Corporate goals are the basis for all entrepreneurial activities and thus also for target agreements that are conducted with specialists and managers from the divisions. A company's annual targets are derived from various factors, such as the likely conditions in the market. In this article, you will find a definition and examples.
Corporate goals as a basis for target agreements
In business administration, corporate goals are defined as all objectives that form the basis of an entrepreneurial activity. This means that corporate goals are the basis for all entrepreneurial activities. A corporate goal is a desired state that is to be achieved through economic decisions. A company's annual targets depend on various factors, such as the likely conditions in the market.
Business goals perform various functions. For example, the corporate philosophy can also be seen as a goal: it defines the company's self-image and offers employees the opportunity to identify. The overall goals are broken down at different levels and determine the action goals at the individual level. The decisions that are made with specialists and managers are also derived from this.
Corporate goals as a basis for target agreements
Business goals apply to all areas of a company. They range from the general development of a company (e.g. sales targets) to personnel (e.g. qualification), marketing (e.g. expansion of market shares), development (e.g. new products) and organization (e.g. new IT system).
Managers have the task of translating these corporate goals into individual goals for their employees. They should therefore always know exactly what the company's current and future goals are. It is the manager's task to ensure that employees are also informed about these. The
management by Goal Setting ("management by objectives") can have a motivating effect on employees. All employees should know what they are working for, what they are being measured against and why it is worth showing full commitment to the company. This is the only way to increase employee motivation.
Quantitative vs. Qualitative Goals – A Definition
In general, a distinction is made between qualitative and quantitative targets. Quantitative targets are clearly measurable in numbers. Qualitative objectives must be
measurable. The examples show how this can be implemented for quantitative and qualitative targets.
Examples of Quantitative Targets:
Company Target Revenue
- 3% increase in revenue within the next fiscal year
Corporate Goal Budget
- The marketing budget of 1 million must be adhered to
Examples of Qualitative Objectives:
Company Goal: Increase Customer Satisfaction
- For example, this means that a sales rep has to visit the customer more often over the course of the fiscal year (e.g. 3x instead of 1x)
- For example, for a customer service employee, this means that they will be able to process customer inquiries faster in the future, instead of within 3 days, now within 1 day
Company goal: Increase brand awareness
- This means, for example, for a marketing employee to identify and manage social media channels relevant to the target group or to organize trade fair appearances at new events
Tip: In the case of qualitative goals, it is often helpful to consider what must no longer occur in order to achieve the goal in the long term.
Outcome Goals vs. Process Goals
Another way to differentiate between different types of business goals is to divide them into outcome and process goals. Earnings targets are directly related to the results a company is aiming for. These goals tend to be more long-term, and the company doesn't always have absolute control over whether they are achieved. Process goals can be shorter-term and are more in the hands of the entrepreneur's employees.
Examples of outcome targets:
Earnings target: Revenue
- "Sales are expected to increase by x percent in the next fiscal year"
Earnings target: Market share
- "By the end of the next financial year, the market share is to be increased to x%"
Examples of process objectives:
Process Objectives: Revenue
- "X number of offers should be sent out every week"
- "The sales force should visit x customers every month"
Process Objectives:
Market share
- "In the first quarter, a marketing campaign on the topic of XYZ is to be run"
- "The USPs of our product compared to the competition are to be worked out more clearly by the end of week 25"
Successful companies always pursue a mix of outcome and process goals. Earnings targets contribute to the company's long-term vision.
Process goals define the path to this outcome and help break it down into stages.
