Q&A - Outline the role of functional objectives

Functional objectives are set for each major business function and are designed to ensure that the corporate objectives are achieved.

A well-established business will divide its activities into several business functions.  These traditionally include areas such as:

• Finance & administration
• Marketing & sales
• Production & operations
• Human resource management

Whilst each of these functional areas requires specialist expertise, their activities are not carried out in isolation from the rest of the business. It is vital in your studies to consider the ways in which the functional activities are connected to each other. However, it is common for each functional area to be set its own objectives, which should be consistent with the higher-level corporate objectives.

Consider some example objectives for the marketing function. Examples of functional marketing objectives” might include:

• We aim to build customer database of at least 250,000 households within the next 12 months
• We aim to achieve a market share of 10%
• We aim to achieve 75% customer awareness of our brand in our target markets

In the hierarchy of business objectives, it is the corporate objectives which are the boss!  These are the objectives that the business as a whole is trying to achieve.

By contrast, functional objectives can be viewed as a willing servant of the corporate objectives! Their purpose in life is to help make possible the achievement of the corporate objectives.  As such, functional objectives need to be:

• Consistent with corporate objectives (i.e. not work against them)
• Suitably focused on the key functional activities

Here are some examples of how corporate and functional objectives might work well together:

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