What’s it: A corporate goal is the overall broad, long-term outcome you want to achieve. It describes what your company wants to be in the future; it doesn’t have to be specific or spell out clear-cut actions. It is different from objectives, which are steps/targets that your company is trying to meet to achieve the goals you have set.
Corporate goals are important to give your business a clear direction. It is meant to focus your company’s attention, efforts, and resources on the most important for success.
What is the difference between corporate goals and corporate objectives?
The terms goals and objectives are often used interchangeably when discussing corporate strategy. Although they look similar, however, the two are different.
- Goal is a broad target or result that your company wants to achieve. It is sometimes abstract but realistic. It takes longer to achieve (long term). It describes what your company wants to achieve without specifying how and when it will be achieved. For example, your company wants to be a market leader.
- Objective is what you have to achieve for your goal to be realized. In other words, it specifies how your company will achieve your goals, that is, by breaking them down into more specific and measurable objectives, targets, or results. It is also time-specific, i.e., when will your company reach it? For example, suppose your company targets sales to grow higher than the industry average, say 10% in the next year.
Why are corporate goals important?
Several reasons explain why having corporate goals is important for your company. It has the following benefits:
A guide to setting your business objectives. Goals form the basis for developing objectives, which specify what your company will achieve at all levels of the hierarchy, from upper, middle, and lower management. It can be strategic, tactical, and operational objectives. All of these objectives should support your company’s goals.
As a framework for developing business strategies and plans. With clear goals, management in your company can develop a series of strategies and action plans to achieve them. It also serves as a guide in prioritizing resource allocation.
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Develop synergies across the organization. The objectives in each department or division must be connected and support each other to achieve your company’s goals. Moreover, breaking the objectives down to the operational and individual levels creates a sense of urgency and responsibility among your employees. They feel they have contributed to the company’s goals and success, encouraging them to be more responsible and try to give the best for your company.
As a basis for evaluation. Through goal setting, you can evaluate whether the company is successful in achieving its goals or not. It may require corrective action if your company fails to achieve its goals. Or, it requires you to maintain or even improve your current performance, considering the dynamic market and competition.
What are examples of corporate goals?
As I mentioned earlier, corporate goals are long-term targets and don’t have to be specific. For example, your company’s goal is to “become a market leader.” You design and define it to guide the entire organization and not specify how it will be achieved.
To realize the goal, you require steps to achieve it. You then break it down and detail it by setting an objective, which is more specific and measurable. For example, to achieve a market leader, your company has the following objectives:
- Improve the quality of your products through the zero-defect principle.
- Improve customer service by setting a maximum limit for customer complaints.
- Target sales to grow higher than the industry average, say 10% for the next year.
- Increase spending on promotion, for example, from 2% of the sales target to 5%.
- Intensify marketing channels; for example, your company develops online channels to increase reach.
“Being a market leader” is an example of a corporate goal. Other possible examples are:
- Increase returns to shareholders
- Increase profitability
- Increase market share