This document is notes of what are SMART objectives, mission statement, and also goes into what are fixed, variable and total costs are and also how they are represented on a chart used to calculate breakeven output and margin of safety.
LO: to understand what business objectives are and why companies use them
SMART objectives: To increase the number of
Specific passengers that travel with the
Measurable airline in the holiday seasons by 20%
Achievable over the next 3 years.
Relevant (British Airways)
Timescale
Mission statement – a brief written statement of the purpose of a company or an organisation.
Guides the actions of the organisation, spells out overall goal, provides a sense of direction, and
guides decision making for all levels of management.
The relationship between mission and objectives:
Mission statement – overall reason of a business’ existence.
Corporate aims – the long-term targets and plans to fulfil the mission statement.
Corporate objectives – the medium to long term quantifiable targets to fulfil the mission
statement.
Corporate strategy – the actions to be taken by the business to achieve the objectives.
Business tactics – actions taken on a day-to-day basis to support the strategy.
Why businesses set objectives?
Common sense of purpose – to achieve mission statement
Motivate employees
Create reward systems – prizes, promotions, bonuses, keeping your job
Measure and review performance
Inform decisions to improve performance
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