1.3 Business Objectives - Business Management

A company’s commitment to ‘reducing staff turnover to 10% or less by the end of the following year’ is an example of which of the following? 

• Aims

• Tactics

• SMART obectives

• Strategies

In which of the following scenarios might survival be an important organisational objective? 

• When the size of the market is growing

• When there is a rise in competition

• When the economy is growing

• None of these

Answer explanation

Changes in the external environment can affect business activity. An increase in competition could force a company to focus on remaining in business.

A lumber company has implemented a policy that for every tree that it cuts down, it will plant two new trees in an urban area of the city. The company’s aim is to help reduce pollution in the city, while increasing sustainability. What would this type of initiative be considered? 

• Ethical Objective

• Tactical Objective

• Strategic Objective

• CSR

Answer explanation

CSR (corporate social responsibility) is when a business operates in a manner that benefits a society as a whole. When the company plants new trees in an effort to reduce pollution, they are benefiting society and not just fulfilling their own company goals. Setting ethical objectives is focused on operating in an ethical manner for the benefit of the business itself, rather than society as a whole. Lastly, no reference is made to political stability in the example.

The medium-term to short-term objectives that work towards achieving strategic objectives and are set by middle managers are known as __ objectives.

• Ethical

• Strategic

• Tactical

• SMART

KEY TERM:

An inspiring declaration of what an organization ultimately strives to be, or to achieve, in the distant future.

• Statement of Purpose

• Mission Statement

• Vision Statement

• Plan of Ethics

TRUE OR FALSE?

Protecting shareholder value, as a business objective, is about safeguarding the interests of the owners of a limited liability company.

• True

• False

TRUE OR FALSE?

The long-term approach that indicates how a business will achieve its goals are known as tactics.

• True

• False

Answer explanation

The long-term approach that indicates how a business will achieve its goals are known as tactics.

The syllabus states the following four common business objectives:

• Which of the following is NOT one of the 4?

• Customer Happiness

• Growth

• Profit

• Protecting shareholder value

• Growth refers to an increase in the size of a business and its operations, using measures such as __?

• market share

• competition

• sales revenue

• number of cusomers

Looking Ahead - what is the next topic you will learn in Unit 1?

• Stakeholders

• Multinational Companies

• Economies of Scale

• Internal and External Growth

Answer explanation

1.4 is all about Stakeholders. Be sure to note vocabulary and read ahead in Kognity or Think IB