Long term objectives are the expected results that firms will accomplish when pursuing certain strategies. They state what is to be achieved by when and should be quantified if possible. The achievement of corporate objective should result in the fulfillment of corporation’s mission.
Both the strategies and the objectives should be consistent and time frame normally extends from 2 to 5 years.
Some of the areas where a firm can establish its long term objectives are:
- Profitability (Profits)
- Efficiency (Low cost)
- Growth (increase in assets, sales)
- Shareholder wealth (dividend plus stock price appreciation)
- Reputation (being considered a top firm)
- Market leadership (market share)
- Technology (innovation, creativity)
- Survival (avoiding bankruptcy)
Set objectives should be quantitative, measurable, realistic, understandable, challenging, hierarchical, obtainable and congruent among organizational unit. Objectives should also be associated with a time line.
Long term objectives are needed at the corporate, divisional and at functional levels of an organization. The set objectives also form a base for the evaluation of managerial performance and, in broader sense, the performance of the whole organization in the end.
Success of any firm heavily relies on clearly stated and communicated objectives.
1. It helps stakeholders understand their role in an organization’s success.
2. It provides a basis for consistent decision making by managers whose values and attitudes differs
3. It sets forth organizational priorities and stimulates exertion and accomplishment.
4. It serves as standards by which individuals, groups, departments, divisions, and entire organization can be evaluated.
5. It provides the basis for designing jobs and organizing activities to be performed in an organization.
6. Overall, it provides an organization with direction and allow for organizational synergy.... [continues]
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"Setting Long Term Objectives." StudyMode.com. 09, 2008. Accessed 09, 2008. http://www.studymode.com/essays/Setting-Long-Term-Objectives-164157.html.