Objectives of a Business

Meaning, Definition, Characteristics,

Importance, Scope
Meaning & Definition
Koontz and Weihrich, “ Objectives or goals are the

ends towards which activity is aimed- they are

results to be achieved.”
Kreitner, “An objective is specific commitment to

achieve a measurable result within a given time

frame.”
Objectives are the desired results that a firm

wants to achieve within a specified time.

They guide effort, behaviour and energies of

an organisation and each of its components.

 Desired Results

Guide
the Efforts
and Suggests
Direction
Commitment Specified Time
Characteristics or Nature
Objectives are the desired results

Represents on only end point of planning but the end

towards which organising, staffing, leading and

controlling are aimed.
Basic plan of the firm & part of planning process

They are not activities

They specify a time period

They may be general/specific, immediate/long-term

May be called as realistic expectations

Objectives are multiple and exist simultaneously
within the firm and among the various member of the
organisation.
They are the basic reason for the creation and
functioning of an organisation.
They create commitment and enthusiasm in people.
They act as measure for evaluating.
They can be expressed in qualitative or quantitative
terms.
Importance
Sense of Direction

Guidelines for action

Provide parameters

Provide meaning to the work

Constraints

Source of Legitimacy

Source of motivation

Provides target
Management By Objectives
(MBO)
Meaning & Definition
S. K. Chakravarty:

“MBO is a result-centered non-specialist, operational

managerial process for the effective utilization of
material, physical and human resources of the
organization by integrating the individual with the
organization and organization with the environment.”
Identification of organizational, divisional, departmental,

group and individual objectives.

 MBO is a process whereby superiors and subordinates jointly identify
the common objectives.

Formulation of effective managerial strategies, policies and

procedures.
 Set results that should be achieved.

Measurement of performance in terms of objectives.

 Assess the contribution of each individual, and integrate individuals
with the organization.