IBBusinessDPBusiness ManagementHLFlashcards1. Introduction to Business Management1.3 Business Objectives

1.3 Business Objectives (DP IB Business Management)

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  • What are business aims?

    Business aims are the long-term aspirations of an organisation.

  • True or False?

    Aims and objectives focus on aligning the efforts of managers towards a common vision.

    False.

    Aims and objectives align the efforts of all employees towards a common vision and ensure that everyone is working towards the same goals

  • Define SMART objectives.

    SMART objectives are targets that are:

    • Specific

    • Measurable

    • Achievable

    • Relevant

    • Time-bound

  • What is a mission statement?

    A mission statement outlines the fundamental purpose and reason for an organisation's existence.

  • True or False?

    Strategic objectives are determined by tactical objectives.

    False.

    Strategic objectives determine tactical and operational objectives.

  • What is an operational objective?

    An operational objective is the day-to-day goal or target of business functions or departments, derived from strategic and tactical objectives.

  • True or False?

    Vision statements rarely change.

    True.

    Vision statements rarely change, as they are very long-term statements of what a business hopes to be .

  • What is a tactical objective?

    A tactical objective is a target set by a middle manager intended to direct the work of the functional area they oversee.

  • True or False?

    Mission statements often change over time.

    True.

    Mission statements may need to change over time as market conditions develop

  • What is meant by profit maximisation?

    Profit maximisation involves maximising the difference between total revenue and total costs.

  • Which common business objective focuses on increasing sales revenue and market share?

    Growth as a business objective focuses on increasing sales revenue and market share.

  • Why might a business set a survival objective?

    The survival objective focuses on keeping the business going, especially during challenging market conditions or periods of change or crisis.

  • What is meant by protecting shareholder value?

    Protecting shareholder value refers to protecting the long-term share price and value of dividends payable to shareholders.

  • True or False?

    Business objectives are long-term and rarely change over time.

    False.

    Business objectives are short- to medium-term targets that may change over time due to various internal and external factors.

  • What is the profit equation?

    The profit equation:

    Profit space equals space Total space Revenue space left parenthesis TR right parenthesis space minus space Total space Costs space left parenthesis TC right parenthesis

  • What is meant by the term retrenchment?

    Retrenchment occurs when a business decides to significantly cut or scale back its activities and, as a result, has to let some staff go.

  • What are two ways firms can maximise profits?

    Firms can maximise profits by either increasing sales revenue or decreasing costs.

  • True or False?

    Market conditions can cause business objectives to evolve.

    True.

    Market conditions, such as competition, demand, and changing consumer price sensitivity, can cause business objectives to evolve.

  • True or False?

    Innovation or advances in processes might mean that objectives may be more modest.

    False.

    Innovation or advances in processes might mean that more ambitious objectives may be set.

  • What is Corporate Social Responsibility?

    Corporate Social responsibility (CSR) refers to the responsibility of businesses to have a positive impact on society, voluntarily integrating social and environmental concerns into their business operations.

  • True or False?

    Cancelling a supply contract with a supplier that uses child labour is an example of unethical business behaviour.

    False.

    Cancelling a supply contract with a supplier that uses child labour is an example of ethical business behaviour.

  • What is meant by the term ethics?

    Ethics relates to the rights or wrongs of making a decision that are beyond legal requirements

  • What is greenwashing?

    Greenwashing is creating the impression that a business is environmentally friendly when, in fact, it is not.

  • What is a corporate responsibility report?

    A Corporate Responsibility Report is an annual publication that provides an audit of the steps being taken to meet a company's commitments to a range of stakeholders.

  • True or False?

    CSR activities always reduce a company's profits.

    False.

    CSR can be very profitable as it adds value and can provide a differentiating USP that may allow for premium pricing.

  • Give two examples of socially responsible activities undertaken by businesses?

    Examples of socially responsible activities include:

    • Sustainable sourcing of raw materials

    • Responsible marketing

    • Protecting the environment

    • Responsible customer service

  • True or False?

    CSR only benefits the community and not the business.

    False.

    CSR can benefit both the community and the business through improved reputation, added value, and increased employee motivation.

  • How might CSR improve employee morale?

    CSR can improve employee morale by making workers feel more connected to a business that behaves responsibly.

  • True or False?

    Society's view of right and wrong is fixed.

    False.

    Society's perception of what is right and wrong changes over time.

Previous:1.2 Types of Business EntitiesNext:1.4 Stakeholders
1. Introduction to Business Management
2. Human Resource Management
3. Finance & Accounts
4. Marketing
5. Operations Management
6. The Business Management Toolkit