Objectives are essential to organizations. Organizations produce and market economic products and services, universities provide teaching and research, governments provide welfare and security and so on. Organizations are attainment instruments. Without some purpose, there is no need for the organization. All organizations are goal seeking, that is, they exist for the purpose of achieving some goals efficiently and effectively. Objectives affect the size, shape, and design of the organization, and they are important in motivating and directing personnel. Objectives serve the following functions:

  1. 1.                 Legitimacy 

Objectives describe the purpose of the organization so that people know what a stand is for and will accept its existence  and continuance. Thus, Ford ‘sells American Transportation’, Chrysler ‘sells know-how’ and Godrej ‘sells quality products’. Objectives help to legitimize the presence of organization in its environment . Now the organization can emphasize its uniqueness and identity.

  1. 2.                 Direction 

Objectives provide guidelines for organizational efforts. They keep attention focused on common purposes . Once objectives are formulated, they become the polar star by which the voyage is navigated. Every activity is directed  toward the objectives, every individual contributes to meet the goals. ‘Without seeing the target, a manager would be like a blindfolded  archer- expending useless effort and creating havoc .’

  1. 3.                 Co-ordination 

Objectives keep acttv1t1es on the right track. They make behavior in organizations more rational, more coordinated and thus more  effective’, because everyone knows the accepted goals to work toward . In setting effective goals managers help members at all levels of the organization to understand how they can ‘best achieve their own goals by directing their behavior toward the goals of the organization .’

  1. 4.                 Benchmarks for Success

Objectives serve as performance standards against which actual performance may be checked. They provide a benchmark for assessment. They help in the control of human effort  of human effort in an organization.

  1. 5.                 Motivation 

Goals are motivators. The setting of a goal that is both specific and challenging leads to an increase in performance because it makes it clear to the individual what he is supposed to do. He can compare how well he is doing now versus how well he has done in the past and in some  instances how well he is performing in comparison to others. According to Latham and Yuki goal specificity enables the workers to determine how to translate effort into successful performance by choosing an appropriate action plan. Suppose a publisher sets a goal of securing orders worth $ 5,000 in 6 months for a sales man and announces bonus for meeting this specification. This half yearly goal is a motivational tool that influences the salesman’s behavior. Having a definite figure to shoot for is much more likely to stimulate his effort than instructions to ‘sell as much as you can’.

Psychologists preach the significance of setting goals in our private lives as well. You set the goal of cleaning your scooter on a Sunday morning. Despite the drudgery, you feel a sense of accomplishment a fulfilling your objective.