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Corporate objectives tend to focus on the desired performance and results of the business. It is important that corporate objectives cover a range of key areas where the business wants to achieve results rather than focusing on a single objective.

Peter Drucker suggested that corporate objectives should cover eight key areas:

Area Examples

Market standing Market share, customer satisfaction, product range

Innovation New products, better processes, using technology

Productivity Optimum use of resources, focus on core activities

Physical & financial resources Factories, business locations, finance, supplies

Profitability Level of profit, rates of return on investment

Management Management structure; promotion & development

Employees Organisational structure; employee relations

Public responsibility Compliance with laws; social and ethical behaviour

Corporations typically adopt a number of common business objectives. For instance, the firm may seek to achieve a rate of return that will equal or exceed the return required by its shareholders, lenders, or the combination of the two (cost of capital) by a given year. The firm may set a size objective, seeking to achieve some critical mass, defined in terms of sales volume, to realize economies of scale by a given year.

Several common objectives relate to growth. Accounting-related growth objectives include seeking to grow earnings per share (EPS), revenue, or assets at a specific rate of growth per year. Valuation-related growth objectives may be expressed in terms of the firm’s price-to-earnings ratio, book value, cash flow, or revenue. Diversification objectives are those where the firm desires to sell current products in new markets, new products in current markets, or new products in new markets. For example, the firm may set an objective to derive 25% of its revenue from new products by a given year. It is also common for firms to set flexibility objectives, aiming to possess production facilities and distribution capabilities that can be shifted rapidly to exploit new opportunities as they arise. For example, major automotive companies have increasingly standardized parts across car and truck platforms to reduce the time required to introduce new products, giving them greater flexibility to facilitate a shift in production from one region to another