Framework for activity
Aims, objectives and mission statements
Mission statements
Define
Mission statement - an outline of the businesses vision. This states what the business stands for and wants to achieve.
Aims - Business aims are what the business wants to achieve within a set period of time.
Objectives - Objectives are stated, measurable targets of how to achieve its aims.
Apply
BT's mission statement:
"Our purpose is to use the power of communications to make a better world. By bringing together the best networks and technology with the expertise of our people, we make connections and create new possibilities"
Analysis
The importance of mission statements:
Aims
Define
Aims - Business aims are what the business wants to achieve within a set period of time. These will be in line with the mission statement
An easy way to remember the types of aims set by businesses is the acronym:
–Profit
–Increase market share
–Growth
–Survival
Other aims could also include:
- Customer satisfaction
- Being environmentally friendly
- Being ethically and socially responsible
Apply
Examples of BT's aims:
We are committed to growing a successful business by being valuable to customers and society, and to delivering value to our shareholders.
To deliver sustainable profitable revenue growth.
Analysis
The importance of business aims:
Objectives
Define
Objectives - Objectives are stated, measurable targets of how to achieve its aims.
Objective must be:
Mission statements
Define
Mission statement - an outline of the businesses vision. This states what the business stands for and wants to achieve.
Aims - Business aims are what the business wants to achieve within a set period of time.
Objectives - Objectives are stated, measurable targets of how to achieve its aims.
Apply
BT's mission statement:
"Our purpose is to use the power of communications to make a better world. By bringing together the best networks and technology with the expertise of our people, we make connections and create new possibilities"
Analysis
The importance of mission statements:
- To allow stakeholders to understand the way the business is trying to operate, therefore this might encourage additional investment which could lead to an increase in capital to expand their business. For example, BT promise to 'create new opportunities'.
- Gives BT something to aspire to, which can then be referred to when making decisions that affect the company as a whole for example the development of new technology to build better networks.
- To attract the right workers to the BT, in the case of BT, this would be skilled workers who have the necessary expertise.
Aims
Define
Aims - Business aims are what the business wants to achieve within a set period of time. These will be in line with the mission statement
An easy way to remember the types of aims set by businesses is the acronym:
–Profit
–Increase market share
–Growth
–Survival
Other aims could also include:
- Customer satisfaction
- Being environmentally friendly
- Being ethically and socially responsible
Apply
Examples of BT's aims:
We are committed to growing a successful business by being valuable to customers and society, and to delivering value to our shareholders.
To deliver sustainable profitable revenue growth.
Analysis
The importance of business aims:
- It allows BT to achieve its mission statement
- Keep BT employees focused on the overall goals, such as increasing profit
- Allows BT to measure its success. Has it achieved its aims?
Objectives
Define
Objectives - Objectives are stated, measurable targets of how to achieve its aims.
Objective must be:
Apply
Examples of BT's objectives could be:
Analysis
The importance of business objectives:
Exam questions
Examples of BT's objectives could be:
- Improve our customer service rating to 97% by 2016
- To increase access to fibre optic broadband for UK customers by 20% in 2018
- To increase share price for shareholders by 4% within the next financial year
Analysis
The importance of business objectives:
- Stepping stones in achieving an overall goal - small more manageable steps to allow BT to meet the aims and mission statement. This is much easier for the departments and, therefore, the worker to follow
- Setting of realistic targets for various departments - for example, the finance department can focus on the increase in share price
Exam questions
- Identify two business aims, apart from survival, for a business you have studied (2 marks)
- Explain two reasons why it is important for a business you have studies to set business aims (4 marks)
- Explain two reasons why it is important for a business to have a mission statement (4 marks)