Lesson aims
- Define aims, objectives, strategies and tactics and explain their relationships.
- Explain why organisations change objectives and innovate in response to changes in internal and external environments.
Aims are generally considered to be broad and general goals that the organisation would like to accomplish. They may be stated in somewhat vague and optimistic language and involve the medium to long term. Objectives are more concrete and may involve a shorter time horizon. Objectives are often measurable and time-specific, making it easy to evaluate whether they have been attained or not.
The aim of a business is what it wants to achieve by a future date and time. These are its goals and statements of purpose. For example a business may aim to control 25% of a specified market share before 2015.
Business objectives are measurable targets of how the aims can be achieved. There are many different types of business objectives that an organisation can set, such as increasing profits by 20%, or expanding into another market within a particular time period. In all cases in order to make the objectives realizable an acronym used to set objective is SMART:
- Specific – Objectives must be clear.
- Measurable – Easy to determine if they are being achieved or not.
- Achievable – They should be within the reach of the business.
- Realistic –Does the business have the resources?
- Time-specific –A time-frame should be set to meet the objective.
Strategy. A strategy is a plan, approach, or scheme for achieving an aim or objective. Strategies are generally considered to involve important decisions that may be risky and are taken by senior management.
Tactic. A tactic is an approach or scheme for achieving an aim or objective. Compared to strategies, tactics usually involve fewer resources and may be less risky. They may therefore not involve senior management because they can be more easily reversed or modified compared to strategies.
Strategic objectives
- These are broadly defined targets usually set by the strategic decision makers of the business, such as the board of directors of a corporation, and usually encompass the long term, more than 5 years. Strategic planning usually ends with a plan of implementation in the form of objectives. The tools used in Strategic Planning are the SWOT and PEST analysis, which we shall examine later in this chapter.
- The acquisition or take-over of a public corporation would be a Strategic Objective while the purchase of 51% of the shares would be the objective. In this example, the means to accomplishing the strategic objective is by acquiring a majority number of shares.
Tactical/operational objectives
- The day-to-day objectives are also called tactical or operational objectives. These objectives involve the planning behind the most efficient use of resources. Business managers are usually involved in the staffing of the business, the purchase of raw material or inventory and the allocation for production. The clear distinction here is that in larger organisations this would be the case, while in smaller businesses the strategic and operational be made by the same individual.
