What is an Objective, what types of Objectives are there and how can it be articulated?
A desirable state in the future
An objective describes a state in the future that differs from the present state and is desirable. Objectives are an elementary component in society, politics, science, research, business and economics. Companies usually define economic, sometimes also ecological or social objectives. These corporate objectives are both the basis for entrepreneurial action and the yardstick for measuring corporate success.
What types of objectives are there?
Not only companies as a whole but also parts of companies, divisions or departments define and pursue goals. In addition, there are also project goals, development goals and also employees pursue goals. There are numerous ways and means of distinguishing between objectives:
- Monetary and non-monetary objectives or quantitative and qualitative objectives
Monetary objectives are also referred to as quantitative objectives or performance goals, since the respective performance can be clearly defined and measured, e.g. in terms of increasing profits (by x percent), increasing the return on sales (to y percent) or improving liquidity (to z monetary units).
Non-monetary objectives or qualitative objectives can be, for example, the increase in customer satisfaction, the improvement of the image or the increase in employee satisfaction.
It is interesting to note that the primarily non-monetary objectives can also have a monetary influence: if employee satisfaction rises, the sickness rate of employees falls, the image improves, customers prefer to buy the company’s products more frequently. This perspective leads to the fact that, despite the formulation of ecological or social objectives, companies often have to put up with the accusation that they are ultimately only concerned with economic objectives.
- Complementary, competing and indifferent objectives
These kinds of objectives are about the interaction of the objectives with each other. If different objectives complement each other (increase employee satisfaction, lower illness rate and employee turnover), they hinder each other (low-cost production abroad and lower transport costs) or have no influence on each other.
Competing objectives are not uncommon in everyday business life, especially since different internal departments, departments or individual employees are in competition with each other. Therefore, in the course of stakeholder management, companies should also identify and analyse individual stakeholders with their motives and attitudes, and communicate with them regularly.
- Main objectives and secondary objectives or overall objectives and sub-objectives
Main objectives are more important than secondary objectives, so organisations primarily try to achieve their main objectives. The subobjectives are in a logical, hierarchical relationship to the overall objectives. They help to achieve the overall objectives.
It is important for organisations to reconcile the objectives of those affected. Target diagrams, which are often used to represent target hierarchies, can be used for visualisation purposes.
- Strategic and operative objectives or long-term, medium-term and short-term objectives
Short-term objectives have a time horizon of approx. 1 year, medium-term objectives of 3 to 5 years and long-term objectives of 5 to 10 years. The short-term goals are also regarded as operational goals (e.g. the relaunch of a website), the long-term as strategic objectives (conversion of drive technology in automobile production from gasoline and diesel to electric vehicles).
In the practice of enterprises it frequently comes to a mixture of the different kinds: A short-term, operational goal, can be a monetary main objective, which fights with another objective for internal human resources and financial resources. An operational, non-monetary target may be a sub-target that works in the direction of a monetary and strategic overall objective.
In addition to the types mentioned above, there are also behavioural objectives in organisations, for example, which aim at cooperation within the company and/or behaviour towards customers, partners or competitors. In response to questions about improved internal cooperation, there are often regular retrospectives, the definition of sprint goals, the use of good practices or the documentation of lessons learned.
The formulation of objectives
There are different opinions on the formulation of objectives. Some experts call for SMART objectives, i.e.
to formulate. Other experts, on the other hand, argue that this should not be done, as this would restrict the thinking of organisations in a VUCA world and would thus never allow the full potential to unfold.
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