Using Objectives and Strategies Notes

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Chapter 1 ­ Revision Booklet
Using Objectives and Strategies
Business Objectives:
Definitions
-Objectives: Goals or targets that must be achieved in order to realise the stated aims of an
organisation. They tend to be medium to long term.
-Corporate Objectives: The goals or targets of the whole organisation, usually based on its mission
or aims
-Functional Objectives: The goals or targets of each of the functional areas of a business, usually
based on its corporate objectives
Corporate Objectives
Corporate objectives are designed to enable a business to achieve its aims or mission
They are set in order to coordinate business activity and give a sense of direction the
organisation
They govern the setting of functional objectives, and thus provide a mechanism for
ensuring that authority can be delegated without loss of coordination
Functional Objectives
Functional objectives are set for each division or department of a business
Designed to ensure that the business achieves its corporate objectives and thus its overall
aims or mission
Functional objectives are set in order to coordinate the activities of division
Relationship between corporate objectives and functional objectives
Corporate objectives vary from firm to firm, depending on the size of the business and the
legal structure
For example, the major objective of a corner shop may simply be to survive
- Whereas a multinational organisation may be more interested in its corporate image and
the possibility of diversifying
Corporate objectives and their contributing functional objectives might include the
following:
- Survival: Functional objectives that will assist a business's survival might include
minimum levels of sales and sales revenue
- Profit Maximisation: Functional objectives that will assist a business in maximising its
profits might include effective marketing in order to increase sales, profit margins, and
minimising costs
- Growth Maximisation: Functional objectives that will assist a business that wishes to
grow might include increasing market share, retaining profit in order to finance growth,
increasing capacity etc.
- Diversification: Functional objectives that will assist a business that wishes to diversify
might include the development of nice markets, raising finance etc.
Lucia Incerti

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Chapter 1 ­ Revision Booklet
SMART Objectives
To be effective, objectives should be SMART:
-Specific: Clearly and easily defined
-Measurable: Quantifiable (e.g.…read more

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