CORPORATE OBJECTIVES
 

 

 

 

 

 

 

 

 

 

 

 

It will be useful here to draw a distinction between corporate objectives and measurement objectives and goals at the level of an SBU. Corporate objec- tives define the company’s outlook for various stakeholders as a general con- cept, but the SBU’s objectives and goals are specific statements. For example, keeping the environment clean may be a corporate objective. Using this corpo- rate objective as a basis, in a particular time frame an SBU may define preven- tion of water pollution as one of its objectives. In other words, it is not necessary to repeat the company’s obligation to various stakeholders in defin- ing an SBU’s objectives as this is already covered in the corporate objectives. Objectives and goals should underline the areas that need to be covered during the time horizon of planning. Growth objectives and goals, with their implicit references to getting ahead, are accepted as normal goals in a capitalistic system. Thus, companies often aim at growth. Although measurements are usually stated in financial terms, growth is described with reference to the market. Constraint objectives and goals depend on the internal environment of the company and how it wishes to interact with the outside world.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

An orderly description of objectives may not always work out, and the three types of objectives and goals may overlap. It is important, however, that the final draft of objectives be based on investigation, analysis, and contemplation. Product/market objectives may be defined in terms of profitability, market share, or growth. Most businesses state their product/market purpose through a combination of these terms. Some companies, especially very small ones, may use just one of these terms to communicate product/market objectives. Usually, product/market objectives are stated at the SBU level. Profitability Profits in one form or another constitute a desirable goal for a product/market venture. As objectives, they may be expressed either in absolute monetary terms or as a percentage of capital employed or of total assets. At the corporate level, emphasis on profit in a statement of objectives is some- times avoided because it seems to convey a limited perspective of the corporate purpose. But at the product/market level, an objective stated in terms of prof-itability provides a measurable criterion with which management can evaluate 202 Developing Marketing Objectives and Goals Developing Marketing Objectives and Goals 201 performance. Because product/market objectives are an internal matter, the corporation is not constrained by any ethical questions in its emphasis on profits. An ardent user of the profitability objective is Georgia-Pacific Company. The company aims at achieving a return of 20 percent on stockholders’ equity. The orthodox view has been that, in an industry where product differentiation is not feasible, the goal of profitability is irrelevant. But Georgia-Pacific’s CEO, Marshall Hahn, insists on the profit goal, and the outcome has been very satisfactory. Georgia-Pacific’s overall performance has been twice as good as any other competitor in the industry.Similarly, Chrysler Corporation, before it was acquired by the German automaker, shunned market share in favor of profits. In 1993, for example, Chrysler earned more from the auto business than GM and Ford combined, or the nine Japanese automakers.