58. Corporate Aims and Objectives - sunny' . Corporate Aims and Objectives 1. ... ANSWERS – Corporate Aims and Objectives 11..1. aims objectives ... those owed money by a business,

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58. Corporate Aims and Objectives

1. Delete as necessary and fill in the gaps:

Companies as big as Tesco may have as many as 250,000 staff. All need to know where the

business is heading and what the immediate targets are. The directors of the business must

agree the corporate aims/strategies. Once these are clear, the directors can set the corporate

tactics/objectives. These will lay down precise targets such as to increase market ___________

from 33% to 34% by the end of the coming year. Once these targets are clear, the directors can

discuss with senior managers about the corporate ________________, i.e. the plan for meeting

the objectives.

2. Spot the sequence. Identify the aim then objective then strategy of these two

businesses:

A. Use regional TV ads to communicate: Best BMW range in the Midlands

B. Use UK design students and UK production for initial stock

C. To be the site of choice for those wanting catwalk fashion fast

a) To be the fastest-growing BMW dealership in Britain

b) To get clothes delivered to customers within 10 days of them being shown on the catwalk

c) To become the top-selling BMW dealer in the Midlands within the next 2 years

On-line fashion retailer BMW car dealership, Warwick

AIMS 1. 1.

OBJECTIVES 2. 2.

STRATEGY 3. 3.

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3. Data response question

Cadburys 2009 annual report focuses on two strategies used by the business:

use existing distribution strength to expand into new categories, such as the launch of

Trident gum into the U.K.

focus on six countries where it enjoys strong growth across all categories: U.K., U.S.,

Mexico, Russia, China and India. Outline a corporate objective that you think both

strategies would help to meet. Explain your answer.

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

4. Explain why:

4.1 Clear objectives are especially important to big multinational firms

__________________________________________________________________________________

__________________________________________________________________________________

4.2 Some directors like to set hugely ambitious goals for staff

__________________________________________________________________________________

__________________________________________________________________________________

4.3 Staff may respond better to an objective based on high growth than high profit

__________________________________________________________________________________

__________________________________________________________________________________

4.4 The worst problem of all may be aims and objectives that are clear, but wrong.

__________________________________________________________________________________

__________________________________________________________________________________

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58. ANSWERS Corporate Aims and Objectives

1.1.1.1. aims objectives share strategy

2.2.2.2. OnOnOnOn----line fasline fasline fasline fashion retailerhion retailerhion retailerhion retailer BMW car dealership, Warwick BMW car dealership, Warwick BMW car dealership, Warwick BMW car dealership, Warwick

AIMSAIMSAIMSAIMS 1.1.1.1. C.C.C.C. 1.1.1.1. a)a)a)a)

OBJECTIVESOBJECTIVESOBJECTIVESOBJECTIVES 2.2.2.2. b)b)b)b) 2.2.2.2. c)c)c)c)

STRATEGYSTRATEGYSTRATEGYSTRATEGY 3.3.3.3. B.B.B.B. 3.3.3.3. A.A.A.A.

3. Both strategies are based on quite cautious objectives because they are building on known

strengths rather than taking risks with radically new products or markets. The objective might be:

To safely build sales and profits by single figure percentages over the next 2 years.

4.1 Firms with divisions or subsidiaries throughout the world might find it hard to have a

coordinated approach. Clear objectives would help keep everyone pointing in the same direction.

4.2 Many bosses feel that audacious goals help motivate people, i.e. even if the goal isnt quite

achieved, the outcome may be better than it would otherwise have been.

4.3 It may be hard to get excited about high profits for the benefit of the shareholders; growth

provides greater job opportunities for all staff.

4.4 Leading up to the credit crunch, bankers were clear in their pursuit of profit/bonuses, but

this proved to no-ones benefit. Aims and objectives have to be very carefully considered, on

moral as well as practical grounds.

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91. Stakeholders

1. Missing words

Stakeholders are individuals or groups with an interest in the actions, successes and failures of

an organisation. They include the owners (in an unlimited ____________________ business), the

________________________ (in a limited company), staff, suppliers, customers and local

residents. Some writers suggest that modern firms take care to respect all their stakeholders,

whereas others believe that firms focus upon shareholders rather than the wider interests of all

their ______________________. Current company law says that Directors primary

responsibility is to their _______________________.

2. Which stakeholder group is affected most by each of the following decisions?

2.1 A move to a policy of JIT ordering of materials.

2.2 To adopt a strategy of non-replacement of staff.

2.3 A switch in transport policy from delivering by rail to using the roads.

2.4 A decision to cut dividends by 20%.

3. Give two reasons why:

3.1 It might be short-sighted to focus solely upon the interests of shareholders

_________________________________________________________________________

__________________________________________________________________________________

3.2 Treating all stakeholders as equal may threaten a companys performance

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

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4. Data response:

Look at the following data relating to two producers of cement, then answer the questions below.

Producer A Producer B

Profit as a % of sales revenue (profit margin) 8.4% 6.7%

Staff absence for health & safety reasons (%

per day)

3.5% 1.6%

Average credit period before paying

suppliers

92 days 64 days

% cement dust emissions escaping from

factory

2.9% 1.3%

4.1 Which producer seems to act more responsibly towards its staff?

_______________________ .

4.2 Which producer seems more focused upon its shareholders than its stakeholders?

__________________.

Briefly explain why you say that:

__________________________________________________________________________________

__________________________________________________________________________________

4.3 Why may there be a conflict of interest between stakeholders, if company A was deciding

what to do about its cement dust emissions?

__________________________________________________________________________________

__________________________________________________________________________________

4.4 What evidence is there that producer A may be acting in a short-termist manner?

__________________________________________________________________________________

__________________________________________________________________________________

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91. ANSWERS 91. ANSWERS 91. ANSWERS 91. ANSWERS ---- Stakeholders Stakeholders Stakeholders Stakeholders

1. liability, shareholders, stakeholders, shareholders

2.1 Suppliers

2.2 Staff

2.3 Residents/the community generally

2.4 Shareholders

3.1 If staff become alienated the business may become less competitive; profit

maximising pricing may alienate customers

3.2 Stakeholders interests can conflict, eg increasing capacity may please shareholders

and staff, but upset local residents, so total even-handedness may not work; decision-

making may become too slow

4.1 Producer B

4.2 Producer A; making good profit, but perhaps a