Organisational Objectives

The Core Purpose of Management: Organisational Objectives

Management is responsible for setting and achieving objectives for the organisation. These objectives must be balanced across all areas, keeping in mind the interests of all stakeholders — shareholders, employees, customers, and the government.

The main objective of any organisation is to use human and material resources to the maximum possible advantage. This means fulfilling the economic objectives of a business. These economic objectives are threefold: survival, profit, and growth.

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1. Survival

• What it is: The most basic objective of any business is to survive.
• Why it matters: Management must ensure the organisation continues to exist.
• How it is achieved: To survive, an organisation must earn enough revenue to cover its costs. Without this, the business will fail.

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2. Profit

• What it is: Mere survival is not enough. Management must ensure the organisation makes a profit.
• Why it matters:
  • Profit provides a vital incentive for the continued successful operation of the enterprise.
  • Profit is essential for covering the costs and risks of the business.

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3. Growth

• What it is: A business needs to add to its prospects in the long run. To remain in the industry, management must fully exploit the growth potential of the organisation.
• How it is measured: Growth can be measured by several indicators, including:
  • Increase in sales volume
  • Increase in the number of employees
  • Increase in the number of products
  • Increase in capital investment
  • Other indicators of growth

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Example: E-Choupal by ITC

The textbook provides the example of ITC's E-Choupal initiative to illustrate how a business can fulfil its organisational objectives while also serving society.

• The Problem: Farmers in remote Indian villages lacked reliable electricity, had poor telephone lines, and were largely illiterate. They had never seen a computer.
• The Solution: ITC created a direct marketing channel called E-Choupal. This eliminated multiple intermediaries, wasteful handling, and unnecessary transaction costs.
• The Impact:
  • It is the single-largest information technology-based intervention by a corporate entity in rural India.
  • It transforms the Indian farmer into a progressive, knowledge-seeking citizen, empowering them.
  • It delivers real-time information and customised knowledge to improve the farmer's decision-making ability.
  • It helps align farm output to market demands, securing better quality, productivity, and improved price discovery. …