After an organization has analyzed its external opportunities and threats as well as internal strengths and weaknesses and has defined its mission and vision, it can realistically establish objectives that will further its mission. The purpose of setting such objectives is to formalize statements about what the organization hopes to achieve in the medium-to long-range period (i.e., within the next three to five years).

Objectives provide more specific information regarding how the mission will be implemented. Objectives also provide a good basis for making decisions by keeping the desired outcomes in mind. Objectives provide the basis for performance measurement because they allow for a comparison of what needs to be achieved versus what each unit, group, and individual is achieving. Objectives can also be a source of motivation and provide employees with a more tangible target for which to strive.

With strong objectives, the entire organization has a clear sense of focus. All members know that there are clear objectives in terms of market presence, growth, sales, earnings, and financial performance.