1. Corporate Aims, missions and goals
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2. Corporate aims
Corporate aims express the long term intentions of the organization to develop in a certain way. Their purpose is to create a common vision which everyone in the organization should work towards achieving.
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3. Corporate objectives
Goals or objectives are the targets which must be achieved in order to fulfil the corporate aims.
Corporate objectives are the goals that the whole organization is trying to achieve. The corporate aims, which are often set out in a mission statement, form the basis upon which these targets are developed.
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4. Maximising the amount of profit earned by the organization.
Corporate objectives
Maximising the amount of profit earned by the organization.
Maximising shareholder’s wealth (share prices)
Growth in the size of the firm
Diversification to spread risk to counter seasonal decline in the sales of the product.
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5. Focus on core capabilities Increasing market standing
Corporate objectives
Focus on core capabilities
Increasing market standing
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6. Objective: maximising shareholder wealth
Corporate objective
Objective: maximising shareholder wealth
Factors driving share holder’s value
Strategy
Time taken for a decision to create a competitive advantage
Operations
Increasing sales
Increasing profit margins
Reducing tax burden
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7. Efficient working capital management
Corporate objective
Investment
Efficient working capital management
Efficient fixed capital management
Financing
Identifying the cost of capital
(Adapted from Shareholder Value by Richard Barfield, published in Accountancy, October 1991)
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8. Corporate strategy
Corporate strategy is the organization’s plan of action which, when implemented, will lead to the achievement of the corporate objectives. Strategy cannot be considered before the firm’s goals are clearly established.
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9. Business strategy
Managers of the business should develop strategies to achieve the organizational goals and objectives. This is also called corporate strategy and drafts layout of actions to achieve corporate goals and objectives. It has its implications on the firm’s resources. Basically it means relating firm’s strengths to exploit the opportunities in the competitive environment or trying to find out a strategic fit.
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10. Strategy formation
Strategy formation involves developing objectives, utilizing resources, planning actions to employ organization’s system to design strategy which exploits opportunities in the competitive environment.
It involves forming strategic fit between company’s resources and strengths and the environment.
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11. Operational/Functional Individual via appraisal system
Hierarchy of strategy
Corporate
Divisional
Operational/Functional
Individual via appraisal system
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12. Mission Statement
A mission statement is a qualitative statement of the organization’s aims. It uses language intended to motivate within the firm and to convince those outside it of the company’s sincerity and commitment.
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13. Mission Statement
Mission statement expresses aims (long term intentions) of the company. To develop a strong mission statement it is necessary to link each of the four elements of the mission model so they reinforce each other.
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14. The mission model (After Campbell, Devine and Young, 1990)
The four elements of mission statement model are:
Purpose: why the company exists
Values: what the company believes in
Standards and behaviours: the policies and behaviour patterns expected of company employees.
Strategy: the competitive position of the company
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15. Examples of Mission statements which attempt to establish purpose
The Body shop-Tirelessly work to narrow the gap between principle and practice, whilst making fun, passion and care part of our daily lives.
Coca-Cola-Our mission is to get more people to drink Coke than water.
Pret A Manager-Our mission is to sell handmade extremely fresh food.
Unilever-Raise the quality of life.
James Dyson-Long-term business success based on newly invented, innovatively designed products.
Conservative Party-Our mission is to create the greatest volunteer party in the Western democratic world.
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16. Elements of Mission Statement Model
Purpose (Reason for the organization’s existence): Provides employees with the justification of their work.
Values: the values of an organization reflect the most commonly held beliefs and assumptions among the employees. In any workplace there will be an accepted view of ‘the way we do things around here’. This unwritten code is called the culture of the business. These values influence people’s attitudes, their approach to management and how they make decisions.
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17. Values: An organization’s mission statement provides an opportunity to shape this business culture. These values motivate them to work towards the organization’s objectives and goals.
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18. Criticisms over Mission Statement
Time consuming: time could be spent more effectively on some other aspects of the business.
Merely to gain publicity: some companies prepare large mission statements just to impress and gain publicity.
Mission statements are much harder to implement in a diversified organizations with multiple departments and which compete in a range of unrelated markets.
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19. References
Ian Marcouse, The Business Studies Teachers’ Book (ISBN: ), 1999
Murad Rattani