The relationship between mission and objectives Mrs Reid Thursday, 29 September 2016 Lesson Objectives: - Analyse mission statements of some top firms -Discuss some objectives businesses may have -Explain why entrepreneurs will find it helpful to set objectives for their businesses - Explain how business aims can be SMART

Key Term: A Mission Statement sets out a business’s overall purpose to direct and stimulate the entire organisation

STARTER Guess the company… “______’s vision is to be the world's best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile."

Guess the company… “_____ aims to be the place for health and beauty customers. We want to secure market leadership in the UK and build on our brands’ growing success internationally”

Guess the company… “_____’s mission is to provide a global trading platform where practically anyone can trade practically anything."

"To make the world's information universally accessible and useful"

…Discussion… Remember… the mission statement is a description of the aims of a business When these entrepreneurs started their businesses what do you think their aims were?

Business Aims Aims are long term plans from which a business’s objectives are derived

Business Objectives There are 6 main business aims which firms could have, these are: Survival Profit Maximisation Growth Cash flow Diversification Social and ethical objectives

SURVIVAL Why might a business have ‘survival’ as its main objective? -When its just starting out and isn’t established -If they have been going through tough times, and not making many sales, perhaps due to the recession and high unemployment

PROFIT MAXIMISATION This is one of the most basic aim of the majority of businesses. Who would be happy about a business making lots of profit? High profits means better returns for owners and shareholders Customers will be happy the firm can continue to operate Employees will have a safer job and could look forward to a bonus OBVIOUSLY profits enable survival

GROWTH For some businesses their main aim is to grow and expand by opening new branches or extending their range of products and increasing their market share. OBVIOUSLY growth should ultimately lead to more profits

CASH FLOW Many businesses have an objective to manage their cash flow as the consequences of failure could be dire How could a business improve its cash flow position? What would happen if a business ran out of cash?

Diversification A firm produces an increased range of goods and services What are the benefits of diversification? Are there any risks?

Social and ethical objectives Being ‘green’ is often a key aim of businesses as they look to reduce their impact on the environment and reduce global warming. What examples can you think of where businesses have made an obvious effort to be ‘green’? Why do you think they do this? What other objectives are there?

Activity Page 9 Marks and Spencer and its Plan A

Discussion Why is it important for business to have clear objectives?

Discussion Why is it important for business to have clear objectives? To provide targets which the business can work towards To define what the business is and what it aspires to be To act as a guide when firms choose what to do in the future To act as a standard against which a business can judge its success

Business set objectives to help them meet aims. Objectives should be SMART S pecific M easurable A ttainable R ealistic T imed “To make loads of money really soon” is not smart. “To make £5,000 net profit in the 1 st year” is smart. Activity: Write down one SMART target for something you would like to achieve this year…