1 What is the purpose of a mission statement?

[3]

The purpose of a mission statement is to motivate employees and to stimulate

interest by outside . They must include moral statements or values to be
worked upon, these can help to guide and direct individual employee behaviour at
work. Example of a mission statement: A level college: To provide an academic
curriculum in a caring and a supportive environment

2 What are often considered to be the practical limitations of the mission

statement? [3]

*Quickly inform groups outside the business what the central aim and vision are.
*Can prove motivating to employees, especially where an organization is looked
upon, as a result of its mission statement, as a caring and environmentally friendly
body employees will then be associated with these positive qualities.
*often include moral statements or values to be worked towards, and these can
help to guide and direct individual employee behavior at work.

3 What do you understand by the corporate objective’ increasing ‘shareholder

value [4]

Shareholder value is the value delivered to the equity owners of a corporation due
to management’s ability to increase sales, earnings, and free cash flow, which leads
to an increase in dividends and capital gains for shareholders and increasing
shareholder value is the idea that firms should operate in a manner in which shares
will reflect higher expected future values. Or an increase in shareholder value is
created with a company earns a return on invested capital. These targets might be
achieved by pursuing the goal of profit maximisation They put the interests of
shareholders above those of stakeholders.

4. Why might the objective of "increasing shareholder value" conflict with

corporate social responsibility? [4]
In Corporate responsibility, there is a general agreement that they must adopt a
wider perspective when setting objectives that are not just aiming for profits and
expansion. Increasing shareholder value directs its management action towards
increasing the company share price. It pursues the goal of profit maximization.
This shareholder-value objective puts the interests of shareholders above those of
other stakeholders. Increasing shareholder value contradicts corporate social
responsibility because it focuses on profit maximization while corporate social
responsibility is not just aiming for profit maximization but for a wider
perspective.

5. Why should departmental objectives be coordinated? [2]

The departmental objectives should be coordinated so the increase in profit

margins in marketing increase by 7%. We can reduce the long-term borrowing in
finance by 5% and it can develop one innovative product each year. At the end we
increase profit margins, we reduce long-term borrowing and we develop an
innovative product per year.

6. What is meant by 'management by objectives? [3]

Management by objectives is a method of coordinating and motivating all staff in

an organisation by dividing its overall aim into specific targets for each
department, manager and employee. It’s the process undertaken after a discussion
and an agreement with personnel at each level of the organisation so it can be very
effective way of delegating authority and motivating staff.

7. What do you understand by an ‘ethical code of conduct’ [3]

Let’s define ethical code first: it is a document detailing a company’s rules and
guidelines on staff behavior that must be followed by all employees. By the
definition, I understand that ethical code means principles that employees must
follow to work at a company or a certain job
Example: Walmart ethical code that has 3 basic principles: respect for the
individual,” service to the

8.why might some firms decide not to act ethically in a competitive market?
[6]

It might cause them to fail or loss of profit. A failing business may very well mean
that the owner loses his life’s saving and his/her company. Sometimes ethics of
money making strategies. In a competitive market you gotta fight for everything
and following ethic cans leave you in the dust. In a competitive market you gotta
grow fast and powerfully. Growing slowly will cause your business to die out.
Many huge companies are only where they are today by doing anything they can
and not following ethical standards.

9. Give an example of a SMART objective that could be set for your school or
college. [3]

The school will add 100 new students next year by increasing marketing for are
school. To accomplish this goal we will have to go to more middle school to tell
more kids about are school. Make a school more enjoyable and increase it
repuation.

10. Explain, with two examples, what corporate objective a clothing

manufacturing business could establish. [4]

One corporate example is setting a goal to sell x amount of clothes in a month.

This will make selling the clothes top priority which increases profit and give a the
business a direction forward, Another good objective is trying to make allies with
another business which can help out the clothing business, It will benefit the
business by making them try to seek out opportunities which gives the business a
direction to go to.
11. Why might short term profit maximisation not be an appropriate objective
for such a business? [4]

Short term profit maximization is only useful in the short term and does not
provide stability which can cause fear among investors or workers which isn't good
for business. It can also cause investors to believe your business is doing better
then what it really is causing investors to invest and then quickly withdraw
investments, then everyone looses. Short term profit strategies are a lot riskier and
bolder. So for many businesses a short term profit maximisation strategy is not a
good idea.

12. Why might the owners/directors of a small private limited company set a
“profit satisficing’ objective? [3]
Since they are a private limited company they depend on their investors to survive.
Profit satisficing is making just enough to appease investors. This strategy doesn't
make quick money but it makes long term safe money. For a small group of
investors investing in a small company, profit satisficing is the way to go.

13. Using a business example from your own country, explain why it's key
corporate objectives might change over time. [4]

Dominos pizza started in 1960, December 9th and their business strategies are not
the same as they were when they started. The industry has changed drastically with
new competitors and technologies. With the rise of the internet they now advertise
how you can order their products online and now that the pizza industry is now
more monopolized with only 4 major pizza chains. Dominos has to do all they can
to make their pizza the best pizza in the country and gain new loyal customers.

14. Explain the possible benefits to a clothes retailer of strictly observing an

ethical code when choosing and checking on its suppliers.[6]
Clothes retailers can gain a lot of public support from being ethical. Public support
means money, which attracts investors. Making sure suppliers are getting their
clothes from sustainable sources that don't harm the environment and don't involve
the harm of people. This will give them an edge against other in they're business.
For example many vegans will only support sustainable grown products. The
government might choose to work with you or give you a grant over the next guy
just because your ethical. Choosing not to support non ethical supplier will also
help eliminate those suppliers making the world a better place.

15. Explain with an example from the soft drink industry, how’s a company
marketing strategy depends on the company’s objectives. [4]
A company's marketing strategy depends on the company's objective. For example
Coca Cola, one of the largest soft drink companies in the world will have to fight
hard if they want to stay relevant in the industry. Coming up with better products
and being more ethical. This current business strategy is of result of the very
competitive market their in.

Data response

~~~~~1

1a. Define the term ‘company aim’ [2]

An aim is where the business wants to go in the future, its goals. It is a statement
of purpose.
Toyota Motor Corporation wants to sell more Toyota Sienna’s at the end of the
year 2019 this is an example of a business aim.

1B. Briefly explain the term ‘measurable objectives’

Measurable objectives are objectives that can be measured over time in they're
value or growth.

Corporate objectives are those that relate to the business as a whole. They are
usually set by the top management of the business and they provide the focus for
setting more detailed objectives for the main functional activities of the business.
One example of a corporative objective is the market share of Apple.
Apple had a market share of 48.5% according to Strategy Analytics

2. Explain whether the objectives outlined by Preugeot Citreon fit the SMART
criteria. (6)
The objectives outlined in the Peugeot Citroen do fit the SMART criteria.
Specialized: The goal outlined is to increase car sales by 2017.
Measurable: The quantity of the goal is to increase car sales to 300,000 more by
2017.
Assignable: The human resource department will try to cut down manufacturing
costs by 30%.
Realistic: Increasing car sales by 300,000.
Time: By 2017.
[8]

3. Analyze the importance of the chairmen not only setting an overall aim for
the company but also establishing departmental objectives [6]

By setting up a aim for the company. The company has a motivation to grow and
advance. Setting up a departmental objective sets up different objectives for
different departments in the company which all work towards the major objective
that the whole company stands for. By slicing up the major objective. Goals can be
accomplished more efficiently and faster. It puts less stress on employees such as
managers who must oversee operations in their respected departments.
Departmental objective make their lives a lot easier.

4. To what extent might these objectives have changed before the 2017 time
limit for them is reached. [11]

The market won’t just stay stagnant and the same. This is because popular
consumer goods are constantly changing and therefore new businesses will take the
lead on the forefront of the economy and making money as a powerful business.
This is one reason objectives may change before the 2017 time limit. It will change
and a objective that once worked might not work in the future so it's always good
to be flexible. To adapt to an ever changing market. You must keep in mind that
Peugeot is not the only business whose aim is to become the most competitive car
maker in Europe in 2015. And since the market is always changing and while the
customer demands different kind of products. The objective may have changed by
2017 to maybe the top 10. Because there are other car businesses that can
overcome Peugeot and they have to change their tactics and methods to try to
achieve certain goal.

~~~~2

1. Explain what is meant by “ethics [3]

Ethics are moral codes and standards that people are encourage to follow
these rules generally help encourage well being and happiness in everyone. Ethics
are something that is well viewed upon by most people. Being Ethical is a genuine
business strategy.

2. What benefits could these two airlines have gained if they had not been
caught breaking the law? [6]

The airlines could have gotten away with they're schemes and made a lot of money.
With this hypothetical money that they could have invested in other things or used
that money to fund projects. There are so many possibilities. They could have
invested in faster planes, more fuel efficient planes or larger planes. Or all 3. Their
reputation wouldn't have been ruined. They could have worked with client that
now due to their reputation aren't available. They could have received donations
but now can’t due to what they did.

3. Discuss whether a business acting ethically is likely to be profitable in

the long run. [11]
A number of factors play a part in making a business profitable, including expert
managements teams, dedicated and productive employees, consistent consumer
demand and careful watch over the bottom line. In addition to these well known
business practices, companies that implement a management philosophy that relies
heavily on business ethics are proven to be more successful than those that operate
in unethical manners. Although it may not be the first variable considered in
analyzing the profits of a company , business ethics is an equally important catalyst
to the success of a company. Business that are ethical will likely be recognized for
they're ethical nature and be supported over less ethics driven businesses. Ethical
businesses usually are good for the environment and people. Running an ethical
business can attract potential employees to work for you because your ethical.
Being ethical gives employees a greater reason to work for you. Other business
will be more likely to work with you as it looks better for their own business.
Ethical business strategies also tend to be sustainable and tend to be more stable as
it helps keep the planet earth stable. Also unethical businesses tend to not do
ethical things which can go against the law. Which can cause fines, imprisonment
and just in general bad things to occur to your business.

~~~~~3

1a. Explain the possible benefits of a business of having an objective of

corporate social responsibility. [2]
Corporate social responsibility is a concept that applies to those businesses that
consider the interests of society by taking responsibility for the impact of their
decisions and activities on customers, employees, communities and the
environment.. These businesses obtain responsibility through their actions or
decisions. Benefits can be brand recognition. Afterall if they try to help the
environment they will give a good image on themselves. It would also bring a good
reputation for certain business or corporation. Customer loyalty also increases
because they grow a sort of relationship with such a good environment-friendly
business.

1b. Discuss whether the owners of a farm with three managers for different
departments and 12 workers should adopt a system of “management by
objectives”. [3]
Yes they should. Management by objectives can motivate staff and even if it’s
composed of a small staff it still will help at the end because the purpose is to get
everything going on well and management by objectives would do that. Certain
groups of workers will focus on their part and only to their part so they get more
comfortable with it and they get better at it. This can make the farm have better
attitudes and overall better work.

2. Explain how operating in a very competitive industry could affect the

objectives a business sets. [6]
Well in a very competitive industry a business must be very competitive and do all
it can to get an edge. A business cant have the same marketing strategy in a easy
market then in a competitive market. In a competitive market competitors will do
anything to take you down and limit you. Your going to have to really stand out
and appear different to clients in the sea of cliches. Working on products that will
revolutionize the market and put your company out their. Management by
objective is where what a business does is guided by its objectives. In a
competitive market you must really be guided by guidelines that will cause the
company to grow and stand out.

3. Analyze the benefits to Kenya Re’s of and two of its corporate objectives
apart [8] from CSR. [8]
Increasing return on capital is a good objective as it helps promotes activities that
increase revenue from business. Promoting professionalism and ethics increases
business reputation as being a good business which encourage investors to invest,
encourages clients to work with business and encourages workers to work for
business. It will create a better economy and promote better quality of life and
revenue earned can be invested into school or hospitals. It would be in everyone's
interest to increase professionalism and support ethical standards and ethical
choices. The company can increase its reputation and receive grants or other offers
to work with the government. They could also build a respect to work over seas.
Their are many benefits in being nice.

4. Discuss whether a corporate social responsibility objective is appropriate

for this business. [11]

First lets define corporate social responsibility. Corporate social

responsibility is a concept that applies to those businesses that the interests
of society by taking responsibility. It sets their objectives on a wider
spectrum that not only focuses on maximizing their profits but also focusing
on how their decisions may impact customers, employees, communities and
the environment and how to further help them. In a place like africa, they
could definitely do a lot to improve the quality of life of the people in the
area. They could help provide jobs and give plenty of people a income. They
could also improve the economy by increasing the livelihood to a
population. This means there would be more able bodied individuals that can
work in small jobs or even work for the corporate socially responsible
companies. Having more people working would also give the corportate
company more power because there will be more money flowing in and out
of the company therefore they can further increase the livelihood and create
a positive loop helping both local and national welfares. The disability
program is a good first step towards corporate social responsibility for this
business that should likely benefit them in the long run.

AS Level essay questions

[20 marks, 40 minutes each]

1. A. Explain the possible benefits to a business of having an objective

of corporate social responsibilities. [8]
A business having a corporate social objective will make it strive to help out
the community. By helping out even a small town can have huge impacts,
small changes can have huge effects. Helping out the community can be
done by offering jobs which gives people incomes, supporting local charities
or donating to local towns.
The corporate social responsibility (CSR) is a type of international private
business self-regulation that aims to contribute to socials goals of
philanthropic, activist or charitable nature or by engaging in or support
volunteering or ethically-oriented practices. They operate in a place like
africa where working towards a goal of corporate social responsibility will
be greatly beneficial as the area is already poor. They could help add jobs
and stable incomes. Improve education and giving everyone a better quality
of life. Corporate social responsibility is when a business has goals that
strive towards helping the world as a whole, the environment or people. This
gives worker a sense of purpose making workers motivated and it gives your
company a good reputation. Which can make client choose you over
competitors and make you a prime sponsor or a prime sponsor choise,

1B. Discuss whether the owners of a farm with three managers for a
different department and 12 workers should adopt a system of
management by objective. [12]
with 3 managers it would be way easier to just give each managar a
smaller objective to work on. Each manager can do a small separate work
towards a goal and with combined effort work towards one big goal which
can benefit the company. (how) It eases stress because your dumping the
goal on them all your just dividing it into sizable chunks.(vocab) This
reduced stress makes them more happy to work with you and less likely to
leave. This is also more organized and efficient. (vocab) Corporate objective
is when you give a objective in your company to make your employees have
a goal to work towards. This reduces stress and promotes a good work
environment. It also makes goals happen and take place quicker and better.
Corporate objective applies in here as your giving each manager a objective
to do and work towards.
2. A Explain how ethics may influence business objectives and activities.
[8]
Well if your following ethics you clearly have to have a different business
strategy then if you were just undermining ethics. You aren’t ethical if your
bribing governments or hiring a mob to kick out competitors. If your helping
out the community and doing legal business practices then your not non
ethical. Now let’s define ETHICS in business principles is the study of
appropriate business policies and practices regarding potentially
controversial subjects including corporate governance, insider trading,
bribery, discrimination, corporate social responsibility, and fiduciary
responsibilities. An ethical business is a business that applies a set of moral
principles to all interactions with stakeholders, such as it’s treatment of
influence of employees, customers, suppliers and shareholders, which is
gonna determine whether they want to collaborate with you, and with no
employees ( because of the way that company treat them) that business will
fail which in one influence and the other one: suppliers where they gonna get
their supplies if a business have a reputation for bad ethics.

2. B Evaluate the extent to which the success of a large retail business

depends upon having a clear mission statement. [12]
Well a large retail business will have very complex inner workings and
they're goals will require massive amounts of planning and working together
to accomplish. So having a clear mission statement gives everyone a clear
idea of what they should be doing to achieve that goal. A benefit of CSR to a
business :is improving employees engagement. An owner that believes that
employees are ethical is more cooperative it is also helpful to the owner
peers and will have a better relationship with his/hers coworkers and
employees. CSR companies also has an increase in creativity among all
employees. Also workers will feel a better sense of shared identity with
SOCIALLY RESPONSIBLE COMPANIES. That means that the employees
will work harder, get better results in what they work at, and sometimes
willing to make some ‘good sacrifices for the good of the company’ why
they make sacrifices: because they feel like they are important to this
company and they really are! Another benefit of CSR is better and positive
image to a company and will even get sponsors.Finally Investors can be
attracted by a CSR company because they see that the company is doing
well, also have a positive public image, this is why investors will invest in a
CSR company they can see the future of that company.