Corporate Aims and Objectives; Unit 4 - Notes

Notes made from a combination of resources including the Malcolm Surridge text book and Philip Allan revision guide.

Covers the core theme of unit 4 which is corporate aims and objectives for a firm

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Corporate Aims and Objectives
Mission Statements:
Qualitive statement of what a firm is trying to achieve
Clear/Concise expression of the purpose of the firm
Commonly focuses on:
What the firm wants to be
Values of the firm
Scope of the firm's activities
Importance of different groups (Stakeholders)
A mission statement will only have value if the behaviour of everyone within the firm supports it
Influences:
Values of the founders
Values of the workforce
The industry
Society
Ownership of the firm
Corporate Aims:
Usually part of the mission statement
Sets out what a firm wants to achieve
Gives sense of direction (not numerical targets)
Get by directors
Used to set corporate and functional objectives
Corporate Objectives:
Clearly sets out what the firm has to achieve
Medium-long term
Common objectives:
Survival
Profit maximisation
Growth
Diversification
Improving corporate image
The objective varies according the size, ownership and legal structure of the firm
Corporate Strategies:
Plan to achieve the corporate objectives
Long term
Involve major commitment of resources and is difficult to reverse
High level of uncertainty
Must be changed and adapted depending on the market conditions
Tactical decisions, how the implement the strategy:
Short term
Fewer resources needed

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More regular
Less uncertainty
Strategic planning: SWOT Analysis (Strengths, weaknesses, opportunity, threats)
Ansoff Matrix:
Measures the degree of risk associated with various growth strategies
4 strategies:
Market penetration
Product development
Market development
Diversification
Porter's Generic Strategies:
Ways of gaining competitive advantages by giving a firm an `edge' rivals don't have
3 strategies:
Cost leadership
Differentiation
Focus
Porter was adamant you had to choose a particular strategy and not attempt to follow a `middle
course' as they all can conflict each other
International Corporate Strategies:
Global…read more

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Stakeholder Interests:
People are affected by the firm's decisions in different ways and want different things
Shareholders: dividends, share price, treatment
Employee's: income, working conditions, job security/prospects
Customers: supply of goods, prices, service, safety
Supplies: orders, sole-supplier, fair prices
Creditors: repayment, return, risk
Local Community: employment, pollution, provisions
Treating stakeholders differently:
A. Minimal effort
B. Keep informed
C. Keep satisfied
D.…read more

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