the need for communication of objectives and their likely impact on the workforce

1.4 Business Objectives – Communication and Workforce Impact

1. Introduction

Business objectives give an organisation direction, set performance standards and provide the basis for decision‑making. When objectives are communicated clearly, every employee can see how his or her daily work contributes to the overall purpose of the business.

2. Types of Objectives in Different Organisations

Objectives differ because the underlying purpose of the organisation differs. The table below shows the typical primary objective(s) for three common types of enterprise and explains why those objectives are chosen.

CSR & the Triple‑Bottom‑Line

• Economic: e.g. “Achieve a 5 % increase in revenue while keeping operating costs below 60 % of sales.”
• Social: e.g. “Provide 200 apprenticeship places for local youth by 2025.”
• Environmental: e.g. “Divert 80 % of waste from landfill by the end of 2024.”

When CSR is embedded, each dimension is expressed as a SMART target, ensuring that the objectives are measurable and time‑bound.

3. Hierarchy of Strategic Planning

Each level feeds the next:

• Mission: The organisation’s fundamental purpose (the “why”).
• Aims: Broad, long‑term outcomes derived from the mission.
• Objectives: Specific, measurable statements that translate aims into action.
• Strategy: The overall approach chosen to achieve the objectives (e.g., market penetration, product differentiation, cost leadership).
• Tactics: Concrete, short‑term actions that implement the strategy (e.g., launch a social‑media campaign, renegotiate supplier contracts).

4. SMART Objectives

Cambridge recommends that all objectives satisfy the SMART criteria:

• Specific: Clear and unambiguous.
• Measurable: Quantifiable or assessable.
• Achievable: Realistic given resources and constraints.
• Relevant: Directly linked to the organisation’s aims and mission.
• Time‑bound: Includes a deadline or review date.

5. Objectives in the Decision‑Making Process

Objectives act as criteria at every stage of decision‑making:

1. Identify the problem or opportunity. Objectives define what the organisation wants to achieve.
2. Generate alternatives. Each alternative is judged against the set objectives.
3. Evaluate alternatives. Use objective‑based criteria (cost, market share, environmental impact, etc.).
4. Choose the best alternative. The option that best meets the objectives is selected.
5. Implement and monitor. Progress is measured against the original objectives.

6. Translating Objectives → Targets → Budgets

Quantitative objectives are broken down into operational targets and then allocated to budget lines. Two contrasting examples illustrate the flexibility of the process.

• Revenue‑growth example
  • Objective: “Increase sales revenue by 10 % next year.”
  • Target: “Sell 5 000 additional units of product X.”
  • Budget: “Allocate £250 000 to the marketing campaign that supports the sales target.”
• Cost‑reduction example
  • Objective: “Reduce production‑line overheads by 8 % within 12 months.”
  • Target: “Cut energy consumption on Line 3 by 15 % and decrease overtime hours by 20 %.”
  • Budget: “Invest £45 000 in energy‑efficient machinery and allocate £10 000 for staff training on lean techniques.”

7. Stakeholder Impact of Objectives

8. Why Communicating Objectives Is Essential

• Creates a shared sense of purpose across the whole organisation.
• Ensures coordinated action and reduces duplicated effort.
• Provides a benchmark for performance measurement and appraisal.
• Minimises uncertainty, resistance to change and speculation.

9. Impact on the Workforce

1. Motivation & Engagement: Employees see how their role contributes to larger goals.
2. Improved Decision‑Making: Staff can align everyday choices with stated objectives.
3. Enhanced Accountability: Clear targets make performance assessment straightforward.
4. Job Satisfaction: Understanding the “why” behind tasks reduces ambiguity.

10. Methods of Communicating Objectives

11. Linking Communication to Motivation – VIE Theory

The Vroom‑Expectancy‑Instrumentality‑Valence (VIE) equation explains how clear objectives boost motivation:

Motivation = Expectancy × Instrumentality × Valence

• Expectancy: Employees understand how effort leads to performance because objectives are explicit.
• Instrumentality: Clear objectives show the link between performance and rewards (bonuses, promotions, recognition).
• Valence: When objectives align with personal values or career aspirations, the perceived reward value rises.

12. Potential Pitfalls of Poor Communication

• Misinterpretation of goals → wasted resources and missed targets.
• Decreased morale if staff feel excluded from strategic direction.
• Fragmented decision‑making when departments chase conflicting aims.
• Higher turnover due to a perceived lack of purpose or direction.

13. Practical Steps for Managers

1. Translate corporate objectives into department‑level targets and corresponding budget lines.
2. Use a mix of verbal (meetings, briefings) and written (intranet, dashboards) channels.
3. Invite two‑way feedback; clarify doubts promptly.
4. Link performance appraisals, incentives and training directly to the communicated objectives.
5. Review objectives regularly (e.g., quarterly) and communicate any changes transparently.

14. Suggested Diagram – Flow of Objective Communication