- Created by: schloggmonster
- Created on: 23-03-15 15:45
Understanding missions, aims and objectives
Unit 2 Revision Notes 4.1 from AQA Textbook
Corporate aims: long term targets that will enable the business to fulfil its mission.
Mission statement: a declaration of the organisations purpose, principle business aims, identity, policies and values.
Corporate strategy: a plan based on the corporate aims and objectives which defines the overall scope and direction of the business by identifying its choice of business, markets and objectives.
Corporate strategies usually would involve a lot of investment in terms or time and resources, which make them difficult to change.
There are 4 main types of strategy:
Operational strategies are designed to increase the efficiency of the business through achieving economies of scale or the best mic of capital and labour. Other options include introducing a flexible workforce, improving market research and the introduction of profit centres.
Corporate strategies are aimed at securing the long-term future of the business through acquisitions and mergers, by forming alliances or taking part in collaborative joint ventures.
Generic strategies focus on gaining competitive advantage by making the most of the strengths of the business. This could lead to the disposal of peripheral parts of the company to concentrate on the core business.
Global strategies involve establishing operations in more than one country in order to take advantage of different economic conditions. This may be to lower costs, or reduce the impact of changes in exchange rates.
Stakeholder groups are of large importance to businesses. Business that ignore the stakeholders interest do it at their own peril e.g. Tesco and small farmers or Nike and sweatshop accusations. In the past shareholders have been the most important stakeholders but more recently other stakeholders such as customers have started to take much more interest in the business dealings of companies.
Shareholders will expect the business to maximise profits so that they get the best possible return on their investment
Managers will expect promotion opportunities, status and financial rewards.
Employees will look for higher pay awards
Customers will look for value for money – low prices and high quality.
Suppliers will expect regular and increasing purchases.
The government will anticipate high tax revenues and legal compliance.
Creditors will look for a healthy cash flow.
Investors will look for a healthy balance sheet.
Society will expect the business to demonstrate a responsible attitude to job creation, the environment and ethical issues.
Stakeholders would often influence the outcome of management decisions and the direction the business may decide to take.