..are written descriptions of corporate objectives. set out what the business does and why they do it.
Intention - to make all stakeholders aware of corporate objectives and encourage all employees to work towards them.
give clues about the companys culture and some statements explicitly state what the business believes uts corporate culture is.
changing the mission statement can help change corporate culture.
plus and minuses of mission statements
Can give staff a sense of shared purpose and encourage them to work towards common goals
can give consumers a clearer idea of the company's values.
mission statements are usually just a few lines and the businesses aims and values usually quite complex. some companies choose not to produce one.
companies do not have to proove what they say in their statements and it can be used simply for good public relations.
" a way a business does things". it shapes the expectations and attitudes of staff and managers.
affects staff behaviour, is created and reinforced by company rules, managerial attitudes and behaviour, recruitment policies that recruit people that "fit in".
CULTURE CAN BE STRONG OR WEAK.
"when employees believe in the corporate values of the company"
- Employees need less supervision - natural behaviour will fit in
- Staff are more loyal to the business - staff turnover is lower
- Increases employee motivation - better productivity
"when employees of a company do not share the company values and have to be forced to comply with them i.e through company policies".
Causes of change:
- new technology
- market changes
- consumer tastes
Effects of change
- product lifecycle can bec ome shorter
- R&D, market research can become more important
- re-training may be required
- equipment may need changing
Managment of change
- not all workers will respond werll to change
- fear of the unknown
- fear of not being able to carry out new duties
- concerns regarding not working with "friends", liking new job
Changes affecting customers
- new technology
- new managment
- spending cuts
Changes that could affect suppliers
- cuts (finance)
- lack of custom
- decline in sales
Removing resistance to change
- set clear objectives
- involve stakeholders in descions
- follow legal and union procedure
- leak proposals to asses reactions from stakeholders
- business making their accounts look better
Sale and leaseback
- business may decide to sell an assest to a leading company then leaser the asset back for an agree period of time
the leading company gains a custoemrs, and the company benefits from having a lump sum payment for the value of the assets.
the lump sum payment is an income for the company so will appear on the profit and loss account - profit will therefore show an increase
there wil be reduced fixed assets on the balance sheet and more liquid cash - liquidity position of the company is altered
Inflating the value of brands and other intangible assets
- customers may make purchases based upon a brand name, meaning the brand name has a value.
other intangible assets include goodwill, patents, copyrights and trademarks
brands which have been recently acquired for money have to go on the balance sheet. brands which have been in the comapny for a while do not go on the balance sheet
brands which have been acquired for money can still be deliberately over valued by the business, by not depreciating them enough. perfectly legal.
is a statement about one point in the past which may not help predict the future, it does not give any clues about the market or the economy the business is trading in.
BS value some intangible assets but do not value intangible assets such as managment exiperence.
best to look at profit and loss account together with the balance sheet as profit and loss acount can be useless in times of inflation and can disinclude info such as external factors and market demand
- people stick to their job roles and procedures
- non commercial goals
- fear of failure
- avoid taking risks of making mistakes
- Emphasis on results and rewards
- risk taking and innitiative is encouraged
- financial,quantative goals
- flatter structure, less levels of supervision
- Staff identify with the business and feel they are part of it - -staff feel more motivated
Less stace leave/lower staff turnover
managers can control the behaviour of workers
can make the firm less adaptable/flexible
reacting to ourside events - credit crunch
ways to enter overseas markets
•Exporting abroad – using an agent in that country.
•Franchising – quick and easy way to expand abroad
•Licensing – a local firm pays you a fee to produce and sell your product under licence (coca-cola)
•Joint ventures – A UK firm joins with an overseas firm – less risk of failure
•Direct investment – set up production and distribution in another country (eg Nissan in UK)
•Mergers and takeovers – buy a business in another country (method used by multinationals)
problems of marketing overseas
•Local competition – eg. Wal-mart in USA
•Language and Cultural differences – ways of doing business, addressing people, product names
•Different laws and regulations (product safety, labelling, pollution, advertising rules)
•Political risk – instability, conflicts, hostility to foreign firms •Economic differences – Exchange rate of the local CURRENCY, ($, Y, Euro etc.) wage levels, taxes, wealth
. •Social and lifestyle differences – leisure time, food, interests, attitude to borrowing and spending money.
•Ethics – morality of using cheap labour or exploiting customers
maximising the supply chain
This involves getting the most out of all firms involved in the chain.
•Suppliers - get trade credit or discounts
•Stock levels – reduce them , use just-in-time
•Avoid shrinkage (damaged or stolen stock)
•Bulk-buy from suppliers
•Do not rely on one supplier •Reduce transport costs
european single market
- a Trading bloc of 27 countries
- free trade between member states
- Large number of customers
- no trade barriers between member states
- free movement of workers
- free movement of capital
- oppertunities for takeovers or joint ventures
- free movement of goodsa dn services,common product specifications
3 benefits of selling to a larger market
1. more revenue and profit
2. larger output (gain economies of scale)
3. better image and status.
3 disadvantages of the eu single market