The objectives of a company are the states or situations that the company intends to achieve in the future using its present and foreseeable available resources.
We can therefore say that they would be what the company wants for the future. The place where you want to be, the situation you want to have or the purposes you intend. On the other hand, the company needs to know what it will count on to get them, money, assets, and so on. In this way, the company decides where it wants to go and what path it will take to do so.
Why plan the objectives of a company?
The company needs to know where it is going and what they have to do it. In addition, it is necessary that everyone knows it and therefore, everyone goes in the same direction. That is why the objectives must be communicated to all staff. Communication becomes the main key to the success of the plans.
On the other hand, planning for the future makes it possible to use available resources, and those that are expected to be obtained, efficiently. Therefore, these actions become essential for the survival of the company. Thus, as these are scarce and of alternative use, they can be assigned to those priorities established in the objectives.
The objectives have a series of requirements that must be met and it is convenient to know:
- They must be realistic : This is possibly the main reason for being. An objective must be able to be fulfilled, otherwise it does not make sense.
- They must be consistent : They cannot be contradictory with each other. It does not make much sense to want to expand in the market and in turn have a savings objective in the financial department.
- They must be measurable : That is, they must have a way of checking whether they have been achieved. For example, deciding that we should grow is not a goal. If we specify that we want to grow 3% or that we want to be the second company in market share, it would be.
- They must pose a challenge : That is, within that realism that we mentioned, they must lead to an improvement of the company. Like everything in the market, this carries a risk that must be minimized.
Types of objectives
Goals can be classified in many ways. We are left with a simple and very useful one, not only for the company, but also when we carry out an investigation in any matter:
- General objectives: These are the generic ones, so what they propose are guidelines. They are the long-term goals. They must be clearly stated, so that everyone knows where to go. The vision of the company is the main overall objective.
- Auxiliary objectives: They are those that support the main ones and are much more specific. In this way, once we know where to go, we have to choose the path and for that these auxiliary or complementary objectives are needed. They are always expressed in monetary amounts and time of achievement.
Examples of business objectives
We are going to see some concrete examples of business objectives or one that is not:
- Be the leaders in the sale of potato chips. We are facing a long-term general objective. We see that it is measurable (to be leaders). Realistically, we assume that we are already one of the best. It is consistent and challenging.
- That sales grow 5% in 2 years. A clear specific goal, with a clear measure and time period. Normally this objective could be complementary to the previous general one.
- Being a multimillionaire being today a worker with a low average salary. This is not an objective, it fails above all with the requirement of realism. On the other hand, it is also not coherent since it is very unlikely that this will happen. Of course, we can have a stroke of luck, that we get a prize, but it would not fall within the planning of the objectives of a company.