Key Idea: Every business needs to know where it is heading and what it will count as success. This topic is the words that say so, the targets that follow from them, and what happens when doing right and making money pull in different directions.
Vision and mission
- Vision: where the business wants to be in the long run.
- Mission: what it does now, for whom, and how.
- They guide decisions, unite staff and tell customers what to expect.
Common objectives
- Survival, growth, profit and protecting shareholder value.
- Strategic objectives are the long-term aims; tactical objectives are the steps this year.
- Which one matters most depends on the stage and the owners.
Ethical objectives and CSR
- Ethical objectives: aims set because they are right, not because the law demands them.
- CSR: taking responsibility for the effect on staff, suppliers, the community and the environment.
- It can build trust and loyalty, and it costs money.
When objectives clash
- Profit against ethics: the cheaper supplier or the fair one.
- Now against later: this year's dividend or next year's new shop.
- Objectives change as the business grows, the owners change or the economy turns.
The words to know
| Word | Means | Do not confuse with |
|---|---|---|
| Vision statement | where the business wants to be in the long term | the mission, which is about what it does now |
| Mission statement | what the business does, for whom and how, today | an objective, which is a target that can be measured |
| Objective | a target the business sets itself to reach | the vision, which is too broad to measure |
| Strategic objective | a long-term aim for the whole business, set by the owners or directors | a tactical objective, a shorter-term step towards it |
| Tactical objective | a short-term target, often for one department, that moves the business towards a strategic aim | a strategic objective |
| Shareholder value | what the owners' shares are worth, through the share price and dividends | profit for one year |
| Ethical objective | an aim the business adopts because it believes it is right | a legal duty, which it must meet anyway |
| Corporate social responsibility (CSR) | the business taking responsibility for its effect on society and the environment | charity: CSR is about how the business itself operates |
| Greenwashing | claiming to be more ethical or green than the business really is | genuine CSR, which changes what the business does |
For CSR questions: name what the business does, then say whose interest it protects and why that is responsible (or not). One action, one reason, tied to the case. For a clash of objectives: name both objectives, show how one costs the other, then judge which should win for this business now.
Exam-style question
Lena's Bakery Ltd pays its bakers above the legal minimum, gives unsold bread to Second Helpings, and has just switched to a cheaper imported flour in plastic sacks. Explain two ways in which the bakery is improving its corporate social responsibility and one way in which it is not.
Model answer plan
See the mark-by-mark plan — for / against / judgement, with marking guidance — in study mode.
Important: 'The bakery gives bread to charity' is a description. Say why it is responsible: whose interest it protects, and what would happen otherwise. And for the 'not' half, find a real cost to someone in the case, not a guess about what the business might do.
Tap each card to check yourself.
Vision or mission: 'To be the town's favourite bakery in ten years'? Vision. It is about where the business wants to be in the long term. A mission would say what it does now and for whom.
Strategic or tactical: 'Open a fourth shop within three years'? Strategic. A long-term aim for the whole business. 'Raise lunchtime sales by 10% this quarter' would be tactical.
Why would a plc care about protecting shareholder value? Its owners are its shareholders. If the share price falls and dividends stop, they sell, the price falls further, and the company becomes easier to take over.
Name two examples of CSR a bakery could carry out. Any two: paying fair wages, buying from local farmers at a fair price, donating unsold food, cutting packaging, reducing energy use.
Why can profit and ethical objectives clash? The ethical choice often costs more: the fair supplier, the higher wage, the greener packaging. Money spent on it is not profit.
What is greenwashing? Claiming to be greener or more ethical than the business really is. It can damage trust badly once customers find out.
Exam tips
- Vision is where you are going; mission is what you do now. Keep the two apart.
- Strategic objectives are long term and whole-business; tactical ones are short-term steps.
- For every CSR point, name the action and say whose interest it protects.
- A 'one way it is not' point must come from the case: a real cost to a real stakeholder.
- In a clash of objectives, name both sides, then judge which should win for this business now.