The objectives of a company

7 May 2009 - 19:48

The objectives are results that a company tries to reach, or situations towards where this one tries to arrive.

Importance of the objectives

To establish objectives is essential for the success of a company, these establish a course to follow and serve like source of motivation for all the members of the company.

Others of the reasons to establish objectives are:

• they allow to focus efforts towards a same direction.
• they serve as guide for the formulation of strategies.
• they serve as guide for the resource allocation.
• they serve basic for the accomplishment as tasks or activities.
• they allow to evaluate results, when comparing the results obtained with the proposed objectives and, that way, of measuring the effectiveness or productivity of the company, each area, each group or each worker.
• they generate coordination, organization and control.
• they generate participation, commitment and motivation; and, when reaching them, they generate a satisfaction degree.
• they reveal priorities.
• they produce synergy.
• they diminish the uncertainty.

Target characteristicses

The objectives must be:

Measurable

The objectives must be mensurable, that is to say, must be quantitative and to be bound to a time limit. For example, instead of the objective: “to increase the sales”, a measurable objective would be: “to increase the monthly sales in a 20%”. Nevertheless, it is possible to use generic objectives, but as long as these are accompanied of specific or measurable objectives that altogether, they allow to reach the generic ones.

Clear

The objectives must have a clear, understandable definition and needs, do not have to be lent to confusions nor to leave too many margins of interpretation.

Attainable

The objectives must be possible to reach, must be within the possibilities of the company, considering the capacity or resources (human, financial, technological, etc.) that this one owns. The availability of time necessary is due to consider also to fulfill them.

Challenging

They must be challenging, but realistic. They do not have to be something that of all ways will happen, but something that means defied or a challenge. Little ambitious objectives are not of much utility, although easy objectives at the outset can serve as stimulus not to leave the way this one has hardly begun.

Realists

They must consider the conditions and circumstances of the surroundings where they are tried to fulfill, for example, a little realistic objective would be to increase of 10 to 1000 employees in a month. The objectives must be reasonable, considering the surroundings, the capacity and the resources of the company.

Coherent

They must be aligned and to be coherent with other objectives, the vision, the mission, the policies, the organizational culture and values of the company.

Types of objectives

According to their nature, the objectives are classified in:

a. General missions

They are generic expressions, some examples of general missions or generic they are:

• to be the leader of the market.
• to increase the sales.
• to generate majors utilities.
• to obtain a greater yield.
• to obtain a participation major in the market.
• to be a mark leader in the market.
• to be a mark recognized by its variety of designs.
• to increase the assets.
• to survive.
• to grow.

Within the general missions, is the vision of the company, that is the main general mission that persecutes a company.

b. Specific objectives

They are concrete objectives necessary to achieve the general missions, are expressed in amount and time, some examples of specific objectives are:

• to increase the monthly sales in a 20%.
• to generate monthly utilities majors to US$20 000 as of the next year.
• to obtain an annual yield of 25%.
• to obtain a participation of market of 20% for the second semester.
• to produce an annual yield of 14% on the investment.
• to elevate the efficiency of the production in a 20% for the next month.
• to sell 10 000 products when finalizing the first year.
• to triple the production for year end.
• to acquire 2 new machineries for the second semester.
• abrir 3 stores for the first trimester of the next year.

Sometimes the specific objectives it is known him as “I put “.

In agreement within reach of the time, the objectives can be classified in:

a. Objectives of long term (Strategic)

They are objectives concerning the organization, serve to define the course of the company. They are made generally for a period of five years, and three like minimum. Each strategic target requires a series of tactical targets.

b. Objectives of medium term (Tactical)

They are objectives concerning areas or departments, settle down based on the strategic targets. They are made generally for a period of one to three years. Each tactical target requires a series of operational objectives.

c. Objectives of short term (Operational)

They are objectives concerning operations, settle down based on the tactical targets. They are made generally for a nongreater term of a year.

Recommendations on the use of objectives

In order to finalize we see some advice on the use of objectives:

• general missions are due to establish, but as long as these serve as reference to establish specific objectives. To only establish general missions, can generate confusion and lack of brings back to consciousness of towards where really it is wanted to arrive, is always necessary to accompany them with specific objectives.
• it is necessary to generally establish objectives for the company, each division or area, and each work party. The objectives for each equipment settle down based on the objectives of each area, and the objectives of each area are formulated based on the objectives of the company.
• the objectives do not have to be static, is due to have the sufficient flexibility like being able to adapt them to the unexpected changes that could happen in the surroundings, for example, the sudden changes in the tastes of the consumers like product of new fashions.
• priorities are always due to establish in sequence, fulfilling the objectives of importance or urgency.
• and, finally, the objectives must be known by all the levels of the company, and they always must be made remember permanently.

Labels: Concepts, Management of businesses

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Related contents:

1. The strategies of a company
2. The mission of a company
3. The vision of a company
4. Definition of business and company