Business Objectives: Definition, Purpose & Types – Video & Lesson Transcript | Study.com

Business Objectives Defined

A business objective, in short, is what a company wants to achieve throughout the year. Instead of focusing on what you’re currently doing in your business, an objective is something you want to achieve going forward. Many times, business objectives are spelled out in a business plan and used as part of the strategic planning process of a company going forward. After all, without objectives, how do you know what to do to get there?

Business objectives function as a way for business owners to make plans, track their progress, and work toward a particular goal. The thing about objectives is that they’re measurable, specific, and tactical. They aren’t general statements like ‘We want to be the most recognizable bookstore in the region.’ Instead, they are focused, such as the objective, ‘We want to open 10 new locations in the coming year.’

There are numerous types of objectives in the business world, ranging from sales and profit expectations to objectives surrounding staff and employees. Let’s examine the major types of objectives a business should consider.

Types of Business Objectives

Among the objectives businesses must consider for their success are plans related to profit, people, and the world around them. Here’s a closer look at a few popular objectives.

The economic objectives of a business could range from wanting to turn a profit to the stability and survival of the business itself. The economy of a business requires the business to be able to support itself and pay its bills, such as rent, utilities, and salaries, while turning a profit. This enables a business to grow and its leadership to prosper. Most business owners and even consumers would tell you that the primary objective for the establishment of a business is economic in nature. That means business owners are in business to make a profit. But a business owner who lists money as his or her only objective is unlikely to be successful overall.

The social objectives of a business pertain to goals for the business as it functions with other parts of society including individuals, other businesses, and institutions in the community. Social objectives are increasingly important to consumers, which means they must be increasingly important to business owners. Some popular social objectives include:

• Production of high-quality products
• Reasonable pricing
• Environmental protection and cleanliness
• Safety for employees and the public
• Adherence to local, state, and federal regulations and requirements

Without people, no business can survive. Most business activities require a certain degree of human activity by employees and toward customers. Businesses that aim to succeed should consider proper treatment of their human capital through things like offering appropriate benefits to employees and providing a safe working environment so they have contented workers.

Successful businesses will contribute to the national landscape and economy in a positive manner. Businesses that are profitable and meet the other objectives discussed in this lesson can help the nation by employing more people and by using resources wisely. This contributes to national self-reliance. Businesses should be good stewards of a nation’s resources and work toward helping develop communities and industries within the nation. Above all, business owners should respect and follow the rules for the operation of their business, including paying taxes and fees and complying with regulations.

Lesson Summary

Business objectives are measurable, specific, and tactical goals set by a business to promote its success. Unlike goals, which are more general in nature, objectives are targeted toward certain plans that business owners and managers set for themselves. Typical business objectives range from economic, focused on the money aspect of the business; social, focused on a business being a good neighbor; human, focused on being good to employees and the public; and national, focused on contributing to the success of the country.