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Strategy formulation Objectives Presentation Transcript

Slide 1 - Objectives (Strategic Management)
Slide 2 - Objective Objectives are short-term, specific, measurable targets that must be achieved to accomplish organizational goals. They must be relevant, challenging and focused. Objectives are the desired end results of any activity. They should be set at each managerial level in the organization
Slide 3 - Types of objectives
Slide 4 - Types of objectives
Slide 5 - Setting objectives in Strategic Business Units and functional areas Each strategic business unit or functional area must establish its own objectives. The steps in this process are as follows: The objective setting process begins at the top of the organization with a statement of mission. Long range objectives are established to achieve the mission. Long range objectives lead to the setting of performance targets (short range objectives) for the overall organization Long and short range objectives are established for each SBU, major division, or operating unit in the organization* Long and short range objectives are established for the functional areas (marketing, finance, production) in each SBU, major division, or operating unit
Slide 6 - A- Long range objectives Specify the results that are desired in pursuing the organization’s purpose. They are specific, concrete and measurable. They can be categorized as follows: profitability; service to customers, clients, or other recipients; employee needs and well-being; and social responsibility. All organizations do not have objectives in all these areas. They must support and not be in conflict with the organization’s mission; be clear, concise, quantified, span all significant units, and dynamic.
Slide 7 - B- Short-range objectives They are performance targets, normally of less than one year’s duration, that are used by management toi achieve the organization’s long-range objectives. They should be derived from an in-depth evaluation of the organization’s long range objectives. Such a system ensures that all objectives are consistent with each other
Slide 8 - C- MIX of organizational objectives No one mix or combination of organizational objectives is applicable to all organizations. The nature and the type of objectives are dependent on the nature and type of organization. Ideally, objectives should: Match strengths to opportunities Minimize threats to the organization Eliminate weaknesses in the organization
Slide 9 - How managers establish good objectives? Organizations have multiple objectives that must be orchestrated to avoid conflicts. Setting company objectives is more complicated than making isolated choices in each category of objectives.
Slide 10 - Well-defined objectives have several characteristics: Expressed in writing Measurable Specific as to time Challenging but attainable
Slide 11 - Priority of objectives: It’s entirely possible for an organization to have multiple goals and objectives contributing to its mission. Managers must establish priorities if they want to allocate resources in a rational way
Slide 12 - Conflicts among objectives: The process of establishing objectives and setting priorities must not overlook the stakeholders interest. The form and weight to be given to conflicting objectives is a matter of managerial judgment. Management must consider the expectations of the diverse groups on whom the firm’s ultimate success depends.
Slide 13 - Measuring objectives: Objectives must be clear, achievable, and measurable to be effective. Effective managerial performance requires establishing objectives in every area that contributes to overall organizational performance.
Slide 14 - Profitability objectives: Includes the ratios of profits to sales, profits to total assets and profits to capital. Marketing objectives: Measures performance relative to products, markets, distribution, and customer service.
Slide 15 - Productivity objectives: Measured with ratios of output to input. Other factors being equal, the higher the ration, the more efficient is the use of inputs. Physical and financial objectives Reflect the firm’s capacity to acquire resources sufficient to achieve its objectives.
Slide 16 - Quality objectives: Quality derives from meeting or exceeding customer expectations on each dimension.
Slide 17 - Strategic management and organizational objectives Organizational objectives are the specific ends that an organization seeks to achieve. They symbolize the reasons for an organization’s existence. Any strategy should have a clear means-end relationship with organizational objectives.
Slide 18 - Organizational objectives will accomplish the following: Will be capable of being converted into specific actions Will provide directions Will establish long-run priorities for the organization Will facilitate management control
Slide 19 - They are necessary in any and all areas that may influence the performance long-run survival of the organization The important point si that management must translate the organizational mission into specific objectives that will support the realization of the mission Official objectives state the organization’s basic purpose in society as a supplier of goods and/or services. Operating objectives are specific ends toward which organizational resources are actually allocated
Slide 20 - The organization’s goals and objectives The mission is the reason for the existence of the firm. The organization’s goals are the desired general ends toward which efforts are directed. Objectives are specific, and often quantified, versions of goals.
Slide 21 - The role of the organization’s mission Without verifiability and specificity , objectives will not provide a clear direction for managerial decision making, nor permit an assessment of organizational performance
Slide 22 - THANK YOU
 

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