Common Business Objectives (DP IB Business Management)
Revision Note
Written by: Lisa Eades
Reviewed by: Steve Vorster
An Introduction to Common Business Objectives
The most effective objectives are clearly stated and allow progress to be assessed
These types of objectives can be summarised using the acronym SMART
SMART objectives
Strategic, tactical and operational objectives should be
Specific - what exactly the business is measuring, such as the value of sales or sales volume
Measurable - a quantifiable success measure, such as a percentage increase
Agreed - the objective is shared with workers and perhaps mutually agreed
Realistic - whilst ambitious, it is capable of being achieved in normal circumstances
Time-bound - a date or time by which the objective should be achieved
Diagram: a SMART tactical objective
Once objectives have been determined, leaders develop strategies which plan how they are to be achieved
Strategies are medium- to long-term plans which should be monitored carefully and reviewed if necessary
Effective strategies take into account the businesses position in the market as well as external factors that may affect their chances of success
Diagram: common strategic business objectives
An Explanation of the Common Strategic Objectives in the Private Sector
Strategic Objective | Explanation |
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Profit Maximisation |
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Growth |
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Ethics & Social Responsibility |
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Survival |
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Protecting shareholder value |
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Changing Objectives in a Dynamic Environment
Businesses operate in a dynamic (constantly changing) environment, which may cause them to pivot between different objectives
Business objectives are influenced by a range of internal and external factors
These changes are often necessary to ensure that the business remains competitive, profitable, and compliant with regulations
Factors Which Cause Business Objectives to Evolve
Factor | Explanation | Example |
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Market conditions |
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Technology |
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Performance |
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Legislation |
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Ethics & Social Change |
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Internal reasons |
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