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Business Edexcel revision notes Unit 3 - Business decisions and strategy
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UNIT 3 – Business Decisions& Strategy
Produced by Félix Gómez-Guillamón Jurado
Notes from all syllabus content
1
, Mission and vision statements
L.O:
Understand how mission statements can help to shape company policy
Appreciate why businesses may wish to use vision statements – and the potential
positive and negative consequences of doing so.
Mission Statements
- Encapsulates the spirit and the purpose of the business in a short and clear manner
(This will outline the overall reasons for the firm´s existence)
- Enables key stakeholders to understand what the business is about
- Shows where the business is heading
Vision Statements
- Visionary
- Inspirational
- Motivational
- Far-reaching
- Hard to achieve
Advantage and disadvantages of Mission/Vision Statements
ADVANTAGES DISADVANTAGES
Sense of common purpose Hard to encapsulate purpose briefly
Provides sense of direction Regarded as meaningless by key stakeholder groups
Clarifies essence of business Public perception is not aligned to mission/vision
statement
Makes it easier for stakeholders to understand what Stakeholder conflict can arise as result of statement
the business is about
Can provide motivation and drive to workers Sets unrealistic expectations
Useful marketing tool Demotivates workforce
2
, Corporate Aims and Objectives
Corporate objectives
Business direction
- Businesses must have a purpose and direction, otherwise they are unlikely to
survive
- To achieve this, they will need to:
Decide upon the aims of the business
Communicate their aims in a “Mission Statement”
Set corporate objectives
- These should all be linked like this:
The Aims of Businesses
“A business aim is a long-term vision or goal”
Aims are usually quite vague goals
Most businesses will have more than one aim, but not in excess
The aims of a business should be determined by:
| The purpose of the business
| The size of the business
| The ownership of the business
3
, What is an objective?
“Objectives are specific, measurable targets to help achieve the overall aims of the business”
Objectives should therefore be:
- Be small steps towards achieving an overall aim
- Be precise
- Be measurable
- Be SMART (Specific, Measurable, Achievable, Realistic, Time Bound)
Corporate objectives
Objectives are at the centre of everything a business does and are likely to fall into one
of three broad areas:
1. SURVIVAL
2. GROWTH
3. PROFIT
1. SURVIVAL
This is usually an objective when the business is threatened
This can occur either in: The early stages of the business, when trading is difficult,
when there is a threat of takeover
This objective is designed to make staff think whether their actions are putting the
business in danger
Not all organisations look for long-term survival!
4
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