Good morning class! Today we are going to discuss business objectives and business decisions. Objectives are the specific goals a business sets to guide its actions. They are like a roadmap. Without them, businesses would make decisions without direction, which can cause confusion and wasted effort.
So how do objectives influence decision-making? Whether a business is making big strategic decisions, medium-term tactical choices, or day-to-day operational decisions, objectives act as a benchmark. For example, if a company wants to increase market share, it may decide to launch a new product or invest more in advertising. Objectives influence areas such as product development, pricing, market entry strategies, and workforce planning.
Business decisions usually follow several logical stages. First, the problem or opportunity is identified. Then objectives are set to guide the decision. Next, information is collected and analysed, followed by developing and evaluating alternatives. After this, the best option is chosen and implemented. Finally, the results are reviewed to see if the objectives were met. Objectives are important at every stage to ensure the business is moving in the right direction.
Objectives are not fixed; they change over time. For example, a start-up might focus on survival and breaking even, while a mature business may aim for sustainability and social responsibility. Internal and external factors like market changes, new technology, financial performance, and stakeholder expectations can all trigger changes in objectives.
Once objectives are set, they are translated into targets and budgets. Targets are specific performance goals like increasing sales by 10 percent. Budgets assign money to activities that support these goals, like £50,000 for marketing campaigns. This helps departments work together and makes it easier to track progress.
Communication is also crucial. Employees must understand and relate to the objectives. When objectives are clear, motivation and productivity increase, and the company culture strengthens. Poor communication, on the other hand, can cause confusion and inefficiency.
A useful way to set effective objectives is the SMART framework. SMART stands for Specific, Measurable, Achievable, Realistic, and Time-limited. For example, a SMART objective could be, “Increase online sales revenue by 15 percent over the next six months.” Using SMART objectives ensures goals are practical, motivating, and easy to monitor.
In summary, objectives form the foundation of good business decision-making. They provide direction, shape strategic and operational choices, guide daily activities, and help align the workforce. By being adaptable, communicated effectively, and structured as SMART objectives, businesses can improve performance and achieve their overall mission.
By the end of this lesson, you should understand how objectives guide decisions, how they are translated into targets and budgets, the importance of communication, and how SMART objectives make goals actionable and measurable.
