3.1.1 Developing corporate objectives

What is the hierarchy of objectives?

What are aims and objectives?

Aims and objectives serve as a guide for a business’s overall strategy and direction, helping to focus efforts and resources towards a common purpose

Explain the aim component of the hierarchy of objectives?

• What the business is poking to achieve in the long term

• Often expressed as an overall vision and describes the business’s reason for being

Explain the mission statement component of the hierarchy of objectives?

• An expression of a business’s overall aim as well as its core values and context

• Informs the development of corporate and functional objectives

• Often expressed in inspirational terms to provide direction and a common purpose for employees

Explain the corporate objective component of the hierarchy of objectives?

• The specific performance goals set by senior management for the business to achieve over time

• Derived from he firm’s overall aim and mission statement

• Corporate objectives may focus on achieving specified levels of market share, profit, sales growth or new product / market development

Explain the functional objective component of the hierarchy of objectives?

• The day-today goals of functions or departments within the business, derived from corporate objectives

• Functional objectives must be carefully aligned across departments so that all parts of the business are working towards the shared goal

What are SMART objectives?

• Corporate and functional objectives should be

  • Specific

  • Measurable

  • Agreed

  • Realistic

  • Time-bound

Critical appraisal of mission statements and corporate aims

• Businesses need to critically assess whether corporate aims and mission statements continue to reflect their current corporate vision

• The content and expression of business aims will likely change over time to reflect changing social attitudes and norms

• Missions statements are sometimes criticised a being an exercise in public relations, that does little to inform objective - setting or promote a common organisational goal

• Revising the business aims and revisiting the mission statements,ent should be seen as a natural step for growing business