Objectives are organizations’ performance targets-the results and outcomes it wants to achieve. They function as a yardstick for tracking an organization’s performance and progress.
Business organisations translate their vision and mission into objectives.
They also act as benchmarks for guiding organisational activity and for evaluating how the organization is performing. Objectives are open-ended attributes that denote the future states or outcomes.
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Objectives are different from goals in the sense that goals are close-ended, precise and expressed in specific terms. Thus, the goals are more specific and translate the objectives to short-term perspectives. However, this distinction is not followed every time the two terms are used; sometimes interchangeably. Objectives signify the strategic intent of the organization.
To achieve long-term prosperity, strategic planners commonly establish long-term objectives in seven areas, which are as follows:
1. Profitability
2. Productivity
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3. Competitive Position
4. Employee Development
5. Employee Relations
6. Technological Leadership
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7. Public Responsibility
Qualities that objectives must possess
Objectives should have certain qualities i.e. they should be acceptable, flexible, quantitative, measurable, realistic, understandable, challenging, hierarchical, obtainable, suitable and congruent among organisational units. For an objective to be meaningful it must possess the following characteristics:
a) Objectives should define the organization’s relationship with its environment.
b) They should be facilitative towards achievement of mission and purpose.
c) They should provide the basis for strategic decision-making
d) They should provide standards for performance appraisal.
e) Objectives should be understandable.
f) Objectives should be concrete and specific.
g) Objectives should be related to a time frame.
h) Objectives should be measurable and controllable.
i) Objectives should be challenging.
j) Different objectives should correlate with each other.
k) Objectives should be set within constraints.
Setting objectives requires a balanced scorecard approach. The Balanced Scorecard (BSC) is a tool which measures whether the smaller activities of a company are in balance with its larger objectives in terms of vision and strategy.
By focusing not only on financial objectives but also on the operational, marketing and other objectives, the Balanced Scorecard helps provide a more comprehensive view of business objectives.