Concept of organization
Organization relates to a group of people working together to achieve a
common goal.
Characteristics of organization
a) Association of people
b) Division of work
c) Perpetual existence
d) Leadership
e) Common goal
f) Structure
g) Environment specific: An organization operates within a specific
environment, whether it be a market, industry, or geographical location
h) Co-ordination
Concept of organizational goals
Goals are the expected outcomes of an organization. They clearly show
the managerial commitment towards performance achievement.
Importance of organizational goals
a) Encourages good planning: organizational goals provide a
roadmap for planning and decision-making. They help organizations
determine what actions to take in order to achieve their desired
outcomes.
b) Relationships must be defined: organizational goals help define
the relationships between various parts of the organization,
ensuring that everyone is working towards the same objectives.
c) Shows relevancy of vision: demonstrates organization’s overall
vision and mission
d) The base for decision making: prioritize their actions and
allocate resources accordingly
e) The base for management functions: functions like planning,
organizing, staffing, leading controlling
f) Gives future decisions: direction for future activities, stay focused
in long term objectives
g) To provide image and identity: sense of purpose and direction
for its members
h) Reveals priorities and sources of motivation: align the
actions with designed outcomes
Types of organizational goals
Basis of level Basis of time Basis of area/functions
Strategic: to achieve 50% Long-term: to achieve Financial: to maintain debt-to
reduction in carbon emission by carbon neutrality within 10 equity ratio of1:1 by the end of
2030 years the year
Tactical: to shift office operation Mid-term: to reduce overall Human resources: to recruit 50
in renewable energy sources by carbon emission by 50% qualified candidates for key
70% by 2027 within 5 years position within 3 months
Operational: install solar panels Short-term: to implement Marketing: to launch three new
in headquarters and branches by energy efficient practices to product-specific ad campaigns
Q4 2025 and track the reduce nonrenewable within the next year
percentage of energy consumed energy consumption by 15%
by renewable energy sources on within a year.
monthly basis
Production/operational: reduce
waste output by 20% within the
next year
Research and development: to
launch two new innovative
products at the end of the year
Features of effective organizational goals (SMART)
a) Specific
b) Measurable
c) Achievable
d) Realistic
e) Time bound
f) Flexible
g) Communicable
h) Aligned with individual and team goals to create cohesive strategy and minimize conflict
Process of goal formulation
1. Environmental scanning: internal and external environment, swot analysis, provides bug
picture of dynamic environment, detects ambiguous incomplete unconnected information
that requires detailed study
2. Formulation of the strategic goals: long term goals, vision, mission, depict future
demand
3. Formulation of the tactical plans: mid term goals, support strategic goals, more specific,
more focused and expressed quantitatively
4. Formulation of operational goals: lower level management, short term goals, support
tactical goals,
5. Evaluation and review of the goals: measure, tracked, ensure its direction towards
achievement, modified as per the dynamic environment
Approaches to goal formulation
1. Top down approach: The top-down approach to management is a strategy in which the
decision-making process occurs at the highest level and is then communicated to the rest of
the team. The top-down approach is highly hierarchical where senior executives make
decisions, craft goals, and create policies. The top-down approach can reduce risk, eliminate
confusion and also be less costly and faster to implement than other approaches.
2. Bottom up approach: A bottom-up approach is a collaborative style that involves
employees at all levels in the decision-making process. It is a participative approach.
Employees are more aligned with the company's culture, mission, and values. The approach
embraces innovation as it values the ideas and expertise of employees at all levels by
encouraging exchange of ideas.
3. Management by objectives approach: Management by objectives (MBO) is a systematic
approach to goal setting and performance review that helps align individual goals with an
organization's objectives. This approach involves managers and employees working together
to set specific goals and develop a plan to achieve them. The principle behind MBO is to
ensure that everyone in the organization has a clear understanding of the organization's aims
and their own roles and responsibilities in achieving them.
Problems of organizational goals
1. Reluctance to establish goals: lack of clarity. Inability to determine most efficient
strategy.
2. Improper reward system: reward system not aligned with the goals. Demotivation.
Disconnected from organizational goals.
3. Resistance to change: unwillingness to change as per the need of environmental
dynamisms.
4. Dynamic and complex environment: rapidly changing. Technological advancements.
5. Inappropriate goals: frustration in employes to goals that are hard to achieve
6. Lack of resources and improper utilization: Limited budget, Lack of skilled personnel,
Time constraints, Equipment and tool shortages
7. Poor communication: Legal disputes Conflict Stress Poor customer service
Misunderstandings
8. Poor planning: Poor planning in management often leads to unclear objectives and
inefficient allocation of resources, resulting in wasted time and effort. This lack of foresight
can create confusion among team members, impact morale, and diminish productivity.
Ultimately, it undermines the organization's ability to adapt to changing circumstances
and achieve its goals effectively.
Goal succession
Goal succession is the process of intentionally reviewing and modifying existing goals to
incorporate new or modified goals. The new goals should be in coordination with the existing
goals and not change their spirit. For example, if an organization's goal is to train
candidates, the next goal would be to place the trained candidates.
Forms of goal succession
1. Add the new objectives to the existing objective
2. Replace the old goals with new goals
3. Expand the scope of existing goals
Reasons for goals succession
Achievement of the original goals
Failure to meet the original goals
Environmental change
Organizational shift in priority
Concept of goal displacement
Goal displacement is a phenomenon where an organization's original goals are replaced by
other goals that are more practical or in line with the interests of the organization's leaders.
Goal displacement occurs when an organization or group shifts its focus from its original
objectives to new goals that may not align with its initial purpose. This can result in
inefficiencies and a loss of effectiveness in achieving the primary mission.
Reasons for goal displacement
1. Unachievable goals
2. Employees lack confidence and attitude
3. Difficulties with bureaucracy and tough rules
4. Unable to attain objectives
5. Subordination of organizational goals: prioritizing individual goals over organizational
goals
6. Formulation of two (vague) sets of goals: unclear goals and lack of clarity on prority
Changing perspective of organizations
1. Changing structure
2. Changing culture and values
3. Employee participation and team work
4. Orientation in learning
5. Workforce diversification
6. Respond to consumer mindset
7. Change in national boundaries
8. Change in technology
9. Level of knowledge
10. Social responsibility in business