International A Level Business
Studies Unit 3 revision
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International A level Business Studies (A2) UNIT 3 - Strategic Business Decisions
3.3.1 Corporate objectives and strategy
1. Corporate objectives
★ Corporate aims
Aims are a generalised statement of where a business is heading, form which objectives can be
set.
● Corporate aims act as the basis for setting the firm's objectives
● The success or failure of each individual decision within the firm can be judged by the
extent to which it meets the business objectives.
● This allows authority to be delegated within the organisation while at the same time
maintaining coordination.
★ Corporate objectives
Corporate objectives turn the aims into SMART targets, i.e. Specific, Measurable, Ambitious,
Realistic and Timebound. - targets set to realise the main aim.
Main functions of objectives are:
● Focus for all activity
● Means of measuring performance
● Motivate workers
● Targets for group and individual achievements
● Decisions are taken with objectives in mind
★ Mission Statement
Short text that sums up an organization's mission.
Mission: an aim expressed in a particularly inspiring way
Businesses hope that by summarising the long term direction of the firm, a focus is provided to
help inspire employees to greater effort and ensure departments work together. Without this
common purpose each area of a firm may have different aims and choose to move in conflicting
directions.
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mission model
A mission statement might be a genuine expression of an organization's desire to succeed by
doing good. Or it might be a cynical attempt to pretend that apathy (lack of concern) has a
sense of purpose
E.g. Coca cola's mission used to be to get more people to drink more coke than water which
would lead to a negative effect, increasing obesity.
E.g. The attempt of bureaucratic management to provide a sense of purpose in a business that
has none - this could be the wong way to approach a problem. Instead they'd need to ask staff
what they dislike about the current structure so improvements could be made and gave the firm
a purpose.
2. Stakeholder influences on corporate objectives
Stakeholder: any individual or group affected by the activities of an organisation.
Stakeholder group Objectives
Staff (organic) growth, new technology by product, rising profits if
shared
Managers/directors Growth, new technology by process or product, rising profits
especially with bonuses, salary, status
Shareholders Rising profits, short term and long term, election of directors,
dividends
Suppliers Growth, prompt payment, long term contracts, large
purchases
Customers Reliable quality, value for money, product availability,
customer service
Bankers Interest repaid, maintain credit rating, stable profits
Local residents Clean, green production with few deliveries, local jobs
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★ Stakeholder Conflicts
Situations Likely supported by Possibly opposed by
Cut jobs to reduce costs Shareholders Employees
Banks Local community
Consumer demand switching Shareholders and customers Staff, employees
from shops to e-commerce
New machinery to replace Customers, shareholders Employees
manual work
Increase selling price to Employees, shareholders, Customers
increase profit margins management
★ Stakeholder and shareholder influences
Influence of stakeholders
● Public relations benefits ome form a positive corporate image based on respect for
stakeholders
● Supermarkets like John Lewis make customers feel like they're buying high quality
ethically sourced products and suppliers feel better looked after thn with Tesco.
Influence of shareholders
● If shareholders seem obsessed with quick fixes to boost profit and the share price it's
hard for senior executives to buck this trend, the directors end up doing what
shareholders want.
★ Corporate Social Responsibility CSR (p126)
CSR: a term intended to sum up the ethically driven activities of a business but often it's an
extension of the public department (OR), making sounds that signify nothing.
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