Summary: Study Unit 6 – Strategic Business Intentions
1. What are Strategic Intentions?
They are the future roadmap of a business, expressed in:
Vision – what the business wants to become (future direction)
Mission – why the business exists (present purpose)
Goals – long-term performance targets
Objectives – short-term, measurable targets
Strategic intentions are planned before a business starts, then revised as
the environment changes.
2. Professional Managers & Strategic Intentions
Traditionally, businesses existed only for owner profit.
Now, professional managers run businesses on behalf of
shareholders.
Consequence: businesses must consider all stakeholders (not just
owners), including social responsibility (CSR).
3. Five Tasks of Strategic Management
1. Shape vision & mission – long-term direction
2. Set long-term goals & short-term objectives – performance
targets
3. Craft business strategies – how to achieve targets
4. Implement strategies – efficiently & effectively
5. Evaluate performance & correct – adjust as needed
4. Hierarchy of Strategic Intentions (Pyramid)
Level Concept Focus
Top Vision Future potential, direction
Level Concept Focus
Middle Mission & Values Reason for existence, beliefs, culture
Lower Goals Long-term aims (e.g., ROI, growth)
Base Objectives Short-term, specific targets
5. Mission Statement Content (7 elements)
Reason for existence
Core products/services
Primary target market
Core competencies
Philosophy (values, priorities)
Self-image & public image
Geographical scope
6. Primary (Economic) Goals of a Business
1. Profit maximisation – positive surplus of sales over costs
2. Rate of return maximisation – profit as % of capital invested
3. Shareholder wealth maximisation – increase share price / owner
value
7. Secondary Goals (Support the primary goals)
Maximum productivity (efficiency + effectiveness)
Growth (assets, sales, market share)
Maximum sales income
Safety & security (liquidity + solvency)
Continuity & survival
Target goals (satisfactory, not maximum performance)
Socio-economic goals (customer satisfaction + CSR)
8. Corporate Social Responsibility (CSR)
Businesses have responsibilities to:
Shareholders & financial community
Environment
Suppliers
Community
Employees
Consumers
CSR is a key part of the trade-off between pure economic goals and
socio-economic goals.
9. Trade-off: Economic vs. Socio-economic Goals
Businesses cannot focus only on profit – they must also consider
society.
Professional managers balance owner wealth with stakeholder
well-being.
This is why CSR, sustainability, and good governance matter.
10. Setting Good Goals & Objectives (SMART)
S Specific
M Measurable
A Achievable
R Relevant
T Time-bound
Emergence of professional managers shifted focus from only shareholders to all
1 B
stakeholders (CSR) – LO1
2 C Crafting business strategies (Task 3) – designing a plan to achieve goals – LO2
Key values = beliefs, culture, ethics (integrity, respect, courage). Vision = future
3 C
position. Mission = reason for existence. Goal/objective = target – LO3
Contains core products (EVs), target market (conscious professionals), core
4 D
competencies (battery tech), philosophy (transparency/innovation) – LO4
Rate of return = net profit / capital = 10%, below the 12% benchmark. Profit
5 B
maximisation ignores capital efficiency – LO5
Safety & security = liquidity (current ratio) and solvency (debt/asset ratio).
6 C
A=productivity, B=growth, D=sales income – LO6
Trade-off: lower profit (economic) for environmental responsibility (socio-
7 B
economic) – LO7
Shareholder wealth maximisation = share price. Only a company (registered
8 C
corporation) has shares. Proprietorships/partnerships don’t – LO5
Mission statement should include philosophy and public image (7 elements).
9 B
Missing them makes it partially incomplete, not invalid – LO4
1 Short-term, specific, measurable, time-bound = operational objective. Vision is
C
0 broader, long-term goals are longer than 3 months typically – LO3