Corporate objectives

Define corporate

Corporate means whole organisation

Define corporate objectives

Quantifiable targets for the entire business

What is an aim?

General, long term outcomes the business hopes to achieve. Aims describe the overall purpose of the business (make a profit, grow or survive)

What is a mission statement?

A written expression of a firms aims, purposes and values

Why are mission statements written?

To summarise the aims and purpose of the organisation to stakeholders, provide a focal point for planning and can be motivational

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Corporate objectives

Define objective

An objective is a target an organisation sets itself to achieve through its activity

What are corporate objectives?

Are the targets the whole business is trying to achieve. Meeting these targets helps meet the aims of the business

Who sets aims and objectives?

Owners and managers determine aims and objectives

What is the difference between aims and objectives?

Aim is a general statement of purpose and an objective is a specific, measurable, timed target

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Corporate objectives

Explain SMART objectives 

  • Specific- clear statement
  • Measurable- desired outcome is a number value that can be measured
  • Agreed- staff and departments concur the target is attitude
  • Realistic- achievable with financial and human resources available
  • Timed- the target will be met within a given period of time 

List 4 reasons why objectives are set

  • Give the firm a structure and agreed sense of direction
  • Allows firms to monitor and review performance of employees, departments or the whole business against set targets
  • Where objects are SMART success can be measured
  • Motivational: workers and departments understand clearly the target to be achieved within a given time period
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Corporate objectives

Define departmental objectives

Target for a specific function

Explain Management by Objectives (MBO): 

Involves managers agreeding SMART objectives with subordinates and then regularly monitoring their progress

What are the advantages of MBO?

  • Improved flow of information through the business
  • Training needs are identified
  • Negotiating and achieving goals helps satisfy higher order Maslow needs
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Corporate objectives

List 9 factors that determine if a firm meets its objectives

  • Ensuring quality leads to repeat purchases
  • Adequate finance for operations and expansion
  • Sufficient cash flow ro pay bills on time 
  • Good supplier relationships so that production is maintained
  • Monitoring customers, markets and product trends and have the flexibility to respond to change quickly
  • The 'right' workforce with the skills and size to enable a firm to meet objectives
  • Effective organisation so that staff understand their objectives and role
  • Monitoring progress to ensure the firm stays on track to meet objectives
  • External factors such as state of the economy and the extent of competition
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Strategy and tactics

Define strategy

The plan of action by which an organisation aims to achieve its objectives- long term and decided by senior managers

Define tacticss

Short-term, day-to-day decisions taken to achieve a strategy. Junior managers decide on tactics.

What are the differences between strategy and tactics?

  • Strategy is long-term, tactics are short-term
  • Strategies are decided by senior managers, tactics are decided by junior managers
  • A long term strategy is implemented throgu short run tactics

Distinguish between strategic and tactical objectives

  • Strategic objective is a long term target (increase sales by 20% by 2009)
  • Tactical objectives are short-term performance targets needed to deliver strategic objectives
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Strategy and tactics

Given an example of an aim, strategic objective and tactical objective

  • Aim: increase profits
  • Strategic objectives: over the next 18 months, increase productivity by 5%
  • Tactical objectives: replace 30% of machines

Give 4 reasons why business objectives change

  • New businesses need time to establish the business and attract customers and revenue they expect initial losses
  • Once established, the objective changes to making a target level of profit
  • May change its objective to growth
  • External factors: dynamic environment
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The Market

What is a market?

A market is a place where buyers and sellers meet to exchange a product. Market require consumers (buyers) producers or firms (sellers) and products to trade. 

Give 4 examples of types of market

  • Foreign exchange
  • Labour
  • Housing
  • Stock markets

What is a sub market?

A submarket is a part of the market made up of customers with similar characteristics and needs (e.g housing sub markets include terraced, semi-detached and detached)

How are markets connected?

A change in the price of one product can affect the marekt for other linked products.

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The Market

Why are markets dynamic?

Dynamic means an inbuilt tendency to change. Markets are dynamic because there are many factors at work that affect buyers and sellers

List 4 ways that makes a market dynamic

  • The business cycle means the economy moves betwen booms and slumps. In a recession falling output and employment means consumers have less  income to spend
  • Research and development (R&D) mean new and improved products enter the market
  • Social trends and fashion means customer requirements change over time
  • Firms can enter or leave an industry
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Demand and supply

What is a market?

A market is a place where buyers and sellers meet to exchange a product

What is demand?

Demand is the amount of a product consumers are wiling and able to purchase at various prices, in a given time period,

What is the relationship between price and demand?

Demand rises as price falls. There is an inverse relationship between price and quantity demanded.

What is a demand curve?

A demand curve is a graph showing the amount of a product consumers are willing and able to buy at different prices, in a given time period, 

How is demand affected by a fall in price?

A fall in the price of a product causes an increase in quantity demanded

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Demand and supply

How is demand affected by a rise in price?

An increase in the price of a product causes a decrease in demand

List 6 other non-price factors affecting demand apart from the price of the product

  • Consumer income
  • Price of rival or substitue products customers can buy
  • Consumer taste influenced by quality and changing taste, fashion and advertising
  • Expectations about the economy
  • The population size and age structure 
  • The time of year 

What is disposable income?

Disposable income is income left over after paying direct taxes and recieving state benefits

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Demand and supply

How do interest rates affect income?

  • Reduces the amount of income consumers with debts can spend
  • Increases the amount of income consumers with savings can spend

Explain consumer taste

Consumer taste refers to the preference of households and is infuluenced by social trends, fashion and especially advertising

What is an increase in demand?

An increase in demand occurs when more of a product is demanded at each and every price causing the demand curve to shift to the right

What is a decrease in demand?

A decrease in demand occurs when more of a product is demanded at each and every price causing the demand curve to shift to the left

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Demand and supply

What causes a shift in a demand curve?

Demand curves only shift when there is a change in a non-price factor affecting demand

List 5 reasons for a demand curve shifting to the right

  • A rise in income
  • A rise in demand for a substitute 
  • A movement in consumer taste towards the product
  • Improved customer expectations about the economy
  • An increase in the size of population or age distribution of consumers
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