The Importance of Objectives in Organizations

Many types of organizations use a standard approach to writing objectives. Their intent is to map out the businesses' goals. For example, many organizations write some version of SMART objectives, also called SMART goals, which are Specific, Measurable, Achievable, Results-focused and Timed. A small-business owner might write objectives in his first business plan, and then later adjust objectives to meet a changing strategy.

A small business needs a purpose, a reason for existence that its workers understand. The business plan targets the delivery of at least one product or service to a specific market. Over time, the company may stay with the first product or service or shift its focus to new products or services. Companies can set goals in many areas. For example, the Staples StickK to It! Business Challenge encouraged small businesses to set goals for organization and higher productivity, greening the office, bettering the work environment, optimizing the bottom line, and employee development and marketing.

A small-business owner with a staff should create working conditions that enhance worker performance. A March 2012 survey by the American Psychological Association and Harris Interactive showed that businesses were providing increasing opportunities for workers to "be involved in decision making, problem solving, and goal setting at work." At the business level, writing objectives is a process that requires an owner and employees to set organizational priorities. At the level of employees, writing objectives forces the business to outline more concretely how priorities will be met.

Writing objectives does not only help employees get involved in setting the direction for the company. Objectives also help employees feel motivated on an individual level. Some business owners approach managing employee performance from the standpoint of individual performance objectives. Each employee works with the owner or manager to write personal goals that fit the company's central objectives. The APA survey also found that -- from 2011 to 2012 -- there was a 6 percent increase in the employees who felt motivated to perform at their best for their organization. Employees need a reason to perform their specific tasks, not just a global sense of the company's direction.

Smart business owners budget their company's expenses. They expect some variation in recurring expenses, but overall they try to keep them stable from month to month. Writing business objectives encourages a business owner to predict what level of sales will be achieved in the next month -- such as week-by-week -- which is called forecasting. Then he can make spending decisions, such as how many hours to give each employee in the next work week, based on his weekly sales forecast and the percentage of the budget he typically sets aside for payroll.