Most of the ordinary people would say businesses’ main aim is to make profit. True enough, but this may not be the case; profit is not the main priority for all business organizations. However, if a business doesn’t have clear objectives it’s more likely to fail – at some point. Nowadays many companies have a mission statement to ensure they have an overall vision for the company, and they work hard to achieve their targets. A mission-statement states what the company wants and the objectives state what the business has to achieve in order to get what it wants.
Business Objectives can be categorized into two:
- Strategic objectives – usually long-term and maybe the ultimate goal for the business.
- Tactical objectives – concerned with the day-to-day running of the company.
*tactical objectives help to achieve the strategic objective/s.
Business objectives should be (SMART): – a theory
- Specific – state exactly what is expected.
- Measurable – set a target that can be assessed.
- Achievable – make the objective realistic.
- Relevant – the objective set should be helpful to the overall future of the company.
- Time limited – the objective should have a future deadline.
Business objectives perform PRIME functions:
- Planning – objectives act as a baseline for planning and, entire business plan is built upon business objectives.
- Responsibility – objectives define and delegate responsibility. Objectives are set as targets for managers and they are responsible for achieving those objectives.
- Integration – objectives combine all aspects of the business by making sure that all departments and all employees are working towards achieving the common goal of the business. This is known as goal congruence.
- Motivation – objectives set targets for employees and motivate them to achieve those targets. Objectives create the need for achievement among employees which results in motivation among workers.
- Evaluation – objectives are used to set targets at the beginning of the period. When the plan is implemented performance is measured/evaluated against the targets/objectives which were set at the beginning of the period.