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corporate objectives (advantages of mission statements: (gives a sense of…
corporate objectives
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exam tip:
when analysing a case study, always to identify the business's objectives. If a business achieves its objectives then it is a successful business
not all objectives are as important as one another, therefore, by prioritising an objective with a clear justification you can provide the basis for a recommendation when answering the question. If you can argue that a certain course of action will support a business in achieving its objectives then you have a strong point of evaluation
corporate objectives:
these objectives are set at high levels and are quite distinct from any more detailed functional objectives set for functional areas of the business
they tend to be set around growth or profit maximisation. for example "to grow the sales in China by 25%"
functional objectives:
functional objectives and strategies need to be carefully coordinated in order to achieve success. the operations department have to ensure the stadium is converted (if building a stadium) and they must ensure that all the required equipment is present
if one department succeeds while another fails then the football club will be laughed at by the UK media
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aims: long term intentions which allow objectives to be set. normally aims are qualitative statements such as "to achieve profitable and sustainable growth"
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corporate strategy: a medium to long term plan of how the firm will achieve it's corporate objectives
hierarchy of objective settings:
- mission statement
- corporate aims
- corporate objectives
- functional objectives
typical functional areas and their objectives:
marketing: increase market share + increase brand popularity
operations: minimise costs, increase capacity utilisation, increase quality
HR: reduce labour turnover, reduce absenteeism, increase productivity
finance: improve cash-flow + ensure borrowing is reduced
objectives need to be SMART: specific, measurable, achievable, realistic and time-bound
STRATEGY:
in order to put into place the most appropriate strategy a firm will gather data and test several ideas before implementing the best one
each function of the business must contribute carefully to make the strategy a success.