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  1. 2. Business & Management Studies <ul><li>Unit 81 Corporate Aims, Mission and Goals Unit 82 Corporate Objectives And Strategy </li></ul>
  2. 3. Corporate Aims and Goals <ul><li>Working towards a common vision </li></ul><ul><li>Staff should share a collective view of what ‘success’ is </li></ul><ul><li>Corporate aims build - Team spirit - Co-operation - Commitment </li></ul>
  3. 4. Example: McDonald's <ul><li>‘ To provide friendly service in a relaxed, safe and consistent restaurant environment’. = Mission Statement </li></ul><ul><li>‘Ideal model’ </li></ul><ul><li>Replicated world-wide </li></ul>
  4. 5. Turning Corporate Aims into a mission Statement <ul><li>“ A mission statement is a qualitative statement of the organisation’s aims. It uses language intended to motivate within the firm and to convince those outside it of the company’s sincerity and commitment”. (Marcouse et al., 1999, P. 569) </li></ul>
  5. 6. Content of the Mission Statement
  6. 7. Purpose <ul><li>Reason for companies existence </li></ul><ul><li>Identifies the stakeholders - employees shareholders customers suppliers </li></ul><ul><li>The most effective recognise the needs of more than one stakeholder group. </li></ul>
  7. 8. Values – Business culture of firm <ul><li>Identifies the common beliefs and assumptions of employees </li></ul><ul><li>Shapes the Business Culture </li></ul>
  8. 9. Sources of Business Culture <ul><li>Company routines </li></ul><ul><li>Formal Controls </li></ul><ul><li>Organisation structure: Vertical (function) and horizontal (hierarchy) </li></ul><ul><li>Power structure </li></ul><ul><li>Symbols ( language, status, location of employee office etc.) </li></ul><ul><li>Rituals and Myths ( Traditional patterns of doing things) </li></ul>
  9. 10. Attitudes to risk taking
  10. 11. Attitudes to Reward Distribution – management and workforce
  11. 12. Types of business Culture - 1 <ul><li>Power Culture </li></ul><ul><li>Power rests with small group of individuals (or one person) Few rules and procedures Please the boss culture can develop Role Cultures Power depends on position Formal rules and procedures Rigid bureaucratic culture </li></ul>
  12. 13. Types of business Culture -2 <ul><li>Task Cultures Power is task specific Project teams </li></ul><ul><li>Teams drawn from all relevant departments </li></ul><ul><li>Person Cultures Groups of professionals such as accountants and lawyers Share knowledge and expertise. </li></ul>
  13. 14. Mission Statement (MS) <ul><li>Behaviour Standards - MS should provide clear guide to the expected behaviour of employees - MS purpose values and strategy should guide employee action </li></ul><ul><li>Developing a Mission Statement Achieve a broad consensus amongst stakeholders over MS </li></ul>
  14. 15. Four Types of mission statement (from Baetz & Bart, 1996)
  15. 16. Content of Mission Statements <ul><li>Financial objectives </li></ul><ul><li>Non-financial objectives </li></ul><ul><li>Values and beliefs </li></ul><ul><li>Definition of success </li></ul><ul><li>Number one priority </li></ul><ul><li>Specific product definition </li></ul><ul><li>Specific market definition </li></ul><ul><li>Basis of competition </li></ul><ul><li>A number of stakeholders </li></ul>
  16. 17. Criticisms of Mission Statements <ul><li>Public Relations Exercise </li></ul><ul><li>Unrealistic </li></ul><ul><li>Do not reflect the true culture </li></ul>
  17. 18. Corporate Objectives and Strategy <ul><li>Corporate objectives are goals that the whole organisation is trying to achieve. </li></ul><ul><li>Corporate strategy is a plan of action that will lead to the achievement of those objectives </li></ul><ul><li>Strategy cannot be considered before the firms objectives are clearly established </li></ul>
  18. 19. Examples of corporate objectives <ul><li>Profit maximisation </li></ul><ul><li>Maximising shareholder wealth </li></ul><ul><li>Growth </li></ul><ul><li>Diversification </li></ul><ul><li>Core Capabilities </li></ul><ul><li>Increased Market Share </li></ul>
  19. 20. Business Strategy ( Medium to long term plan)
  20. 21. Analysis at each level of the business
  21. 22. Strategic Fit
  22. 23. Porter’s five forces in the competitive environment -1 <ul><li>Threat of New Competitors Entering the Market Competition drives down profits – so create barriers to entry </li></ul><ul><li>1. Large start-up costs (heavy investment) 2. Branding 3. Control of outlets for products 4. Patent product and operating processes </li></ul>
  23. 24. Porter’s five forces in the competitive environment - 2 <ul><li>Power of Buyers Large buyers drive down profits – so reduce their power </li></ul><ul><li>Acquire retail outlets (forward vertical integration) </li></ul><ul><li>Make it expensive to switch to alternatives </li></ul>
  24. 25. Porter’s five forces in the competitive environment - 3 <ul><li>Power of Suppliers P owerful suppliers can give unfavourable terms – so reduce their power </li></ul><ul><li>Acquire supply outlets (backward vertical integration) </li></ul><ul><li>Support new competitors if they appear </li></ul><ul><li>Limit the suppliers information (information = profits) </li></ul>
  25. 26. Porter’s five forces in the competitive environment - 4 <ul><li>Threat of Substitutes Substitutes can emerge (cable and satellite TV) – so reduce the possibility </li></ul><ul><li>Develop alternatives yourself in order to control them </li></ul><ul><li>Purchase the rights to new alternatives </li></ul><ul><li>Use spoiling tactics (Virgin airline, Laker airline) </li></ul>
  26. 27. Porter’s five forces in the competitive environment - 5 <ul><li>. Existing Industry Rivalry Rivalry reduces profits – so reduce rivalry </li></ul><ul><li>Develop a differentiated product – branding </li></ul><ul><li>Form a cartel with competitors </li></ul><ul><li>Acquire competitors </li></ul>