Buss3 Exam Guide
Unit 3
Functional Objectives and Strategies
Objectives:
Quantifiable targets or goals to be achieved within a given time frame
SMART- Specific, Measurable, Achievable, Realistic, Timed * Provides focus and direction * Sets a benchmark in which to measure performance
Corporate Objectives
The long term goals of a business * Informs decisions making * Provides strategic direction * Guides organisation
Functional Objectives
Medium to long term goals of the business functions within a business, helping it achieve its corporate objectives * Focussed on corporate objectives, they’re set in order to help achieve these * Provides strategic direction within each function * Impacts upon other functional objectives * Must be coordinated * Set for each division/department to help guide the divisions/departments actions
Businesses will set a range of functional objectives e.g. minimising costs and increasing market share
Functional Strategies
A detailed plan of how a functional area in a business will go about achieving the functional objectives
Understanding Financial Objectives
Financial Objectives
The monetary targets a business wants to achieve in a given period of time.
Cash flow targets
These are set to: * Are required to meet the short term objective of survival * To meet day to day expenses * To achieve specific cash flow targets (to ensure all debts are received within 30 days)
A cash flow target may be to have a surplus of cash in order to take advantage of unforeseen opportunities or unforeseen expenses.
Cost minimisation targets
A firm that can minimise costs can increase profit margins. Actions can be taken to minimise fixed/variable costs. These can be achieved by tactical/strategic changes (i.e. identifying a cheaper source of raw materials) It will only be effective, however, if company revenue and reputation are not diminished.
Return on Capital employed
A measure of the firm’s
Functional Objectives and Strategies
Objectives:
Quantifiable targets or goals to be achieved within a given time frame
SMART- Specific, Measurable, Achievable, Realistic, Timed * Provides focus and direction * Sets a benchmark in which to measure performance
Corporate Objectives
The long term goals of a business * Informs decisions making * Provides strategic direction * Guides organisation
Functional Objectives
Medium to long term goals of the business functions within a business, helping it achieve its corporate objectives * Focussed on corporate objectives, they’re set in order to help achieve these * Provides strategic direction within each function * Impacts upon other functional objectives * Must be coordinated * Set for each division/department to help guide the divisions/departments actions
Businesses will set a range of functional objectives e.g. minimising costs and increasing market share
Functional Strategies
A detailed plan of how a functional area in a business will go about achieving the functional objectives
Understanding Financial Objectives
Financial Objectives
The monetary targets a business wants to achieve in a given period of time.
Cash flow targets
These are set to: * Are required to meet the short term objective of survival * To meet day to day expenses * To achieve specific cash flow targets (to ensure all debts are received within 30 days)
A cash flow target may be to have a surplus of cash in order to take advantage of unforeseen opportunities or unforeseen expenses.
Cost minimisation targets
A firm that can minimise costs can increase profit margins. Actions can be taken to minimise fixed/variable costs. These can be achieved by tactical/strategic changes (i.e. identifying a cheaper source of raw materials) It will only be effective, however, if company revenue and reputation are not diminished.
Return on Capital employed
A measure of the firm’s