Corporate Objectives

This section explains Corporate Objectives, covering: Development of Corporate Objectives from Mission Statement and Corporate Aims and Critical Appraisal of Mission Statements and Corporate Aims.

Development of Corporate Objectives from Mission Statement and Corporate Aims

Corporate objectives are broad, long-term goals set by an organisation to achieve its mission. They are more specific than the mission statement and often serve as a roadmap for strategic planning and decision-making. The mission statement, often developed at the company’s inception, outlines the purpose and core values of the business. Corporate aims, which are derived from this mission, provide a more focused, tangible set of goals.

The process of developing corporate objectives typically follows these steps:

1. Mission Statement: This is the foundation of the company's identity. It answers the question, "Why do we exist?" A well-crafted mission statement reflects the company’s core values, culture, and purpose. It is often aspirational and can be more philosophical or abstract. For instance, a company might have a mission statement like, "To provide high-quality, sustainable products that improve everyday lives."
2. Corporate Aims: Building on the mission statement, corporate aims translate the business’s core values into broad, long-term intentions. Aims are general statements of what a company hopes to achieve over an extended period. For example, the aim might be to expand into new markets, innovate continuously, or lead in customer satisfaction.
3. Development of Corporate Objectives: Corporate objectives are specific, measurable targets that businesses set to achieve their broader aims. These objectives are more quantifiable and short-to-medium term compared to corporate aims, providing clear direction for the organisation. They are usually SMART (Specific, Measurable, Achievable, Relevant, and Time-bound). For instance, if the aim is market expansion, a corporate objective could be: "Increase market share by 10% in the next two years in the European market."
4. Aligning Objectives with Mission and Aims: Corporate objectives must always align with the business’s mission and aims. This ensures consistency in strategy and decision-making across all departments and functions of the business.

Example:

• Mission Statement: "To provide affordable and sustainable energy solutions to communities worldwide."
• Corporate Aim: "To become a leader in renewable energy production by 2030."
• Corporate Objective: "Increase renewable energy production capacity by 15% annually over the next five years."

Critical Appraisal of Mission Statements and Corporate Aims

Mission statements and corporate aims serve as the guiding principles for any organisation, but their effectiveness can be critically appraised in several ways:

1. Clarity and Focus: A well-written mission statement should be clear, concise, and specific. If the mission is vague or overly complex, it can create confusion about the company’s purpose, making it difficult for employees, customers, or investors to understand the organisation’s goals. A critical evaluation would look for whether the mission statement communicates a precise direction or whether it is too abstract. For example, a mission statement like "To be the best in the industry" is vague and lacks specificity, whereas "To be the leading provider of affordable electric vehicles" is more clear and actionable.
2. Relevance: Mission statements should remain relevant to the current market and business environment. Over time, changes in consumer preferences, technological advancements, or competitive landscapes may necessitate a revision of the mission statement. If a company’s mission statement is no longer aligned with its activities, it may need to be revisited. For instance, if a company in the traditional retail space has pivoted to e-commerce, its mission statement may need to reflect this shift.
3. Achievability: Mission statements and corporate aims should be ambitious yet achievable. Overly ambitious aims can demotivate employees if they seem unattainable, while too modest an aim can limit the company’s growth potential. The balance between ambition and realism is critical. A critical appraisal might assess whether the company's objectives are achievable in light of current resources, capabilities, and market conditions.
4. Stakeholder Considerations: Mission statements and aims should consider the interests of all stakeholders, including customers, employees, shareholders, and the wider community. If a company’s mission fails to reflect its broader social responsibilities, it could face reputational risks. For example, a business that focuses only on profitability without acknowledging environmental or social impacts may alienate customers who prioritise sustainability.
5. Consistency Over Time: Mission statements should provide long-term stability, but they should not be so rigid that they prevent adaptation to market changes. A successful business must be able to evolve, but still stay true to its core mission and values. Over time, the company may revise its aims, but these changes should not be so frequent or drastic that they undermine the original intent.
6. Impact on Decision-Making: A clear mission statement and well-defined corporate aims should provide a foundation for strategic decision-making. If the mission statement is too generic, it might be challenging for managers to make decisions that align with the company’s long-term objectives. The critical assessment should examine how well the mission and aims influence the organisation's strategy and day-to-day operations.
7. Benchmarking and Performance Measurement: The corporate aims and mission statement should provide benchmarks to evaluate performance. For instance, if a company’s mission is focused on customer satisfaction, performance metrics related to customer feedback, loyalty, or retention would be relevant. A critical appraisal would look at whether the company is measuring its progress effectively against the objectives derived from its mission.

Example of a Critical Appraisal:

• Mission Statement: "To create a world where everyone has access to clean water."
• Critical Appraisal: This mission is clear, concise, and globally relevant. However, it might be critiqued for being overly ambitious, given the scale of the challenge. While admirable, the company must define measurable objectives, such as "Provide clean water to 10 million people in sub-Saharan Africa by 2030," to ensure that progress can be tracked and outcomes achieved.

Summary

Corporate objectives are derived from the mission statement and corporate aims and provide a more structured and measurable pathway for achieving long-term goals. The development of these objectives should align with the organisation's values, but it is crucial to critically evaluate the mission statement and aims to ensure they are clear, relevant, achievable, and beneficial for all stakeholders. By continually reviewing and refining these statements and objectives, businesses can remain focused and adaptable to changes in the business environment.