Objectives

Once an organisation’s Vision and Mission are determined its objectives should be
defined. Objectives are the concrete steps an organisation should take in order to
accomplish its goals and fulfil its mission. They are the result of planned activity. They
state what is to be accomplished by when and should be quantified if possible.
Objectives may be classified into two categories.
(a). External institutional objectives: They define the impact of the organisation on its
environment. Eg. To develop a high degree of customers’ confidence by sustaining
high standards of product quality.
(b). Internal Objectives: These define how much is expected to be achieved with the
resources that the organisation commands. Eg. Achieve15% return on investment.
Objective Vs Goal:
Often the two terms are used interchangeably. However, they are somewhat different.
Goals are open ended statements of what one wants to achieve with no quantification
of what is to be accomplished and no time criteria for completion. Objectives are close
ended attributes or statements that denote the future state or outcome. Goals are
general / abstract statements. Objectives on the other hand are more specific with a
clear path specification.

Eg., The company wants to increase profitability this year. - Goal

The company wants to increase profit by 10% over last year. - Objective.
Necessity of formal objectives:
It is necessary to form objectives as they define the future state of affairs which the
organisation strives to realise. Objectives speaks about the organisations activities,
where it stands and what it does. Objectives are necessary for the following reasons.
Objectives define an organization relationship with its environment.
It helps in pursuing its vision & mission in long term.
It provides basis for integrating functions and strategic decision making.
It provides standard for performance appraisal.
It helps in evaluation of firm’s effectiveness and efficiency.
It acts as an organisation’s compass to plan its course correction.
It integrates functions and set priorities.

Characteristics of objectives:
- Objectives should be understandable.
- Objectives should be concrete and specific.
- They should be related to time frame.
- They should be measurable and controllable.
- They should be challenging but achievable.
- They should correlate with each other.
- They should be set with constraints.

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