3.1.1 Corporate objectives
Business Objective - is a goal set by a business, usually in the medium to long term.
Corporate objectives - Measurable, clearly defined targets for how to achieve business aims.
Effective objectives should be:
Specific
Measurable
Achievable
Realistic
Time specific
Mission statement - a short term statement of the company's vision and values which helps to set aims and objectives.
This enables employees, managers and customers and possible some suppliers to understand the conduct of the business.
It is a statement of purpose, such as 'grow our market share in the UK'. Nike's mission statement is; "To bring inspiration and innovation to every world athlete".
Aim - is a generalised statement of what the business plans to achieve in the longer term. A goal or purpose of the business for the future, to inspire a range of stakeholders, including employees and customers.
Corporate objectives and aims are normally developed from the mission statement and are usually set by those at the top of the organisation, such as the board of directors.
Corporate objectives relate to the business as a whole, whereas all objectives below this relate to only part of the business. All objectives must relate back to corporate objectives so that each level of the business is contributing to those objectives.
Corporate objectives are influenced by a variety of factors that are within the control of management (internal) as well as factors that a business can do nothing about - except respond to them if significant (external)
Internal | External |
|---|---|
Business ownership – Who are the business owners and what do they want to achieve? | Economic environment – Perspective on key economic indicators such as economic growth, consumer spending and interest rates? |
Attitude and Profit – Is the business run to earn profit or is it a non-profit? | Political/Legal environment – Impact of uncertainty about changes in the political and legal environment? |
Ethical stance – Do ethics play a role in the business decision making? | Competitors – Do competitor actions and strategies shape what a business thinks it can achieve? |
Strategic position and resources – What options does the business realistically have based on its existing market position and resources? | Social and Technological change – How rapid is the pace of social and technological change in a business’ markets? Does this make objective-setting and decision-making easier or harder? |
Stakeholder influence – How influential are internal stakeholders? |
Strategy - How the business intends to achieve it objectives, usually long-term and made by seniot management.
Tactics - Support achievement of specific targets, usually routine and short-term and often delegated by junior management.
Strategic Decision | Tactical Decision |
|---|---|
External growth via takeover | Relocate staff from takeover HQ |
Enter international market | Choose location in new market |
Adopt cost minimisation strategy | Identify specific cost savings |
Re-brand the business | Launch re-branding campaign |
Close a major business unit | Determine detailed closure plan |
Business Objective - is a goal set by a business, usually in the medium to long term.
Corporate objectives - Measurable, clearly defined targets for how to achieve business aims.
Effective objectives should be:
Specific
Measurable
Achievable
Realistic
Time specific
Mission statement - a short term statement of the company's vision and values which helps to set aims and objectives.
This enables employees, managers and customers and possible some suppliers to understand the conduct of the business.
It is a statement of purpose, such as 'grow our market share in the UK'. Nike's mission statement is; "To bring inspiration and innovation to every world athlete".
Aim - is a generalised statement of what the business plans to achieve in the longer term. A goal or purpose of the business for the future, to inspire a range of stakeholders, including employees and customers.
Corporate objectives and aims are normally developed from the mission statement and are usually set by those at the top of the organisation, such as the board of directors.
Corporate objectives relate to the business as a whole, whereas all objectives below this relate to only part of the business. All objectives must relate back to corporate objectives so that each level of the business is contributing to those objectives.
Corporate objectives are influenced by a variety of factors that are within the control of management (internal) as well as factors that a business can do nothing about - except respond to them if significant (external)
Internal | External |
|---|---|
Business ownership – Who are the business owners and what do they want to achieve? | Economic environment – Perspective on key economic indicators such as economic growth, consumer spending and interest rates? |
Attitude and Profit – Is the business run to earn profit or is it a non-profit? | Political/Legal environment – Impact of uncertainty about changes in the political and legal environment? |
Ethical stance – Do ethics play a role in the business decision making? | Competitors – Do competitor actions and strategies shape what a business thinks it can achieve? |
Strategic position and resources – What options does the business realistically have based on its existing market position and resources? | Social and Technological change – How rapid is the pace of social and technological change in a business’ markets? Does this make objective-setting and decision-making easier or harder? |
Stakeholder influence – How influential are internal stakeholders? |
Strategy - How the business intends to achieve it objectives, usually long-term and made by seniot management.
Tactics - Support achievement of specific targets, usually routine and short-term and often delegated by junior management.
Strategic Decision | Tactical Decision |
|---|---|
External growth via takeover | Relocate staff from takeover HQ |
Enter international market | Choose location in new market |
Adopt cost minimisation strategy | Identify specific cost savings |
Re-brand the business | Launch re-branding campaign |
Close a major business unit | Determine detailed closure plan |
