The objectives of a company are results, situations or states that a company intends to achieve or to those it intends to reach, over a period of time and through the use of the resources with which it has or plans to have.
Establishing goals is essential for the success of a company as they establish a course to follow and serve as a source of motivation for the members of the company.
But in addition to that, other advantages of setting goals for a company are:
-Allow focusing efforts in the same direction.
-Serve as a guide for the formulation of strategies.
-Serve as a guide for resource allocation.
-Serve as the basis for the performance of tasks or activities.
-Allow to evaluate results by comparing the results obtained with the proposed objectives and, thus, to measure the efficiency or productivity of the company, each area, each group or each worker.
-Generate coordination, organization and control.
-Generate participation, commitment and motivation and, when they reach them, generate satisfaction.
Characteristics of the objectives
In order for a company’s objectives to achieve the benefits described above, they must have the following characteristics:
They must be measurable, that is, quantitative and linked to a time limit. For example, unlike the “increase sales” goal, a measurable goal would be “to increase sales by 20% for the next month.” However, it is possible to use general objectives such as “increase sales”, but as long as these are accompanied by measurable goals that together allow the generals to be reached.
They must have a clear, understandable and precise definition. They should not be confusing or leave too much room for interpretation.
They must be feasible. They must be within the possibilities of the company, considering the capacity and resources (human, financial, technological, etc.) with which it counts, as well as the availability of the time necessary to fulfill them.
They must be challenging (albeit realistic). They should not be something that will happen anyway, but something that means a challenge or a challenge. Unambitious goals are not very useful or provide greater motivation, although easy objectives can serve as a stimulus to not leave the road as soon as it has started.
They must be realistic and reasonable. They must considering the conditions and circumstances of the environment in which they are intended to comply, as well as the capacity and resources of the company. For example, unlike the target “to increase from 10 to 1000 employees in a month”, a realistic goal would be “to increase from 10 to 20 employees in a month”.
They must be aligned and consistent with other objectives and with the vision, mission, policies, culture and values of the company.
Types of objectives
There are different types of objectives in a company, which can be classified according to their nature, hierarchy and scope of time.
A. General objectives
Also known as generic goals, they are objectives based on general or generic expressions. Some examples of general or generic goals are:
-Be the market leader.
-Generate greater profits.
-Obtain greater profitability.
-Greater participation in the market.
-Be a leading brand in the market.
-Be a recognized brand in the market.
-Increase the number of sellers.
-Increase the number of assets.
Within the general objectives is the vision of the company, which is the main objective pursued by a company.
B. Specific objectives
They are concrete goals expressed in terms of quantity and time. Specific objectives are necessary to achieve the general objectives. Some examples of specific objectives are:
-Increase monthly sales by 20%.
-Sell 10 000 products before the end of the year.
-Generate profits greater than US $ 20,000 for the next period.
-Obtain an annual return of 25%.
-To achieve a market share of 20% for the second half of the year.
-Produce an annual return of 14% on investment.
-Increase production efficiency by 20% for next year.
-Tripling production before the end of the period.
-Increase the number of workers from 10 to 12 in a month.
-Reduce the level of absenteeism of workers by 5% before the end of the year.
-Acquire 2 new machines for the second semester.
-Open 3 new commercial premises for the first quarter of next year.
Sometimes specific objetives are referred to as goals.
According to their hierarchy, the objectives are classified in:
a. Strategic Objectives
Also known as organizational objectives, are objectives that consider the company as a whole and serve to define the direction of it. They are formulated by the owners or top managers of the company. They are usually general and long term. Each strategic objective requires a series of tactical objectives.
b. Tactical objectives
Also known as departmental objectives, they are objectives that are given at the level of areas or departments. They are formulated by the managers or the managers of the company. They are usually of medium term. They are set according to the strategic objectives. Each tactical objective requires a series of operational objectives.
c. Operational objectives
They are objectives that are given at the level of operations. They understand the tasks or activities of each area. They are formulated by area managers or administrators. They are usually specific and short term. They are based on tactical goals.
According to their scope of time, the objectives are classified in:
a. Long-term goals
They are generally formulated for a period of five years and at least three.
b. Medium-term objectives
They are usually formulated for a period of one to three years.
c. Short-term objectives
They are usually formulated for a term not exceeding one year.
Recommendations on the use of objectives
To conclude, let’s look at some tips related to the use of objectives:
General objectives should be established, but as long as they serve as a reference for setting specific objectives. Establishing only general objectives can create confusion and lack of awareness of where you really want to go. It is always necessary to accompany them with specific objectives.
It is necessary to establish objectives for the company in general, for each area or department, and for each work team. The objectives for each team are set according to the objectives of each area, and the objectives of each area are formulated according to the objectives of the company.
The objectives of an area or department must be consistent with the objectives of other areas or departments. For example, it would not be consistent for production to aim to increase the number of products manufactured if marketing does not have the resources to sell additional products.
The objectives must be communicated at all levels of the company. They should be communicated and be reminded permanently to whom it may concern.
Priorities should always be set at the time of meeting the objectives. The most important, relevant or urgent objectives must first be met, and priority must be given to strategic objectives rather than tactical, and tactical rather than operational.
The objectives should not be static. There must be sufficient flexibility to adapt to unexpected changes that could happen in the environment, such as sudden changes in tastes or preferences of consumers as a product of new fashions.
Once established, the objectives should be periodically reviewed to ensure that they are still the results that the company intends to achieve or continue to be in accordance with the conditions of the environment, and change or modify them if necessary.