Objectives

The first step in planning is setting objectives. An objective is the desired future position that management wants to reach. It is the end result toward which all business activities are directed. Without clear objectives, planning has no direction.

Objectives are the foundation of the organisation. They are defined as the ends which management seeks to achieve through its operations. In simple terms, an objective is what you would like to achieve — the end result of activities. For example, an organisation may have an objective of increasing sales by 10 per cent, earning a reasonable rate of return on investment, or earning a 20 per cent profit from business.

These objectives represent the end point of planning. All other managerial activities — organising, staffing, directing, and controlling — are also directed towards achieving these objectives. They are not just a part of planning; they guide the entire management process.

Objectives are usually set by the top management of the organisation. They focus on broad, general issues rather than day-to-day details. They define the future state of affairs which the organisation strives to realise. In this way, they serve as a guide for overall business planning.

Different departments or units within the organisation may have their own objectives. For instance, the marketing department might aim to increase market share, while the production department targets reducing waste. These departmental objectives must align with the overall organisational objectives.