Organisational objectives 3 On completing this chapter you should be able to: Know and understand

Size and legal form of the business
Owners of small businesses may be concerned only with a satis
fi
cing level of pro
fi
t. 
Larger businesses, perhaps controlled by directors rather than owners, such as most 
public limited companies, might be more concerned with rapid business growth in order 
to increase the status and power of the managers. This is often a result of the divorce 
between ownership and control. Directors and managers may be more concerned about 
their bonuses, salaries and fringe bene
fi
ts
– which often depend on sheer business size – 
than on maximising returns to shareholders.
the company has dumped it in old quarries where it causes smells and gas emissions. 
Investment in labour-saving equipment has allowed the business to save on wage 
costs. The company’s new mission statement is ‘to become the country’s number one 
waste business and to protect the environment for our children’s benefit’. This has 
been explained to all shareholders in a recent letter to them, but the workers of the 
company were not involved in helping create the mission statement and they have not 
been informed of it.
The latest company accounts stated: ‘We aim to maximise returns to shareholders 
through a strategy of aggressive growth. Our objectives are to expand year on year.’ 
These accounts contained the following data.
2011
2012
2013
2014
Sales revenue ($m)
20
25
35
40
Net profit ($m)
3
8
10
20
Total value of country’s 
waste market ($m)
120
140
160
180
Number of employees
1000
950
900
800
26 marks, 52 minutes
1.
a.
Define the term ‘mission statement’. 
[2]
b.
Explain