Management by Objectives
Objectives are fundamental to the operation of a business. An objective is a written statement of
results to be achieved, defining specific outcomes and establishing performance levels for the
business, its manager and its employees. Objectives must be set for both the short and long range.
They must be reasonable, attainable, measurable, detailed and time specific. They should be
commitments, not facts; directions, not fate. An objective must have a means and a plan of
An example of an objective might be "to increase my business from $24,000 to $36,000 in the next
12 months." Another might be "to prepare, have printed and distribute 1,000 flyers to shoppers in
the local mall, all within two months." Others might be "to hire and train a new sales clerk before
the end of the fiscal year" or "to telephone each account receivable at the end of each month and to
personally visit accounts that are more than six weeks delinquent."
Objectives should be written for every phase of a business, such as sales, service, bookkeeping,
advertising, employee relations and marketing. Note that objectives should be written and reviewed
Every well-developed business plan should detail how the following will be accomplished:
Deciding - Determining what must be done.
Planning and scheduling - Setting time tables.
Performing - Following through on decisions.
Controlling - Monitoring events as they occur.
Coordinating - Ensuring that each objective is in harmony and not at odds with the
Recording and documenting - Keeping accurate and complete records.
Analyzing and evaluating - Studying records.
Essential Management Practices
The following are practices that are essential for a successful business.
! Have a written business plan that sets the objectives you want to achieve in the next year and the
next five years.
! Analyze progress with hard numbers.
! Know your break-even poi