Business Objectives & Strategy (YR 12 topics only)

What are organisational aims?

Long-term intentions or broad goals of a business.

What are corporate/business objectives?

Targets set to achieve the overall aims of the organisation.

What are strategic objectives?

Long-term, organisation-wide goals that guide overall direction.

What are tactical objectives?

Shorter-term, departmental goals to support strategic aims.

What are operational objectives?

Day-to-day goals to ensure effective functioning of the business.

Why are SMART objectives important?

They ensure objectives are clear, measurable, achievable, relevant, and time-bound, which benefits performance and stakeholder clarity.

What is the hierarchy of objectives?

A structure showing how day-to-day tasks (operational) support tactical, strategic, and corporate goals.

What is the importance of setting aims and objectives?

Provides direction, motivation, performance measurement, and helps communicate vision to stakeholders.

How does the business sector affect aims and objectives?

Different sectors (e.g., private vs public) have different priorities like profit vs service provision.

How can objectives be communicated?

Through meetings, mission statements, internal systems, and formal documentation.

What are the consequences of miscommunicating objectives?

Leads to confusion, inefficiency, poor performance, and stakeholder dissatisfaction.

How can objective communication be improved?

Use clear language, regular updates, visual aids, and stakeholder involvement.

Why might a business change its objectives?

Due to changes in market conditions, stakeholder needs, legal requirements, or strategic direction.

How should businesses implement new objectives?

Through consultation, training, updated planning, and clear communication.

What is a stakeholder?

Any person or group with an interest in or affected by a business.

Who are internal stakeholders?

Owners, managers, employees.

Who are external stakeholders?

Customers, suppliers, government, local communities, creditors.

What are the objectives of internal stakeholders?

Profit, job security, growth, fair pay, promotion.

What are the objectives of external stakeholders?

Quality, price, ethical behaviour, timely payments, compliance.

Why do stakeholder conflicts occur?

Different groups may have opposing interests (e.g., profit vs fair pay).

Why must businesses manage stakeholder conflict?

To avoid reputational damage, legal issues, and inefficiencies.

How do conflicting stakeholders impact a business?

They can delay decisions, cause tension, and reduce overall performance.

How should businesses manage conflicting stakeholder objectives?

Through compromise, stakeholder prioritisation, communication, and CSR strategies.

How do stakeholders influence a business?

They can shape its aims, decisions, operations, and performance through feedback and pressure.

How do business decisions impact stakeholders?

Decisions on pricing, location, employment, or CSR directly affect stakeholder satisfaction and outcomes.

What is a mission statement?

A short declaration of an organisation's core purpose and values.

Why have a mission statement?

It communicates vision, guides strategy, and motivates employees.

What are the pros of a mission statement?

Clarifies purpose, inspires commitment, enhances brand image.

What are the cons of a mission statement?

May be vague, ignored, or misaligned with actions.

How can changing a mission statement impact a business?

Can confuse stakeholders or re-align the business positively if communicated well.

What is corporate social responsibility (CSR)?

Commitment to ethical behaviour and contributing to economic development and social good.

What conflict exists between CSR and profit?

CSR may increase costs, reducing short-term profit but improving long-term sustainability.

Why is CSR important to stakeholders?

It builds trust, reputation, and employee satisfaction; appeals to ethical consumers.

What are the pros of CSR to a business?

Improves brand loyalty, attracts talent, reduces regulatory risk.

What are the cons of CSR to a business?

May be costly, hard to measure ROI, or used as PR without real change.

How can a business improve its CSR profile?

By sourcing ethically, reducing waste, engaging communities, and publishing CSR reports.

How does CSR affect stakeholders?

Positively impacts employees, communities, and consumers; may worry shareholders over costs.

What is the relationship between objectives, strategy, and tactics?

Objectives guide strategy (overall plan), and tactics are short-term actions to implement the strategy.

How can a business evaluate a strategy?

By assessing alignment with objectives, performance data, stakeholder feedback, and market conditions.

How can a business change its strategy?

Through market analysis, reallocation of resources, and leadership changes.

How does changing strategy impact stakeholders?

Affects job roles, expectations, profits, customer experience, and brand.

Why is implementation strategy important?

It ensures that plans are actionable, measurable, and effectively communicated.

How does a good strategy benefit stakeholders?

Increases efficiency, profitability, and stakeholder confidence.

How do you recommend a strategy for a business?

Analyse current position, set goals, choose options, justify based on data and stakeholder needs.

What is a business plan?

A document setting out the business's goals and how they'll be achieved.

What does a business plan typically include?

Executive summary, objectives, market analysis, marketing strategy, operations, finance, and risk assessment.

What are the benefits of a business plan?

Clarifies vision, attracts investment, reduces risk, sets targets.

What are the drawbacks of a business plan?

Time-consuming, based on assumptions, may restrict flexibility.

Why is a business plan important to stakeholders?

It provides confidence, direction, and accountability for investors, staff, and partners.

What is the 'Plan-Do-Review' cycle?

A process of setting plans, implementing them, and evaluating outcomes to improve.

How does the 'Plan-Do-Review' cycle help performance?

It encourages continuous improvement and learning from past results.

What is the value of strategic reviews?

Ensures objectives remain relevant and helps adapt to changes in the business environment.

What is risk in business?

The possibility of loss or failure when making decisions.

What is reward in business?

The gain (e.g., profit, growth) a business achieves by taking risks.

How are risk and reward related?

Higher risk often comes with potential for higher reward, but also greater chance of failure.

What is quantifiable risk?

Risks that can be measured or estimated, e.g., cost of a delay or investment.

What is unquantifiable risk?

Risks that are hard to predict or measure, e.g., changes in consumer tastes.

How can a business reduce risk?

Insurance, market research, diversification, legal advice, contingency planning.

What are the effects of poor risk management?

Financial losses, reputational damage, legal issues, stakeholder distrust.

What risks do entrepreneurs face?

Financial loss, time investment, stress, market failure, opportunity cost.

What is uncertainty in business?

When future outcomes are unpredictable and not easily measured.

What causes internal uncertainty?

Staff turnover, machinery failure, financial mismanagement.

What causes external uncertainty?

Economic changes, new laws, political instability, competitor actions.

How does uncertainty affect a business?

Makes planning, forecasting, and decision-making more difficult and risky.

What is opportunity cost?

The next best alternative foregone when a decision is made.

How does opportunity cost impact decision-making?

It requires businesses to consider the value of what they are giving up.

What is contingency planning?

Preparing for potential future disruptions or crises with pre-arranged responses.

What are the benefits of contingency planning?

Improves resilience, reduces downtime, protects reputation.

What are the drawbacks of contingency planning?

Costly, time-consuming, may never be needed.

Why is contingency planning important to stakeholders?

It reassures investors, protects jobs, and maintains service continuity.

What is crisis management?

The process of handling unexpected emergencies and minimising their impact.

How can crisis management be evaluated?

Based on speed, communication, decision-making, and damage control effectiveness.