Organisational objectives 3 On completing this chapter you should be able to: Know and understand

R – Realistic and relevant
Objectives should be realistic when compared with 
the resources of the company, and should be expressed in terms relevant to the 
people who have to carry them out. For example, informing a factory cleaner about 
‘increasing market share’ is less relevant than a target of reducing usage of cleaning 
materials by
20%.
• 
T – Time-specific
A time limit should be set when an objective is established. For 
example, by when does the business expect to increase pro
fi
ts by 5%? Without a time 
limit it will be impossible to assess whether the objective has actually been met.
Interlinking aims, objectives
and strategies
Corporate aims relate to the whole organisation. They need to be broken down into 
speci
fi
c tactical or operational objectives for separate divisions.
Divisional, operational objectives are set by senior managers to ensure:
• coordination between all divisions – if they do not work together, the focus of 
the organisation will appear confused to outsiders and there will be disagreements 
between
departments
• consistency with strategic corporate objectives
• adequate resources are provided to allow for the successful achievement of the 
objectives.
Exam tip:
Remember the 
acronym: SMART.

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Business organisation and environment
40 
1.3
Once divisional objectives have been established, these can be further divided into 
departmental objectives and 
fi
nally budgets and targets for individual workers. This 
process is called management by objectives (MBO), as shown in 
Figure 1.3.2
.
Relationship between aims, objectives, strategy 
and
 
tactics
Aims and objectives provide the basis and focus for business strategies – the long-term 
plans of action of a business that focus on achieving its aims. Without a clear objective 
a manager will be unable to make important strategic decisions. For example, should a 
marketing manager decide to sell products in new markets or attempt to sell more in 
existing markets? Without a clear corporate objective, which is then translated into a 
marketing objective, decisions of this kind become very arbitrary.
For any corporate aim to be successfully achieved, there has to be an appropriate 
strategy
– or detailed plan of action – in place to ensure that resources are correctly 
directed towards the 
fi
nal goal. This strategy should be constantly reviewed to check 
whether the business is on target to achieve its objectives. Both the aims of an 
organisation and the strategies it adopts will often change over time. Indeed, a change of 
objective will almost certainly require a change of plan too. A poor plan or strategy will 
lead to failure to reach the target.
These links between objectives and strategies are shown in 
Figure 1.3.3
.