Business objectives are the ends that an organisation sets out to achieve. A business creates business plans to enable it to achieve these ends and plans are the means to the ends.
The objectives and plans that an organization creates are determined by balancing the requirements of the various stakeholders in the organization. The stakeholders are those individuals and groups that are affected by and have an interest in how the business is run and what it achieves. Every business has a range of stakeholders. For example,
the objectives that a company establishes are based on blending the various interests of these stakeholder groupings.
An objective to be the market leader, will benefit all stakeholders because customers will receive better quality products, shareholders will receive high dividends, employees will receive good wages.
Organizations create a hierarchy of objectives. The top level an organisation will often create a
mission setting out the purpose of the organization. This will be followed by a set of objectives relating to such aspects as:
- market share.
- customer satisfaction.
- employee satisfaction.
- ROI to shareholders.
- reducing pollution.
- green energy
Objectives need to meet a number of criteria if they are to be useful.
- If possible it is helpful to quantify objectives, e.g. to increase market share to 55%, to increase customer satisfaction levels to 95% etc.
- They need to be challenging. Objectives shouldn't be too easy to achieve.
- They need to be attainable. They shouldn't be unrealistic.
- They should be understandable so that they are easy to communicate.