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Business Revision Notes: 1AS.4

Business Objectives
Business objectives in the private and sector public
The Nature and importance of business objectives at corporate,
departmental and individual levels :

Almost all aspects of human activity are made clearer and more focused if there is a
distinct objective to aim for.…

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Numeric or descriptive
Quantity, quality and cost
Quantitative value prove to be more effective for staff and directors to
work towards
Measureable objective : Nike will increase the sales of tshirts by 10%
over the previous year
Appropriately limited in scope
Within your control and influence…

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Business Objectives (Public vs Private)

Public : primarily driven to offer quality services such as health care and

Private : driven to make profit through providing goods and services
that meet consumer wants

Corporate responsibility as a business objective

Business that consider the interests of society by taking responsibility…

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Should business implement CSR?

YES, Reason: Can avoid influential pressure group, motivate staff and
increase brand image

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Business should implement a wider perspective when setting objectives
and not be profit driven only
Relationship between mission statement, objectives, strategy
and tactics

Mission Statement: a statement of the business's core aims, phrased in away
to motivate employees and to stimulate interest by outside group.

They are insufficient for…

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Mission statement limitations:
Too vague and general, not specific about the business or its future
Based on public relation exercise to make stakeholder groups `feel good'
about the organization
Not impossible to analyze or disagree
Unfocused and general, 2 completely different businesses can have a
similar mission statements.


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Different stages of business decision making and the role of
objectives in the stages of business decision making

Profit Maximization

Profits are essential for rewarding investor in business, a key objective
However there are serious limitations with this corporate objective such
Focus on high shortterm profits may encourage competitors…

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Sales growth might be achieved at the expenses of lower profit
Larger business can experience diseconomies of scale
Using profit to grow can lead to lower shortterm returns to
Growth in to new business area can lose focus, direction of the
whole organization. [A coffee shop becoming a…

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How objectives might change over time

1. A new formed business may have satisfied the `survival' objective by
operating for several years, and now the owners wish to purse objectives
of grow or increased profit

2. The competitive and economic environment may change, so the entry
into the market of…

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Corporate Objectives relate to the whole organization
They must be broken down into meaningful targets focusing on
divisional goals
Divisional objectives then become department objectives
Targets are given and budgets allocated to reach those targets

The communication of objectives and their likely
impact on the workforce:
Management objectives: a method…


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