Objectives Of An Organization And Can Be Structured Into A Hierarchy.

The corporate objectives affect the entire organization; divisional objectives are those derived from the corporate objectives, department are derived from the divisional objectives, and so forth, right down to the individual level.

Similarly, the can range from the short to the long term. Long-range objectives extend over five or more years. Short-range objectives are very specific and generally are realized within one year. Every business has more than one objective.

Although the choice and priorities will be different among firms, the objectives lists of most firms will contain to levels objectives: the overall (general) objectives and specific (minor)organization objectives.

The first level is concerned with the firm's broad goals:

  • economic service objectives
  • broadly stated company objective
  • survival and growth objectives
  • personal group objectives
  • government and social objectives

The second level - specific organization objectives relate to:

  • productivity objectives
  • budgetary objectives
  • quantitative objectives
  • qualitative objectives.

Every company needs to establish both strategic objectives and financial objectives.

Why do firms have objectives, and why are they important to strategic management? There are four reasons:

  1. Objectives help define the organization in its environment.
  2. Objectives help in coordinating decisions and decisions makers.
  3. Objectives provide standards for assessing organizational performance.
  4. Objectives are more tangible targets than mission statements.

Objectives may be short and long term. Although there is no precise definition of dividing point among the the classes of objectives, many would agree that one year or less refers to a short-term objective and five years or more refers to a long-term objectives. Both long-range and short-range objectives are needed.

Long-range objectives serve two purposes:

  1. One, they raise the issue of what actions to take now to able to reach the targeted long-range performance later.
  2. Two, having long-range objectives pushes managers to weigh the impact of today's decisions on longer- range performance.

Short-range objectives spell out the immediate and near-term results to be achieved:

  • They indicate the speed at which the organization needs to move along its charted path as well as the level of performance which being aimed for.
  • They represent a commitment by managers to produce specified results in a specified time frame - this means they must spell out how much by when.

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Establishing Organizational Direction: Mission And Objectives
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