how objectives might change over time

1.4 Business Objectives – How Objectives Might Change Over Time

Learning objective

Explain why and how a business’s objectives can change over time and assess the impact of these changes on decision‑making.

1. Objectives of Different Types of Organisations

2. Linking Mission, Aims, Objectives, Strategy and Tactics

The hierarchy shows how each level informs the next:

• Mission: The enduring purpose of the organisation (e.g., “To improve the health of the nation”).
• Aims: Broad, long‑term statements derived from the mission (e.g., “Become the leading provider of affordable home‑care devices”).
• Objectives: Specific, measurable targets that translate aims into actionable outcomes.
• Strategy: The overall plan for achieving the objectives (e.g., cost‑leadership, differentiation, market development).
• Tactics: Day‑to‑day actions that implement the strategy (e.g., price promotions, new product launches).

3. SMART Objectives

Cambridge recommends that objectives be SMART – Specific, Measurable, Achievable, Relevant and Time‑bound.

4. Why Objectives Are Not Fixed

Objectives guide strategy, allocate resources and motivate staff. Because the business environment is constantly changing, objectives must be reviewed regularly and revised when necessary.

5. Key Factors That Cause Objectives to Change

• External influences
  • Economic conditions (recession, inflation, exchange‑rate shifts)
  • Technological advances (automation, digital platforms)
  • Legal and regulatory changes (EU environmental directives, data‑protection law)
  • Competitive pressures (new entrants, price wars)
  • Social, cultural and ethical trends (fair‑trade demand, sustainability expectations)
• Internal influences
  • Changes in ownership or senior management
  • Financial performance (profit margins, cash‑flow constraints)
  • Resource availability (human skills, plant capacity, capital)
  • Organisational learning, innovation and R&D outcomes
  • Strategic re‑orientation (diversification, market expansion, restructuring)

6. Corporate Social Responsibility (CSR) & the Triple‑Bottom‑Line

Modern businesses increasingly set objectives across three dimensions. These CSR‑related objectives become part of the overall objective set described in section 1.

• Economic: Profitability, return on investment, market share.
• Social: Community development, employee welfare, ethical sourcing.
• Environmental: Carbon‑footprint reduction, waste minimisation, resource efficiency.

Example: A UK retailer may target a 5 % profit increase (economic), launch a “Buy‑One‑Give‑One” charity programme (social) and achieve a 20 % reduction in packaging waste by 2026 (environmental).

7. Ethical Influences on Objectives

Ethical considerations can reshape profit‑oriented goals. For instance, a fashion brand might abandon a “lowest‑price production” objective after discovering poor labour standards, replacing it with a “fair‑trade certified sourcing” objective, even if unit costs rise.

8. Stakeholder Impact on Objectives

9. Typical Time‑Frames for Objectives

10. Stages of Objective Evolution

1. Setting initial objectives – Derived from the mission, aims and current stakeholder expectations.
2. Monitoring and measurement – Using KPIs and performance dashboards.
3. Environmental scanning – Systematic review of external (PESTLE) and internal factors.
4. Evaluation – Compare actual results with targets; identify gaps and emerging opportunities.
5. Revision – Adjust objectives to reflect new information, constraints or strategic choices.

11. Translating Objectives into Operational Plans

• Strategic plans – Medium‑term programmes (e.g., “Develop a new product line”).
• Operational plans – Detailed actions, budgets, timetables (e.g., “R&D to complete prototype by Q2 2025”).
• Control mechanisms – Regular performance reviews, variance analysis and corrective actions.

12. Impact of Changing Objectives on Business Decisions

• Resource re‑allocation (budget, staff, equipment)
• Strategic realignment (e.g., shifting from cost leadership to differentiation)
• Risk assessment (new markets, new products, regulatory compliance)
• Stakeholder communication (shareholders, employees, customers, community)
• Adjustment of KPIs and performance‑measurement systems

13. Illustrative Examples

Example 1 – Private‑sector manufacturer (XYZ Ltd.)

Original 2022 objectives

• Increase domestic market share by 5 % within 12 months.
• Launch two energy‑efficient product lines by 2024.
• Achieve carbon‑neutral operations by 2030.

Mid‑2023 changes (raw‑material cost surge & new EU environmental rules)

1. Short‑term: Reduce production costs by 3 % through process optimisation.
2. Medium‑term: Accelerate the energy‑efficient product launch to 2023 to meet regulatory deadlines.
3. Long‑term: Move carbon‑neutral target forward to 2028 with a phased investment plan.

Resulting decisions: investment in automation, renegotiated supplier contracts, re‑allocation of marketing spend to the new product lines.

Example 2 – Public‑sector health service (NHS Trust)

Initial objectives (2021)

• Reduce patient waiting times for elective surgery to ≤ 18 weeks.
• Maintain a balanced budget while improving care quality.
• Achieve carbon‑reduction of 10 % by 2025.

After a 2022 funding cut and the “Net‑Zero NHS” policy

• Short‑term: Implement tele‑health pathways to cut outpatient costs by 5 %.
• Medium‑term: Prioritise high‑impact surgeries to keep waiting times ≤ 20 weeks.
• Long‑term: Reach carbon‑neutral operations by 2030, with an interim 20 % reduction by 2027.

Example 3 – Social‑enterprise (Eco‑Kids Clothing)

Original objectives (2020)

• Sell 50 000 garments per year while remaining financially self‑sufficient.
• Donate 5 % of profits to local school programmes.
• Use 100 % organic cotton by 2025.

Following a new Fair‑Trade certification requirement and rising demand for recycled fabrics

• Short‑term: Secure Fair‑Trade certification within 12 months.
• Medium‑term: Introduce a recycled‑fabric line, targeting 30 % of total sales by 2023.
• Long‑term: Achieve carbon‑neutral supply chain by 2028.

14. Key Points to Remember

• Objectives are dynamic; regular review (at least annually) is essential.
• Both external (PESTLE) and internal factors can trigger changes.
• Private, public and social enterprises have distinct primary objectives and drivers.
• CSR and the triple‑bottom‑line broaden objectives beyond pure profit.
• SMART criteria help ensure objectives are clear and achievable.
• Ethical considerations and stakeholder pressures often reshape objectives.
• Revised objectives directly influence strategic choices, resource allocation and operational planning.