Understanding Corporate Objectives
Think of corporate objectives as a business's main goals that help turn their big dreams into reality. They're essentially the targets that coordinate everyone's efforts and keep the whole organisation moving in the same direction.
Most businesses focus on three key areas: survival, growth, and profitability. Each comes with its own benefits and challenges that you need to understand for your exams.
Survival objectives kick in when times get tough. Companies focus on covering costs and breaking even rather than chasing massive profits. This approach can make businesses more efficient and unite employees around job security, but it might frustrate shareholders expecting growth and cause companies to miss expansion opportunities.
Growth objectives involve expanding through new products, markets, or locations. Whilst growth can increase market share, spread risk, and create economies of scale, it can also lead to overstretching resources and potentially losing the personal touch that smaller businesses value.
Key Insight: Growth isn't always the answer - small businesses often prioritise independence over expansion, and that's perfectly valid.
Profitability objectives aim to maximise returns whilst minimising costs. This attracts investors and provides funds for future projects, but excessive focus on profit can harm employee welfare and damage the company's reputation if cost-cutting goes too far.