1) In order to achieve its main aims a business adopts a plan that contains objectives. There are two types of objectives, strategic and tactical objectives. Strategic objectives are objectives set for the long run; tactical objectives are short day-to-day objectives that the business needs to operate. Setting objectives provides a greater sense of direction for the business. So once an objective is set, the employees, owner and directors even, have a clear pathway and guide of what they want the business to achieve and the objective gives everyone motivation for the business to achieve the objective set, because in the end if the business does well this means a higher income and prestige for everyone. However once the objective has been set it’s not just a question of sitting back and waiting, there are going to be constraints that hinder the progress and in some directions may require a complete change in direction. Thus this means the stakeholders may need to be flexible in what they do, as the tactical objectives may be changing daily, so in the long run the strategic objectives are met. Another reason why businesses set objectives is for an aid to controlling existing and future operations in the business. If no objectives were set the business as a whole would not know how to function, and different departments may be doing different unrelated things. So when setting an objectives it is vital to make it specific so everyone understands what the target is, measurable to ensure success or failure can be ascertained, agreed between different departments and chains, its also important to make it realistic so staff don’t become demotivated. Once clear objectives have been set by these guidelines this will now give a sense of co-ordination to the business. This means that everyone in the business is working towards the same goal in the business.
2) Over time, as circumstances change, businesses may need to adapt their objectives. In particular, a firms tactical objectives might alter, depending on priorities and circumstances in order to achieve both the implementation of the strategic plan and the firms main goals. Always in a business there is going to be constraints both internal and external. These constraints are going to hinder the progress of business.
An internal constraint may simply be a lack of finance to meet chosen objectives, thus this may lead to a business taking out a loan and then this loan might mean the business may fall in debt. So the business will have to change their objectives to suit certain needs. Businesses will also need to change their objectives due to changes in departments. If departments are not working efficiently to set objectives or they feel the objectives are not suitable then it may be necessary to re-set a suitable objective that the certain department may meet. This could be due to a members of staff leaving, from illness or pregnancy and staff cannot handle the workload so the objectives will need to change to still keep everyone motivated. However not all businesses seek growth and profit some businesses have alternative objectives that focus on different aspects of business. An example of this is Ethical and socially responsible objectives – organisations like the Co-op or the Body Shop have objectives which are based on their beliefs on how one should treat the environment and people who are less fortunate. Another example of this is Public sector corporations are run to not only generate a profit but provide a service to the public. This service will need to meet the needs of the less well off in society or help improve the ability of the economy to function: e.g. cheap and accessible transport service.
Those who believe in the stakeholder approach to business argue that taking into account the needs of all stakeholders when setting objectives rather than only one group, usually the owners, this will mean in the long run all stakeholders will benefit. They say that concentrating on one group is counter productive, as it will alienate the others. This may be true, but in the short term at least there have to be trade-offs between various groups. Only in extreme circumstances will the strategic plan have to be changed. Following the attack of 11 September 2001 and the suicide bombing in London 2005, companies in the travel industry had to adapt their plans. For some businesses it even led to a change in their strategic objectives, such as their sales targets, as these were no longer realistic. A business may have a plan in place to deal with such circumstances, this is known as its contingency plan. Airlines have plans to counter any event that is outside their control. For example, during British airways’ dispute with the
catering company Gate Gourmet, contingency plans were quickly put in place to cope with feeding large numbers of passengers. Similarly, the airlines made contingency plans during the Heathrow protests in the summer of 2007.