Sample Business Objectives

Different objectives imply different courses of action. In order to guide future decisions, it is necessary to clarify, in priority order, the objectives of the business. Long winded business goals like "To be the best in every activity and to produce the best products at lowest cost and to maximize this year's profitability and shareholder value - all at the same time" sound great, but mean little.

The challenge for most businesses is establishing priorities. The more specific the objectives, especially when presented with measurable goals, the better.

For example, imagine it's December 1 and an opportunity presents itself whereby a manager could overspend the budget by $1 million to earn a guaranteed $3 million in the next fiscal year. If annual profitability and annual bonuses rank as higher objectives than maximizing shareholder value, from the business manager's point of view, the opportunity will not be pursued.

In practice, market share goals are the most likely goals to conflict with annual profitability, shareholder value and other goals. Even after the debacles in the banking and real estate industries in the eighties, many managers still measure success primarily in terms of market share.

The bottom line is that objectives need to be specific, well thought out, in priority order, agreed to, and communicated.

Although "Maximizing Shareholder Values" is the right answer, most companies still don't get it. And many companies that think they get it, don't have a complementary environment and human resource environment to implement it.

Sample business objectives:

• Increase Market Share
• Build a Better Product than the Competition
• Maximize Customer Satisfaction
• Help Other Corporate Businesses
• Reduce Number of Employees
• Cut Expenses
• Maximize Revenue
• Maximize Annual Profit
• Maximize Return on Investment (ROI)
• Maximize Return on Equity (ROE)
• Maximize Return on Assets (ROA)
• Maximize Return on Sales (ROS)
• Maximize Shareholder Value & Discounted Cash Flow
• Expand into New Markets
• Minimize Risks
• Provide for the Employees
• Maximize My Bonus
• Help Community

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Copyright 2008 Alan S. Michaels               Alan S. Michaels    All Rights Reserved.
Last modified:   Tuesday February 19, 2008