Objectives and purpose of organisations - Mission vision and...

Learning Outcomes

After reading this article, you will be able to explain why organisations exist and identify the distinction between mission, vision, values, and objectives. You will understand the difference between strategic and operational goals, be able to recognise how objectives form the basis for decision-making, and match examples to each level. This knowledge is essential for selecting the right approach in exam scenarios involving organisational purpose and planning.

ACCA Business and Technology (BT) Syllabus

For ACCA Business and Technology (BT), you are required to understand the fundamental objectives and direction of organisations. Ensure you revise:

• The purpose and objectives of commercial and not-for-profit organisations.
• The meaning and distinction between mission, vision, and values.
• The hierarchy of organisational goals: strategic, tactical, and operational.
• The difference between broad corporate aims and measurable objectives.
• The importance of aligning day-to-day actions with organisational mission.
• The role of objectives in guiding business departments and decision makers.

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. Match each item below to its correct definition:
   a) Mission
   b) Vision
   c) Objective
   Options:
   i) Long-term ambition or future state
   ii) Core reason for existence
   iii) Specific, measurable target

2. Which of the following is an example of an operational goal?
   1. “To become the market leader in five years”
   2. “Reduce delivery time for online orders to 24 hours this quarter”
   3. “Expand into three new countries by 2027”
   4. “Deliver value to customers through innovation”

3. True or False? Strategic objectives typically relate to the day-to-day activities of staff on the shop floor.

4. State one feature that distinguishes a mission statement from a vision statement.

Introduction

Every organisation is established for a purpose. That purpose may be financial profit, public service, or social impact. To guide decisions and behaviour, organisations set overarching statements and measurable objectives at different levels.

Key Term: mission
The broad statement explaining why an organisation exists and what it seeks to achieve at the highest level.

Key Term: vision
A statement describing the desired long-term future position or ultimate aspiration of an organisation.

Key Term: objective
A specific, measurable target set to be achieved within a defined timeframe.

Organisations use mission and vision statements to communicate direction. Strategic, tactical, and operational goals organise activities at different levels and time frames.

The purpose of organisations

Organisations exist to meet defined needs. Commercial organisations aim to generate profits for owners or shareholders, while not-for-profit bodies focus on delivering benefits to members or the wider community. Every organisation must clearly state its core purpose to direct planning and behaviour.

Mission and vision

Mission statement outlines the organisation’s reason for being. It answers: “Why do we exist?” A well-stated mission remains stable over time, providing continuity and identity.

Vision statement describes what the organisation wants to become. It is future-oriented and inspirational, expressing what success looks like in the long term.

Values are beliefs or principles that guide behaviour and decision-making—often featured alongside mission and vision.

The hierarchy of goals

Organisational aims are translated into a hierarchy of goals—each level building on the last:

1. Strategic goals:
   Broad, long-term aims set by senior management, focusing on overall direction and major achievements—typically looking three to five years ahead. Examples: Entering new markets, achieving market leadership, or launching major new product lines.

2. Tactical goals:
   Medium-term actions set by middle managers that support strategic goals. These usually cover departments, product lines, or business units—covering timeframes from several months up to a year.

3. Operational goals:
   Short-term, highly specific targets guiding daily activities and routine processes, usually set by supervisors or team leaders. These focus on immediate performance—such as daily targets, productivity quotas, or quality standards.

Characteristics of good objectives (SMART)

Objectives at every level should be:

• Specific: Clearly defined
• Measurable: Quantifiable or able to be assessed
• Achievable: Realistic and attainable
• Relevant: Linked to broader goals or mission
• Timely: Set with a deadline

Worked Example 1.1

A food delivery company’s board sets a mission “to provide convenient, nutritious meals to city residents.” The senior team defines a vision “to be the most trusted meal provider in the region by 2030.” Which of the following would be a strategic objective, and which is operational?

A) “Open 10 new outlets in two years”
B) “Achieve a 98% on-time delivery rate each week”

Answer:
A) Strategic objective—represents major growth over years.
B) Operational objective—guides daily delivery team performance.

Linking goals to departments

Each business function interprets the mission and vision according to its role:

• Marketing may set goals to expand brand awareness.
• Operations may focus on efficiency or quality targets.
• Finance aims to achieve revenue or cost objectives.

These departmental objectives are aligned to the overarching mission and strategic plan, ensuring unified action.

The importance of alignment

Alignment between mission, vision, and specific objectives ensures that all levels of the organisation work towards the same outcomes. This prevents conflict and confusion, especially as organisations grow in scale and complexity.

Worked Example 1.2

A hospital’s mission is “to deliver compassionate healthcare.” Its operations department sets an objective to “reduce patient waiting times to under 15 minutes by September.” Why is this operational goal important for achieving the hospital’s mission?

Answer:
Reducing waiting times improves the patient experience and care quality, helping fulfil the mission of compassionate service.

Exam Warning

Statements of purpose (mission, vision) and objectives are not the same and should not be used interchangeably in exam answers. Be precise about which level or statement you are describing—especially when presented with scenarios requiring matching objectives to management levels.

Day-to-day impact of objectives

Specific, measurable objectives shape employee activity at every layer. A clear link from mission and vision down to operational goals makes it easier to monitor performance, motivate staff, and adjust plans as needed.

Revising objectives

Objectives are reviewed periodically. Strategic goals may remain stable for years, while operational targets can be adjusted more frequently to reflect immediate needs or market changes.

Summary

Organisations need a clear purpose, captured in their mission and vision. Strategic, tactical, and operational goals convert overall direction into concrete action. Properly formulated objectives provide focus, help coordinate activity, and support long-term success.

Key Point Checklist

This article has covered the following key knowledge points:

• The difference between mission, vision, and values statements
• How objectives are structured at strategic, tactical, and operational levels
• The SMART criteria for setting objectives
• The importance of aligning individual and departmental goals with the mission
• Why effective objectives improve decision-making and organisational performance

Key Terms and Concepts

• mission
• vision
• objective