Goal intensity matrix

Goal intensity matrix
See also
EFE matrix Quality management principles Quality loss function Tactical management Strategic cost management Strategic position Benefits of strategic management Consumer orientation Hoshin kanri

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.

Examples of Goal intensity matrix

• Mission-oriented goals: The primary focus of mission-oriented goals is to define the purpose and scope of the organization. These goals often involve establishing a clear and purposeful direction that guides the organization’s operations and activities. For example, a mission-oriented goal of a nonprofit organization may be “to empower disadvantaged communities through education and health care.”
• Strategic goals: Strategic goals are objectives that are centered on achieving a competitive advantage through operational excellence. These goals are developed with a longer-term outlook, often incorporating more complex strategies and decisions. For example, a strategic goal of a business may be to “develop a new product line that will capture 50% of the market share within 3 years.”
• Tactical goals: Tactical goals are short-term objectives that focus on the implementation of strategies. These goals are typically developed from the strategic goals and are used to ensure that the organization is taking the necessary steps to reach the desired objectives. For example, a tactical goal of a business may be to “increase customer acquisition rate by 20% within 6 months.”

Limitations of Goal intensity matrix

The Goal Intensity Matrix is a useful tool for establishing long-term goals of a company, however, it has some limitations. These include:

• The Matrix only provides a general framework for goal setting and does not provide any specific guidance on how to achieve the goals.
• The Matrix does not provide any information on how to measure the success of the goals.
• The Matrix is based on the assumption that all goals are achievable and may not account for unexpected external factors that could influence the success of the goals.
• The Matrix does not provide any guidance on how to adjust goals if the environment changes and the original goals are no longer achievable.
• The Matrix does not provide any specific guidance on how to prioritize goals, making it difficult to focus resources on the most important goals.

Other approaches related to Goal intensity matrix

Introduction: Apart from the goal intensity matrix, there are other approaches that can be used to formulate the long-term goals of a company.

• The Balanced Scorecard Approach: This approach is based on the idea that long-term goals should be balanced across different aspects of the business, such as customers, operations, finances, and learning & growth. The approach allows managers to measure and track the progress of their goals in these four areas.
• The Value-Based Management Approach: This approach focuses on creating value for shareholders by setting long-term goals that are aligned with the company's strategy. For example, a company may set long-term goals to increase its market share by a certain amount, increase its customer base by a certain percentage, or launch a new product line.
• The Strategic Planning Approach: This approach focuses on setting long-term goals based on the company's overall objectives. For example, a company may set long-term goals to enter new markets, expand its product range, or increase its profitability by a certain amount.
• The Performance Management Approach: This approach focuses on setting long-term goals based on the company's performance metrics. For example, a company may set long-term goals to improve its customer satisfaction rating, increase its revenue by a certain percentage, or reduce its operating costs by a certain amount.

Summary: In conclusion, there are various approaches that can be used to formulate long-term goals for a company. These include the Balanced Scorecard approach, the Value-Based Management approach, the Strategic Planning approach, and the Performance Management approach. Each approach has its own merits and should be used in conjunction with other approaches to achieve the desired long-term goals.

References

• Hill, M. (1968). A goals-achievement matrix for evaluating alternative plans. Journal of the American Institute of Planners, 34(1), 19-29.