.3

What is a hierarchy of objectives?

Vision

Mission

Strategy

Tactics

What is a vision statement

The aspirations of a business in the distant future

• very long term

• Broad view

What is a hierarchy of objectives?

Vision

Mission

Strategy

Tactics

What is a vision statement

The aspirations of a business in the distant future

• very long term

• Broad view

What is a mission statement ?

The purpose of a businesses existence

• core values

• Medium to long term

• Clearly defined

• Achievable

Common business objectives?

Growth

Profit

Protecting shareholder value

Ethical objectives

What are objectives?

The goals or targets the business thrives to achieve

Specific

Quantifiable

Set within the line of a mission statement

Why are objectives important?

To measure and control

To motivate

To direct

What is growth ?

Measured by increased revenue

Essential for survival

What happens if you dont grow?

Can result in declining competitiveness and threaten firms sustainability

What is profitability ?

Ability of the company to make money

Allows entrepreneurs to take risks

Profit maximisation

What is protecting shareholder value? And a challenge

Earning a profitable return to shareholders in a sustainable way

Challenge: directors managing short term profits

What are ethical objectives?

The moral principles that guide decision and strategy

What is right or wrong

Example of unethical business

Theranos ( medical machine and fraud )

Adv of ethical business practises

Improved corporate image

Increased customer loyalty

Cost cutting

Improved staff morale and motivation

Dis of ethical business practises ?

Compliance costs

Lower profits

Stakeholder conflict

What are strategies?

Plans of action to achieve the objectives of an organisation

Medium to long term

Specific

Examples of strategic objectives?

Market standing

Imagine and rep

Market share

What are tactics?

Methods used to enact strategies

Short term

Examples of tactical objectives?

Survival

Sales revenue maximisation

What is corporate social responsibility ?

Value/decisions and actions taken by a business to impact society in a positive way

Moral obligations to its stakeholders, community and society

Examples of CSR polices

Providing accurate product labelling

Conscious of environmental impacts

Fair emplacement practises

Contribute to communities via volunteer or charitable work

Pros of CSR policies ?

Employee engagement

Brand differentiation

Cost savings

Competitive advantage

Cons of CSR polices?

Financial costs

Greenwashing ( making false or misleading statements )