Objectives of the organization
|Objectives of the organization|
Objectives of the organization (business goals) are stated by management before any planning or decision making activities. Every organization is structured using all available resources in order to achieve objectives set by managers. They are an expression of associations and feedback with the environment. Objectives have a strong influence on the interaction with the environment. Environment affects the determination of the organization's objectives. Objectives should satisfy all the participants of the organization.
Role of managers in stating organizational goals and objectives
Managers determine the basic objectives of the organization (one single direction of the organization), promote proper planning, they are a source of motivation for the members of the organization, provide an effective mechanism for monitoring and evaluation (provide a basis for the formulation of standards).
The objectives of the organization results from managers needs. The role of the manager is to identify priorities and concretization of goals. Objectives must be: Specific, Measurable, Ambitious, Realistic, Timely (SMART)
Every organization strives to achieve multiple objectives simultaneously, which form the so-called: targets beam. Size of targets beam, its composition and structure are dependent on many factors, but mainly from the object and mission of the organization that it has to fulfil for the participants and the environment.
Basic business objectives
The most important goal for organizations is to maximize profit, which is the desired surplus value of goods and services sold over the cost of their manufacture. The amount of the surplus depends mainly on the number of sold goods and services, the prices obtained for them, and the level of labour productivity and production costs. Linked to this is another objective of the organization - efficiency ratio. Efficiency ratio is calculated as the ratio of the benefits achieved as a result of specific actions to their costs. Improving this ratio allows for a surplus of economic organization. Some of the resulting surplus is allocated in the organization development, social funds, bonuses, dividends and wage increases. In this area the most important management choices are made between the current and future needs, which determine the future actions of the organization.
In addition to the economic objectives of an organization, there are many production, marketing and social objectives. Objectives for production and marketing are formulated in terms of values and qualities, needed to achieve the desired sales volume of certain services and goods.
Social objectives determine the work conditions and labour relations within the organization. They provide the desired degree of satisfaction of psychosocial and socio-political needs of employees, and participation in the exercise of power in the organization. In this group we can distinguish the objectives of the organization impact on the region and its activity in areas of the socio-economic, municipal and environmental protection.
If an organization is to preserve the social and economic balance managers must bear in mind that the economic, production, marketing and social objectives should be implemented in parallel. If the balance resulting from external and internal conditions would be disrupted managers should determine hierarchy of objectives that will help to restore the balance.
Dependence of organization type and objectives of business
Nonprofit organizations have different structure of targets beam. Drawing its funds from public budgets, organizations are referred to as the budget organizations.They last and grow thanks to a constant game of resources, carried out with the administrators of these funds, convincing them of their social mission, the importance of actions taken, the fatal consequences that occur when you do not properly fulfil their social responsibilities.
Organizations seek primarily for survival and development, as evidenced by the countless cases of companies, which change its business operations, production profile, the form of action, and sometimes even the basic function for which they were created.
Only such an organization that knows how to discover and pursue its goals will be fit to meet its external functions and implement the public interest in a democratic state with market economy.
Types of objectives and goal setting activities
Goals on different levels of management
- Mission - The specific purpose of determining the role of organization
- Strategic goal - Set at the top level of management as part of the strategy of the organization (e.g. structural productivity)
- Tactical goal - Set on medium organizational level, the focus is on how to operationalize the activities necessary to achieve the strategic goals (e.g. threshold productivity)
- Operational goal/operational objective - Is determined at the lowest organizational level (e.g. standard productivity)
- Long-term goal - Includes the time horizon of more than 5 years
- Medium-term goal - This includes the time horizon of one to five years
- Short-term goal - Includes the time horizon of up to one year
Key areas of activity
- Market goals - Objectives related to the activity of the organization in the market, such as increased market share, entering new markets
- Effectiveness objectives - Objectives related to the economic sphere of the organization, such as an increase in profit, the rate of profit from equity
- Financial goals - Objectives relating to the creditworthiness, cash flows, liquidity of assets
- Welfare goals - The objectives regarding organization's employees welfare
- Prestigious and environmental goals - Objectives related to public relations and social responsibility
The degree of compliance between individual and group objectives
- Postulated objectives - Official declared objectives, the assumptions set out during creation of organization, public statements, reports
- Realistic goals - Operational objectives resulting from negotiations between stakeholders in the organization
Range on the relationship between objective and the business environment
- Safety goals - Meeting the needs of the environment and the expectations of the participants outside and inside organization
- Profit goal - The objective of generating profits at a satisfactory level
- Growth and development - Objective focused on future organization position and results.
- Carroll Jr, S. J., & Tosi, H. L. (1970). Goal characteristics and personality factors in a management-by-objectives program. Administrative Science Quarterly, 295-305.
- Chua, D. K. H., Kog, Y. C., & Loh, P. K. (1999). Critical success factors for different project objectives. Journal of construction engineering and management, 125(3), 142-150.
- Locke, E. A. (1980). Goal Setting (No. GS-4). MARYLAND UNIV COLLEGE PARK COLL OF BUSINESS AND MANAGEMENT.
Author: Jolanta Szewczyk