Operational objective

Peter Drucker suggested that operational objectives should be SMART, which means specific, measurable, achievable, realistic, and time constrained. A specific objective should state the expected actions and outcomes. This would help to prevent the possibility of employees working for different goals. Secondly, a goal should be measurable and quantifiable so that people can know whether it has been met or not. For example, an objective might be increasing sales revenue by ten percent. This would prevent the confusions and conflicts on whether it has been met between different stakeholders. Thirdly, an objective should be achievable and feasible. It also should be agreed by stakeholders, especially by employees. If they think it is un-achievable, it might demotivate them. Fourthly, a plan should be realistic as well as challenging. It should be reasonable given their limited resources. It might be difficult to set operational objectives that are understood and accepted by all employees, as they might see different priorities and values. Therefore, it is important to let employees to participate in the determining of the objectives and to state them as clearly as possible. == Factors that affect operational objectives of an organization ==

According to Drucker P.F., objectives must be reviewed and changed constantly. By maintaining innovative, a business can obtain competitive advantages that makes it distinguish to its competitors. Lastly, government regulations and constraints can also affect objectives of a business, as they can limit what a business want to achieve. == Examples of operational objectives ==

Survival One of the most common operational objective for businesses is survival. Examples of SMART operational objectives that a business might have are: • For the human resource department - to maintain employee turnover rate below ten percent for next six months • For the sales department - to increase sales revenue by ten percent over the next six months • For the marketing department - to increase the market share by seven percent over the next one year and taking risk to stake holder == Importance of operational objectives ==

Motivation If an organisation has SMART operational objectives, employees can be inspired and motivated to work harder to meet common objectives, as they are measured. By achieving short term goals, employees might feel a great sense of accomplishment and this would help to improve their motivation. According to a research conducted by Rodgers, R. and Je Hunter, management by objectives (MBO) has been shown to increase productivity. Operational objectives also encourage managers to think strategically. Measure and control Operational objectives help to control and unify an organisation, as they are short-term goals, which are consistent with its aim. Operational objectives tend to be specific and measurable, so that they can help an organisation to achieve its long term goals. It can also help to improve budgeting. For example, the sales department might set an operational objective, which targets to raise sales revenue for the next several months. This encourages managers to predict what level of sales revenue will be in the future, and help them to budget better. ==References==