Organisational objectives 3 On completing this chapter you should be able to: Know and understand

OBJECTIVES IN ACTION
THE HIERARCHY OF OBJECTIVES
AIM
CORPORATE
OBJECTIVES 
DIVISIONAL OBJECTIVES
DEPARTMENTAL OBJECTIVES
INDIVIDUAL TARGETS
To maximise shareholder value
To increase profits of all divisions by 10% per year
Within one region, to increase market share by 10% and cut
overheads by 5%
R&D:
develop one innovative
product each year
Finance:
reduce long-term
borrowing by 5%
e.g. Marketing:
increase profit
margins by 7%
e.g. In marketing department
– increase sales by an average of 5% per client
– introduce five more clients to the business each year
Figure 1.3.2 
Management by objectives – how the corporate aim is divided at every level of the organisation
Grow revenues by 15% per annum in each of 
the next five years
Corporate objectives
Marketing objectives
Marketing strategies
Marketing tactics
Increase UK market share to 17%
Grow average customer spend by 5%
Refocus product range on high margin items
Introduce CRM systems into industrial division
Improve agreements with key suppliers
Conduct search engine advertising campaign
Figure 1.3.3 
Links between objectives and strategies

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Organisational objectives
41
Without clear objectives, decision-making will lack direction and a means of assessing 
success. Every stage of decision-making – collecting data about options, choosing a 
strategic option and reviewing success/failure – is made much more meaningful with 
speci
fi
c business objectives to refer to.
Strategy and tactics – the key differences
Strategic decisions, e.g. to develop new 
markets abroad
Tactical decisions, e.g. to sell product