Functional objectives and strategy

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Functional Objectives and Strategy

Functional Objectives and Strategy

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  • An objective of a busines is an outcome which allows a business to achieve its aims
  • Objectives shouls be practical outcomes from the operation of a business
  • Use SMART criteria
  • S specific - They must set out clearly what a business is attempting to achieve
  • M measurable - They must be capable of being measured so that it can be judged whether or not they have been achieved
  • A agreed -  Everyone responsible for achieving an objective must have agreed with the objective and understood what it meant
  • R realistic - The objective must be achievable given the resources available and the market condition
  • T time specifc - The objective must specify over what period of time it is to be achieved.
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Corporate Objectives

  • Corporate objectives are the objectives set by the most senior management and directors for the company as a whole
  • Tend to be financial objectives
  • Due to being aimed at satisfying the needs of the owners of the company, the shareholders
  • Financial objectives are also easier to quantify at a corporate level than other possible objectives
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Functional objectives

  • Medium to large sized companies are organised on a functional basis
  • Organised into departments
  • Each department specialises in performing a particular type of task
  • Departments include marketing, finance, operations and human resources
  • Functional objectives (department objectives) are the objectives of each department
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Functional and Corporate Objectives

  • Functional objectives will be completely tied to corporate objectives
  • In poorly run companies, functional objectives will lead to outcomes which have little to do with corporate objectives
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Functional Objectives and functional strategies

  • Objectives are not usually reached by chance
  • Businesses have to plan how they will achieve their objectives
  • Long-term planning to achieve objectives is known as STRATEGY
  • Corporate strategy is long-term planning to achieve corporate objectives
  • Functional objectives is long-term planning at a departmental level to achieve functional objectives.
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  • Corporate objectives - the objectives of a medium to large sized business as a whole
  • Functional objectives - the objectives of a department within a business
  • Functional strategy - strategy of a department within a business
  • Objective or goal - a target of or outcome for a business which allows it to achieve its aims
  • Planning - the process of deciding how a business will run and operate in future in areas such as production, marketing and finance and, deciding what resources will be needed and how they be used
  • SMART - acronym for the attributes of a good objective- specific, measurable, agreed, realistic and time specific
  • Strategy - a set of long-term plans drawn up to achieve a given set of objectives
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