Functional objectives and strategy

Functional Objectives and Strategy

• 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.

• 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

• 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

• 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

• 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.

• 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