Q&A - What are business objectives?

Objectives play a key role in business management. They provide the measurable statements of what a business wants to achieve, from the top (corporate) level of the firm right down to the detailed functional activities of the business.

Objectives can be defined in several ways. Here are some possibilities:

• “The specific intended outcomes of business strategy”
• “The anticipated end results of a programme of activities”
• “Targets which the business adopts in order to achieve its primary aims”

Objectives have several roles in a business. They can provide:

• A clear statement of what needs to be achieved
• A focus for all activity
• Targets for individual and group achievement
• A means of measuring performance

Objectives play a key part in successful business. Objectives exist and operate at different levels in a business – the classic hierarchy is illustrated below:

The objectives cascade down from the mission getting progressively more specific. As you move down the hierarchy, overall objectives are translated into more specific objectives for different parts of the business.

A key advantage of the hierarchy is that it ensures that at each level the objectives are consistent with the objectives above them.

How are objectives used in business? To:

• Implement the mission
• Provide a clear focus for decision making
• Provide a target
• Motivate employees (assuming the objective is achievable)
• Facilitate control of actual performance
• Provide criteria for evaluating performance
• Reduce uncertainty
• Provide a sense of unity