Goal intensity matrix

From CEOpedia | Management online
Jump to: navigation, search

Managers of the company after the diagnosis of the environment, formulating the mission, identifying strengths and weaknesses of the company must determine the long-term goals of the company. These objectives express the aspirations and goals of the managers, which may be expressed in a certain time horizon. The level of ambition of managers should be adequate to assess the strengths and weaknesses of the organization.

Most commonly there occurs a few common goals: increase profitability, gain market share. Problem of their mutual correlation should be considered. It is important to establish their reality, hierarchy and interaction. The objectives should be formulated in quantitative way. It is important to ensure internal consistency of goals. It is possible that some of the objectives are mutually exclusive, for example: high profit margin and market share. Managers must first eliminate goals that are mutually exclusive.

Application

The aim is to find the essential relationship between the strategic objectives and the identification of reactivity of individual objectives.

First, identify the key objectives for the company. You can use the heuristic method, for example: brainstorming. Choose 10 of the most important goals.

Sample list of goals:

  1. Maximization of profits.
  2. Optimize costs.
  3. Increase of sales.
  4. Expand market offerings.
  5. Integration of employees.
  6. Working with local community.
  7. Improving the incentive system.
  8. Reorganization of the company.
  9. Improved customer service.
  10. Efficient investment.

Then managers should perform an examination of the interaction between all the objectives by using graphs. Tables should be created with the objectives set during the study. Analyzing the influence of one goal to another managers should connect arrows stating positive or negative impact. This procedure shall be carried out for all goals. Then we get inter-dependencies of all objectives. At the next stage, we attempt to assess the strength of the interactions. You must decide which of the goals are strongly influenced by and which are under low influence of the other. Table of intensity should be filled with values from 0 to 3 (0 effect does not occur). Then count the sum of points in columns and rows.

Table 1. Table of intensity

Goal number 1 2 3 4 5 6 7 8 9 10 Sum of SI
1 X
2 X
3 X
4 X
5 X
6 X
7 X
8 X
9 X
10 X
Sum of SR X


Description:

  • SI - sum of intensity
  • SR - sum of the reactivity

Plotting of intensity maps

The final step is to plot intensity maps based on data in the table. These maps allow you to identify the proactive, reactive, and lazy goals.

On the x-axis we plot the intensity of specific objectives, and on the y-axis reactivity. We set the median value among all the specified intensity and reactivity and plot it on the chart. The median value specifies the "boundaries" between the types of targets.

  • Active objectives-are characterized by high intensity and low reactivity. Are in relation to other purposes. These are the goals used as tools, used in the process of change. They should be implemented first.
  • Critical objectives -have a high degree of intensity and reactivity, are used for identification purposes, but using them as tools is difficult due to having been heavily influenced by the active objectives..
  • Reactive objectives - are heavily influenced by other purposes, are used as a means of early-warning and control for active objectives.
  • Lazy objectives - do not have a strong impact, and are not strongly influenced by, these are the subordinate objectives.

Advantages of method

  • Allows you to declare the order of objectives,
  • Creates the conditions for discussions on the understanding of the importance of the previously formulated goals,
  • Can detect reciprocal links between objectives,
  • Identification of the purpose of a strategic nature and objectives more operational than strategic.

References