Business

Study Notes

Relationships between functional objectives and strategies

Level:
AS, A Level
Board:
AQA, Edexcel, OCR, IB

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

In the hierarchy of 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:

Corporate Objective Example Functional Objective
Increase sales Successfully launch five new products in the next two years
Reduce costs Increase factory productivity by 10% by 2012
Increase cash flow Reduce the average time taken by customers to pay invoices from 75 to 60 days
Improve customer satisfaction Achieve a 90% level of repeat business across major markets

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