Corporate objectives and aims

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What is a corporate objectives?
Company-wide goals that need to be achieved in order to keep the business on track to achieve its aims
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What does SMART objectives stand for?
Specific Measurable Ambitious Realistic and Time-bound
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What are the main focus of PLC's corporate objectives?
Maximising shareholder value, growth and diversification
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What are corporate aims?
A generalised statement of where the business is heading, from which objectives can be set
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What is an example of an aim?
"To provide a friendly service in a relaxed, safe and consistent environment" -Mcdonalds
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What is the purpose of mission statements?
To help employees remain focused on the tasks at hand and encourage them to find innovative ways of moving towards company goals
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What does a mission statement convey?
Purpose (why the company exists), Values (what the company believes in), Standards and behaviour (set by managers and how staffs treated) & Strategy (medium to long term plans)
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What should the mission statement be capable of?
Inspiring those who read it or hear it, it should be highly memorable
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Why don't some companies have mission statements?
M&S- feel that their mission can't be summarised in a sentence or paragraph
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What is critical appraisal of Mission statements?
Do they genuinely outline the aims of the business, or are they more part of the marketing of the business and aimed at giving a good impression?
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What are stakeholders?
Individuals or groups that have an effect on and are affected by the activities of the organisations
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What are some examples of stakeholders?
Employees, Owners, Managers, Customers, Shareholders, Environment
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What are the two approaches when dealing with stakeholders?
Stakeholder and shareholder approach
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What is the shareholder approach?
Gives priority to the shareholders meaning the managers focus on maximising shareholder value
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When is a shareholder approach most common?
In Private Limited Companies
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What is the stakeholder approach?
All stakeholders are treated equally and should lead to long term benefits
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What do employees want from a business?
They will want maximum wage with the best possible benefits
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Why do employees need to be careful about bargaining for higher wages?
if wages are too hish this may lead to losses for the company and therefore employees may be laid off
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What do customers want from a business?
They will want value for their money and this may be achieved by investing more into R&D
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What does the government want from businesses?
It will be keen on it providing more jobs so will be keen on its growth
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What are advantages of the stake holder approach?
Attractive employment (higher quality of applicants), Effective consumer care policies should lead to higher sales, Good cooperation with suppliers should lead to the purchaser getting value for money
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What are disadvantages of stakeholder approach?
Less importance on profit could cause less return on capital employed this may detract investors, Owners have the most influence of the business but in a PLC, the managers have the most control
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What is Corporate Social Responsibility (CSR)?
The responsibility that a business has toward its shareholders
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Why are CSR policies available from most major businesses?
It makes the business seem good to the public and as a result may have a positive impact on sales and increase market standing as well as profits in the long run
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Why have businesses having auditing and indexes?
To take better care of its stakeholders
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What are employment indicators?
How well businesses treat their staff and this is comprised of many parts incl pensions, healthcare, accidents in work place
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What are human rights indicators?
Whether the business uses child labour and performance of businesses in establishing gender equality
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What are community indicators?
Donations to charity and public works
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What are business integrity indicators?
How corrupt the business is
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What is the product responsibility?
How safe are the products?
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What is the environment?
The carbon foot-print of the firm, Rating on waste management systems and Fines dues to environmental regulations
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What is corporate culture?
The values, attitudes, beliefes, meanings and norms that are shared by people and groups within an organisation
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When do strong cultures exist?
When the staff agree and believe in that particular culture
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What can a strong culture lead to?
The firm performing most efficiently
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When do weak cultures exist?
If the staff do not agree or have little affinity to the culture
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What is power culture?
Central source of power that makes all decisions
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What is role culture?
Decisions based on rules and procedures, power lays in the system and hierachy
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What is task culture?
Power is given to those who can accomplish tasks, thus with those who have expertise
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What is person culture?
The business is centered around a few individuals with expertise such as doctors or lawyers, the purpose is to support the individual
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What are advantages of having a strong corporate culture?
Provides a sense of identity to workersand makes them feel like of the business, facilitates team work, employees become more committed and leads to an increase in productivity and helps to reinforce values of business and senior management
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What are difficulties in changing an established culture?
Can form a cultural gap as people may resist change, a change in beliefs and values could conflict with the beliefes and values of the worker that were in the previous beliefs and values, a bus may result to sacking managers and workers and hire new
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What is corporate strategy?
The policies developed to meet a company's objectives, it looks at the range of activities a business needs to undertake to achieve its goals
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Why are corporate strategies made?
To achieve corporate objectives
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What do corporate objectives take into account?
The implications on the business resources
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What is the aim of portfolio analysis?
To allow a firm to consider its existing position of a product and plan what to do next, so that the firm can make better corporate strategies
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What is the main way a business does this?
Boston Matrix
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What is the boston matrix?
Product portfolio analysis tool to plot out the product and identify which marketing strategy to use
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What is building?
Investing in promotion and distribution to boost sales
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What products is building applied to?
Problem child
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What is holding?
Marketing and spending on the product to maintain its sales
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What products is holding applied to?
Rising stars
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What is milking?
Maximising profits with as little new investment as possible
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What product is milking applied to?
Cash cows
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What is divesting?
Selling off the product i.e. liquidising
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What product is divesting applied to?
Dogs and problem child
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What is competitive advantage?
An advantage which a business has that enables it to perform better than its rivals
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What are distinctive capabilities?
What makes the business' product seem superior to the consumer
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What is a distinctive capability of Toyota?
They have good quality in combination with its costs and fuel efficiency which makes it perfect for first time buyers and has expertise in the 'green car'
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What did porter argue in the strategic matrix?
5 forces determine the profitability in an industry
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What are the 5 forces?
Bargaining power of suppliers, Threat of substitute products or services, Bargaining power of buyers, Threat of new entry and Rivalry of among existing competitors
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How can a business minimise a suppliers power?
Backward vertical integration, Seek new suppliers that offer better deals, Find cheaper substitutes for the materials required to make the product & Minimise information provided to suppliers so they cant understand their influence on the business
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What happens as a supplier becomes more powerful?
The business will make less profits
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What happens as the bargaining power of the customers increase?
The lower the price will be
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What are ways for a business to minimise bargaining power?
Forward vertical integration, Encourage similar businesses in the industry to make the same move, Make it difficult to choose another business
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What is an example of making it difficult to choose another business?
Game manufacturers make cartridges so that they are incompatible with other devices, so cant buy Xbox games if have a PS
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Why are new entrants a problem?
If easy to enter and exit from a market is easy, businesses specialising in in the market can find it difficult to sell their products
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What are ways to limit the amount of new entries?
Patents and copyrights, Develop strong brand image that encourage customer loyalty large amounts of advertising
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What happens as the amount of substitutes increases?
Their is more fierce the competition
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What are ways to limit the amount of substitutes?
Invest into R&D and patent new and innovative products, buy patents in order to prevent other companies from introducing a new product into the market
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What does high competition lead to?
Low prices
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What are ways to limit rivals?
Price fixing (illegal), Horizontal integration, Innovation through R&D and the creation of a strong brand image through advertising
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What is a strategic decision?
One that is made in a situation of uncertainty and has medium to long term significance for the business
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What is a tactical decision?
Decisions which affect the business on a day to day scale, often in response to an event
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What do strategic decisions effect?
They affect the direction the business is heading in so they more effect financial and human resources
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What do tactical decisions affect?
The same type of resources but on a smaller scale
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What are corporate level objectives?
Objectives concerning the business or organisation as a whole
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What are functional level objectives?
Specific objectives for different areas of a business eq marketing or production
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What are the important roles of competitor analysis?
Help management understand their competitors advantages and disadvantages, Generate understanding of their past, present and future, Develop strategies to achieve competitive advantage in the future
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What type of things does a business want to know about competitors?
Sales and profits, Relative costs, Customer satisfaction, Distribution costs, New product strategies, Advertising effectiveness
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What is strategic groups?
A process of mapping the different firms in a market place to find out who your direct competitors are, and see if any gaps in the market
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Card 2

Front

What does SMART objectives stand for?

Back

Specific Measurable Ambitious Realistic and Time-bound

Card 3

Front

What are the main focus of PLC's corporate objectives?

Back

Preview of the front of card 3

Card 4

Front

What are corporate aims?

Back

Preview of the front of card 4

Card 5

Front

What is an example of an aim?

Back

Preview of the front of card 5
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