Question

How do long and short term objectives fit in with operational and investment plans?

Answer 1

Performance goals intended to be achieved over a period of five years or more. Long-term objectives usually include specific improvements, technology leadership, profitability, return on investment, employee relations and productivity.

Thus having long-term objective fits perfectly with any concept like operational and investment plans. Having long-term objective before investing anywhere and starting operational work of the organization is very much necessary, as it gives the management of the organization or rather to say a view of the big picture of their organization in the years to come.

For example a car manufacturing company invests in acquiring a tyre manufacturing company instead of manufacturing itself. This move or rather investment will help in long term operations and saving a lot of cost as they won’t have to set up a new tyre manufacturing plant.

Along with long term, short-term objectives fit perfectly with the concept of operational and investment plans. Short-term objective is a smaller, intermediate milestone to achieve when moving toward an important goal. Like setting short term objective for staff in order to assist them in moving gradually toward the company's long term objectives.

For example investing in training of employees to make them carry out the operational work more smoothly and efficiently.

Some of the other objectives may include:

• Where to invest like shares, bonds etc.
• Whether or not adopt new marketing plans as followed by competitors
• Community outreach objectives
• Investment in new product line
• Revenue goals

These are a few simple objectives which an organization can have both in terms of short run and long run.

Like having a minimum of $5million revenue a year and being a $50million worth company in long term to continue with their operations.