Definition of corporate goals
By definition, an organization’s corporate goals refer to the ultimate general or complete results an organization desires to accomplish in the long term. In particular, corporate goals generally describe the ultimate long-term vision of an organization after a certain period. Usually, corporate goals are general and long-term because they describe an organization’s vision broadly and are targeted for accomplishment over an extended period or by a future date/period.
It is essential to observe that corporate goals are not the same as corporate objectives. In contrast, corporate objectives are the specific actions that comprehensively describe how an organization intends to perform certain actions or procedures to help the organization realize its corporate goals. Whereas corporate goals broadly describe an organization’s vision in the long term, corporate objectives are the specific actions that define how the organization will achieve its corporate goals. In particular, corporate objectives consist of specific, measurable, achievable, realistic, and time-specific (SMART) targets.
Take, for instance, a seaport whose corporate goal is to become the preferred port of choice through measures such as reducing customer complaints by fifty percent and halving the cargo-handling time to reduce delays within a year. In the above example, unlike the goal, which is broadly stated, i.e., be the preferred port of choice, the objectives specifically detail the steps of becoming the preferred port of choice, i.e., reducing customer dissatisfaction by half and reducing the time taken to handle cargo.
Examples of corporate goals
As mentioned in the above section, corporate goals are broad and long-term compared to corporate objectives that tend to be SMART. Therefore, corporate goals are broad standards that companies aim to achieve in the long-term. An example of a corporate goal can be “steering a company to profitability.” The above is an example of a corporate goal seeing as it is broad and long-term. For instance, the goal does not describe how the corporation intends to realize its targets. Additionally, this is a long-term ambition, as it cannot happen overnight. This is distinct from corporate objectives. The range of possible corporate objectives that would help a company achieve profitability includes lowering waste, improving quality, increasing sales by 10%, and cutting expenditures by 25%, among others. In contrast to broad corporate goals, objectives are rather SMART. An objective to grow sales by 10% over one year is specific, measurable, attainable, realistic, and time-specific. Indeed, the objective mentioned above states a measure the company intends to undertake and the period; while it is also realistic, i.e., the target is reasonable. Other corporate goals include growing brand reputation, greening company operations, and increasing sales.
Importance of corporate goals
The importance of goal setting cannot be emphasized enough. A business or corporation exists for particular or various purposes. Businesses may exist for several reasons, including driving innovation, offering employment, and driving wealth generation, among various other reasons. In the most basic way, therefore, goals provide a broad map of how the business intends to attain its reason for existing. A discussion of the importance of corporate goals will certainly help provide further insights regarding the importance of corporate goals.
Goals set the path for attainment of the business’ primary purpose
The primary importance of a goal is that it describes the organizational purpose, helping to provide the plot to achieve corporate ambitions such as business growth. As mentioned earlier, goals broadly state the direction or ambitions of an organization. This can include growing sales. The goal to grow sales broadly states the organizational plan to increase sales, setting the groundwork for formulating objectives to help realize the goal.
Framework to evaluate company performance
Goal making, for instance, a goal to increase sales, provide the structure to evaluate company performance at a future date. Organizations later evaluate goals and objectives to establish their impact after operationalizing plans. Written organizational goals and objectives provide the structure to compare the performance of an organization compared to expectations. Goals thus provide the structure to evaluate performance.
Structure for developing objectives
Company goals offer the foundation for formulating objectives for a particular goal. As mentioned earlier in this discussion, objectives describe the actions that will help a company attain its goals. A goal such as growing sales by 10% precisely describes how the organization aims to increase profitability. Since objectives are detailed descriptions of procedures to attain goals, goals form the basis for creating objectives.
Goals provide a source of motivation
Goals can be important sources of motivation for corporations. For example, finding that a company has attained its goals after the set period can motivate the employees. It would spark pride knowing that a goal has materialized and even provide inspiration to set other targets.