UNIT 3 ORGANIZATIONAL GOALS, VISION AND MISSION

Structure

3.1 Introduction
3.2 Objectives
3.3 Organization: Its Nature and Core Values
3.4 Vision and Mission in Organization
3.5 Organizational Goals and Objectives
3.6 Goal-setting Approaches
3.7 Values and Benefits of Goal Setting
3.8 Summing Up
3.9 Glossary
3.10 Answers to check your progress exercises
3.11 References
3.12 Questions for reflection and practice

3.1 INTRODUCTION

As discussed in the previous units, organizations are an integral part of the society and have
occupied a place of significance. In the form of an institution, organization has been making
useful contribution, the chief of it being, channelizing the activities of individuals in the
organization towards a set of pre-established objectives or goals. While the concept of
organization, its structure, processes, policies and practices have been clarified to you in the
previous units, this unit introduces you to the concept of organizational goals, vision and
mission of organization and brings out the significance of these terms in achieving the
objectives of organization.
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3.2 OBJECTIVES

After studying this Unit, you would be able to

 explain Organization nature and its core values;

 explain vision and mission of organization;
 give details of organizational goals and objectives; and
 examine the goal-setting approached of organization.

3.3 ORGANISATION: ITS NATURE AND CORE VALUES

Though the concept of organization, its principles and practices have been well debated and
discussed, an attempt has been made over here to restate the same, in order to know the
importance of the term ‘goals’ in meeting the purpose of the organizations. Almost all the
definitions of organization just reinstate one fact that the goal of organization is to achieve
the established purposes. Fadia states that an organization is said to have formed, when
certain goals have to be achieved and people come together for that purpose. Basically
organization involves some division of work within different people or groups, and such
groups focus on various activities that are then collaborated together to achieve
organizational goals as a whole.

Nature of Organization

There are certain key concepts that are related to the nature of the organizations, which are as
follows:

 Social systems: Organizations are social systems. Just like employees working in the
organization or people in outer world have psychological needs they also have social
roles and status. Their behavior is influenced by the group they are working with as
well as by their individual drives.
 Mutual or Common Interest: Interest is common or mutual between the organization
and its employees. Organization needs employees to reach its objectives and
employees need organizations to help them reach individual objectives. Mutual
 interest provides a super-ordinate goal that can be attained only through the integrated
efforts of individuals and the employees as a whole.
 Ethics: Ethics is the use of moral principles and values to affect the behaviour of
individuals and organizations with regard to choices between what is right and wrong.
In order to ensure a higher standard of ethical performance by managers and
employees organization need to have codes of ethics, written statements of ethical
values and procedures to handle misconduct.

The nature of organization, thus stated, makes it clear, that in achieving the goals of the
organization, the organization do not resort to any kind of measures. The measures in
achieving the results are channelized in such a way, that certain core components of
organization such as being in a system; working towards mutual benefits; or following the
established ethics or procedures, are strictly followed, without getting deviated by unfair
means. Such nature of organization has been highlighted here, so as to understand the fact
that in setting the organizational goals, mission and vision, the key components that guide
such formulation is the nature of organization and the core values adopted by the
organization.

Core Values of Organization

Before getting into the organizational goals, vision and mission, it is important to have an
understanding of the core values of an organization that serves as a foundation to the
organization. Core values are the central principles or standards, set by an individual or an
organization, from which the individual or an organization, do not deviate, as such values
decide the very nature of the organization. Core values, thus form the basis for the very
existence of the organization, and they are extremely stable and change only very slowly
over long periods of time. Values thus formulated, establish the beliefs, which again
contribute to forming attitudes, which thereby guide the way of the organization.

Thus, core values of an organization, occupies the central place in an organization, and it
becomes important to think about the core values first, which serves as the base in
establishing sound and meaningful mission, vision and goals for the organization. Once the
core values of an organization is identified, it becomes important, to rank them in order of
priority. Such ranking will help in determining whether the goals fixed for the organization
are in the right track or not. For instance, let’s assume that the core values of an organization
are efficiency, safety and respect for other, in order of priority. And imagine that a question
comes up about implementing a practice that will improve the operational efficiency of the
organization, but may compromise the health and safety of employees. In such a case, if the
core values of the organization are well identified and ranked as per priority, it would be easy
for the managers to decide, whether to go for efficiency or safety. It can be understood that if
a manager has sound knowledge on the organizational values, it will give him/her the
guidance or direction in setting the right goals for the organization. Thus, defining the core
values of an organization is the first step, towards framing sound mission and vision.

Check Your Progress Exercise 1

Note: i. Use this space given below to answer the question.

ii. Compare your answer with the one given at the end of this unit.

1. Explain few concepts related to nature of organization.

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3.4 VISION AND MISSION IN ORGANISATION

Formulating the vision and mission of an organization is not an easy task. Like the core
values of the organization, vision and mission of the organization are also core statements
that decide the course of action of the organization. Mission and Vision are the standard or
benchmark in determining the organizational purposes and are critical elements of
organizational strategy. Most business firm establish their organizational mission statements
and vision statements, which serve as foundational guides in ascertaining the objectives of
the business as a whole. Thus, based on the vision and mission identified and established, an
organization develops the strategic and tactical plans for objectives.
Vision and Vision Statement

While mission is a statement of what an organization is, a vision is a statement of what or

how the organization wants to achieve. It is a future oriented, detailed description of
outcomes that an organization wants to accomplish. Ideally it is what the organization wants
to reach, or make it happen as a result of sustained efforts. Organization needs to be specific
as possible while working on a vision statement as in terms of who is involved, how – what
are they getting from and giving to the organization.

Vision statements are sometimes confused or used synonymously with mission statements.
However, vision statements should offer more of a direction and include a perspective of
corporate values. A vision might provide a direction for the organization for the next 5 to 10
years, with a commitment to integrity, transparency, openness and other such values. It
should inspire employees and given them a sense of purpose.

Organizational Mission and Mission Statement

Mission of an organization, should be a statement of why the organization exists and what it
wants to achieve. Mission Statement of the organization should establish the purpose of the
organization as a whole. Mission statements, in general are single line quotes, which are
easily repeatable and sounds inspiring to members of the organization.

Organizational mission statement is essentially its statement of purpose. It serves as a guide

for all the decision-making process within the organization. Such statement should be simple
and concise enough and help employees within the organization know what decisions and
tasks best align with the mission of the organization. A mission statement offers insight into
what an organization’s leader, view as the primary purpose for being. Some have profit-
motivated missions, while others make customers a focal point. There are still others who use
a mission to point out more selfless intentions that ultimately lead to profits. Precisely, well-
written mission statements are excellent tools to inform others about what is important to an
organization and how it operates the business.

Organizational mission cannot have values or beliefs outside their staff or outside people that
are involved with organization. Hence it becomes the duty of the manager or leader, to carry
it forward to the people that they deal with. This becomes possible, if the leader of the
organization makes the mission statement of the organization, as his/her individual mission
statement and follows it as his/her own. So it is important that each individual write their
own mission statement first, then that of the group and then of the organization as a whole.
This is because; an organizational mission statement reflects the core values and the beliefs
of the individuals who lead the organization.

Relationship between Mission and Organizational Strategy

The relation between mission and organizational strategy is very critical, as without
formulating a proper strategy, the mission of the organization cannot be achieved. Strategic
planning thus helps in developing the objectives, strategies and tactics, to achieve the mission
o the organization. Using the mission statement, the organization prepares the short term and
long term objectives. For instance, such objectives may include market-share targets, revenue
or profit goals, customer satisfaction scores, improved brand awareness, etc. Once
establishing the objectives, strategies are developed to achieve the objectives. For example,
better training and monitoring of feedback scores are strategies to achieve higher customer
satisfaction. Actionable steps or tactics are then developed. Hiring an outside training
consultant for a series of service training sessions is a tactic tied to the customer satisfaction
goal and the training strategy. Thus mission statements of the organization has a close link
with the organizational strategies and without strategic planning, the mission of the
organization cannot be accomplished.

Developing organizational visions and missions that are truly shared takes time, effort,
energy and commitment. One can’t expect that once the mission and vision statements are
developed and circulated among the employees, everyone will immediately accept and work
towards achieving them. A leader needs to be patient and committed to them first, and then
discuss them with the other employees, so that the vision and mission of the organization are
strategically achieved.

3.5 ORGANISATIONAL GOAL AND OBJECTIVES

As stated earlier, the concept of ‘goal’ gets reflected in the definitions of organization,
wherein it has been repeatedly reinstated that the purpose of organization is to achieve the
purpose or goals of the organization. Goals and objectives are a critical component of an
organization. Goals and objectives formulated for an organization are helpful to achieve the
mission, make the vision a reality and navigate the course so set for the organization. Goals
are the big steps towards accomplishing the mission/vision and they should be aligned with
the principles and values of organization. Goals, when accomplished, should bring
organization closer to its vision. On the other hand, organizational objectives are those
smaller steps that the organization takes to accomplish the goals.

Further, goal can be defined as a specific desired accomplishment over a defined period of
time. An organizational decision to be the best may be admirable, but it is not a goal. It is a
desire, a wish, or a dream visualized by the organization. To make any desirable idea into a
goal, organization must subject it to five criteria, popularly known as SMART, viz.:

 Specific
 Measurable
 Attainable
 Relevant
 Time-trackable

SMART, has been regarded as a method of goal-setting, that was made popular by super
salesman Zig Ziglar and this is the most commonly used method to realize either the
individual goals or organizational goals. This method serves as an effective instrument in
formulating well-established organizational goals.

Sometimes goals and objectives of an organization are confused with each other and are
interchangeably used. However, there are considerable differences between both the terms.
Goals are the outcome statements that define what an organization is trying to accomplish,
both programmatically and organizationally. Goals are usually a collection of related
programmes, a reflection of major actions of the organization, and provide rallying points for
managers. On the other hand, objectives are very precise, time-based, measurable actions that
support the completion of a goal. Objectives are directly related to the goal and are expressed
in clear, concise and understandable form.
An organization, in order to be effective, has to state their goals and objectives in written
form. If they are not in written form, they are just like any other ideas with no real powers. It
has to be understood that only written goals and objectives provide motivational power
among employees or whosoever is concerned to achieve them. Clearly and specifically
written goals prevent confusions and misunderstandings. Further, a well-written goals and
objectives, facilitates easy assessment of the organizational performance, as the results can be
measured in comparison with the time frame in accomplishing the goals.

3.6 GOAL-SETTING APPROACH

Goal-Setting approach is the oldest and most widely used approach which helps in defining
and measuring effectiveness. It assumes that organizations exist to accomplish goals which
reflect purpose, rationality and achievement. Many management practices like Management
by Objectives (MBO) are based on the goal approach. However, there are shortcomings to
the goal approach, which are as follows:

 Intangible outcomes may be difficult to measure.

 Goal-conflict frequently occurs as organizations strive to achieve many goals
 Goal-achievement does not guarantee organizational effectiveness.

While choosing the goals and objectives emphasis should also be given to the type of
approaches to be used – either top down or bottom up or the interactive one. Management by
objectives (MBO) is a common example of top-down approach. This approach focuses on
coordinating goal setting, incentives, and feedback. Here the top most level (CEO or the
managers) establish the organizational mission and then determine strategic goals. The
strategic goals determine the tactical goals and objectives as they are passed down to the next
level of management. The tactical goals in each department speak the operational goals and
objectives to individual employees. Then on the lowest level, the supervisor and employee
agree upon performance objectives, as well as how goal attainment will be measured. This
will help the superior to know employees concern and the caliber towards achieving the set
goals. When the next evaluation occurs, the supervisor and subordinate meet to assess to
what extent performance objectives have been met.
Top-Down Approach to Goal-Setting

The top-down approach has several advantages. It guarantees that the goals and objectives of
the organization are directly tied to and support the mission statement. It helps in breaking
down the goals so set by the top level to the lower level in the organization; thus, ambitious
goals will be set for everyone in the organization. However, the top-down approach has
several disadvantages. Upper-level management employees are unaware of the day-to-day
activities that the goals may be overly ambitious and unrealistic. Goals set at the top of the
organization takes time to percolate down to the lower level. Lastly, the top-down approach
does not always involve employee participation in the goal-setting process. Thus, employees
may not have a sense of ownership.

Bottom-Up Approach to Goal-Setting

The bottom-up approach works at the lower levels of the organization. Personnel at the
lowest or at the bottom level set the goals and objectives for the employees directly above
them. Here, operational goals and objectives determine the tactical objectives, which in turn
determine the strategic goals and objectives. Finally, the organizational mission is defined
according to the guidelines set by the employees. Goals determined by bottom-up goal
setting are likely to be more realistic than those set at the top of the organization. They are
more flexible, realistic and reflect the current situation of the organization. Finally, goals
created by all levels of the organization, and by all types of employees, are more likely to
encourage employee commitment. There are disadvantages to bottom-up goal setting. Goals
and objectives formulated by bottom-up goal setting are not always in line with the
organization’s mission. Sometimes it goes out of track with that of organizational objectives.
Often, organizations that use a bottom-up approach lack clear direction and focus. Lack of
hierarchy is seen in this type of approaches. Here the goals so set or created by the lower
level employees are not always challenging and ambitious.

Interactive Approach to Goal-Setting

Another approach in goal setting is interactive. It is a process by which employees at

different levels of the organization participate together in forming the goals and objectives.
Here, senior level or the top management employees start developing a mission statement.
Managers at different levels and departments of the organization then come together,
contribute their expertise and then determine the strategic goals. Further, then these are then
discussed with lower-level managers and supervisors and lastly, employees at the individual
level contributes their inputs by defining their own personal goals and objectives.

Interactive goal setting involves discussion and cooperation among management and
employees in the overall working within the organization. Here, the goals are more realistic
and current than the top-down approach. Because it involves cooperation/collaboration and
team work at all levels, employees feel valued and important. Their commitment to the
organization, as well as the goals, is increased. Input from upper management helps to ensure
that the goals are challenging and ambitious, which in turn increase motivation? On the other
side, this approach is time consuming because of involving all the employees at all the levels
to know there inputs. It is also difficult to manage and maintain. To get the most out of this
approach, active involvement from the manager’s end is quite important.

3.7 VALUES AND BENEFITS OF GOAL SETTING

Goal setting and goal achievement have tremendous organizational value. Goal setting is a
simple concept that can change fundamentally the way in which organizations do their work.
It works in all types of organizations, viz. private, public, profit-oriented, non-profit, etc. and
a well-planned goal often make the difference between success and failure. Goals give
direction to the collective effort of all the parts of an organization and they provide truly
motivational accountability to all the staff engaged within the organization.

Goal setting is also beneficial in a number of ways and they serve as a measure of success.
They help the organization or individuals to know how they are doing. They are also a way to
measure the performance and correct the deviations, if any. If the organization is getting off
track at any time along the way, pointing to the goals is a way to get it to adjust and get back
on track. Some organizations check their performance on regular basis so that they can figure
out where things are going wrong. Thus, measuring a goal acts as an effective instrument in
improving the performance of the organization and it is also used as an instrument, to assess
the performance of the employees on a weekly basis.
Further, at times when the leader or the followers in the organization are held up with critical
issues, which need immediate decision, the goals can offer the guidance in taking the right
decision. Apart from that, goals also provide motivation to the employees and stimulate their
performance, as the employees get the satisfaction, when the goals are accomplished.

According to Barney and Griffin, organizational goals serve four basic functions:

 Provide guidance and direction;

 Facilitate planning;
 Motivate and inspire employees; and
 Help organizations evaluate and control performance.

According to Locke and Latham, goals affect individual performance through four
mechanisms:

 Firstly, goals direct action and effort toward goal-related activities and away from
unrelated activities;
 Secondly, goals energize employees and challenging goals lead to higher employee
effort than easy goals;
 Thirdly, goals affect persistence, that is, employees exert more effort to achieve high
goals; and
 Finally, goals motivate employees to use their existing knowledge to attain a goal or
to acquire the knowledge needed to do so.

Thus, goal setting offers tremendous benefits to individuals and their organizations.

On the whole, the goal-setting model indicates that individuals have needs and values that
influence what they desire. A need is defined as a lack of something desirable or useful.
According to Maslow's hierarchy of needs, all individuals possess the same basic needs.
Individuals do, however, differ in their values. Values are defined as a group of attitudes
about a concept that contains a moral quality of like or dislike and acceptable or
unacceptable. Values determine whether a particular outcome is rewarding. Employees
compare current conditions to desired conditions in order to determine if they are satisfied
and fulfilled. If an employee finds that he or she is not satisfied with the current situation,
goal setting becomes a way of achieving what he or she wants.

Check Your Progress Exercise 2

Note: i. Use this space given below to answer the question.

ii. Compare your answer with the one given at the end of this unit.

1. What is the relationship between mission and organizational strategy?

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3.8 SUMMING UP
Organizations are discussed in this unit, is an association of two or more individuals, who are
intentionally organized to achieve the common goals or set of goals of an organization. In
thus formulating the organizational goals and objectives, the organization is guided by the
very nature of its existence and the core values adopted by the organization. Core values of
the organization, in turn, offer valuable guidance and direction in formulating the vision and
mission of the organization. While vision is the desire formulated by the organization, on
what it wants to be in the future, mission statements are the organization’s driving force of
want it wants to achieve. Both vision and mission of the organization contribute in
formulating effective goals and objectives. Generally SMART method is regarded as an
effective instrument of goal formulation. Thus, in setting the goals of an organization,
various approaches viz. Top-down, Bottom-up and interactive approach, offer valuable
insights. Thus, on the whole, vision, mission and goals of an organization are effective
mechanisms in determining the success of the organization.

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3.9 GLOSSARY
SMART : SMART is a mnemonic acronym, giving criteria to guide in the setting of objectives,
for example in project management, employee performance management and personal
development. The letters S and M usually mean specific and measurable. The other letters have
meant different things to different authors, as described below.
SMART criteria are commonly attributed to Peter Drucker's management by
objectives concept. The first known use of the term occurs in the November 1981 issue of
Management Review by George T. Doran. The principal advantage of SMART objectives is that
they are easier to understand, do, and be confident that they have been done.
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3.10 ANSWERS TO CHECK YOUR PROGRESS EXERCISE
Check Your Progress Exercise 1

1. There are certain key concepts that are related to the nature of the organizations, which are
as follows:

 Social systems: Organizations are social systems. Just like employees working in the
organization or people in outer world have psychological needs they also have social
roles and status. Their behavior is influenced by the group they are working with as well
as by their individual drives.
 Mutual or Common Interest: Interest is common or mutual between the organization and
its employees. Organization needs employees to reach its objectives and employees need
organizations to help them reach individual objectives. Mutual interest provides a super-
ordinate goal that can be attained only through the integrated efforts of individuals and
the employees as a whole.
 Ethics: Ethics is the use of moral principles and values to affect the behaviour of
individuals and organizations with regard to choices between what is right and wrong. In
order to ensure a higher standard of ethical performance by managers and employees
organization need to have codes of ethics, written statements of ethical values and
procedures to handle misconduct.

Check Your Progress Exercise 2

1. The relation between mission and organizational strategy is very critical, as without
formulating a proper strategy, the mission of the organization cannot be achieved.
 Strategic planning thus helps in developing the objectives, strategies and tactics, to
achieve the mission o the organization. Using the mission statement, the organization
prepares the short term and long term objectives. For instance, such objectives may
include market-share targets, revenue or profit goals, customer satisfaction scores,
improved brand awareness, etc. Once establishing the objectives, strategies are developed
to achieve the objectives. For example, better training and monitoring of feedback scores
are strategies to achieve higher customer satisfaction. Actionable steps or tactics are then
developed. Hiring an outside training consultant for a series of service training sessions is
a tactic tied to the customer satisfaction goal and the training strategy. Thus mission
statements of the organization has a close link with the organizational strategies and
without strategic planning, the mission of the organization cannot be accomplished.
Developing organizational visions and missions that are truly shared takes time, effort,
energy and commitment. One can’t expect that once the mission and vision statements
are developed and circulated among the employees, everyone will immediately accept
and work towards achieving them. A leader needs to be patient and committed to them
first, and then discuss them with the other employees, so that the vision and mission of
the organization are strategically achieved.

REFERENCES AND FURTHER READINGS

Barney, J. B., & Griffin, R. W. (1992). The Management of Organizations. Boston:

Houghton Mifflin.

Child, J. (2005). Organization: Contemporary Principles and Practice. Oxford: Blackwell

Publishing.

Fadia, B., & Fadia, K. (2006). Public Administration: Administrative Theories and Concepts.
Agra: Sahitya Bhawan Publications.

Fried, Y., & Slowik, L. H. (2004). Enriching Goal-Setting Theory with Time: An Integrated
Approach. Academy of Management Review , 29 (3), 404-422.

Hall, R. H. (1972). Organizations: Structure and Process. New York: Prentice-Hall.

Hicks, H. G., & Gullet, R. C. (1975). Organizations: Theory and Behavior. McGraw-Hill:
Michigan.

Locke, E. A., & Latham, G. P. (2002). Building a Practically Useful Theory of Goal Setting
and Task Motivation: A 35 Year Odyssey. American Psychologist , 57 (9), 705-717.

Robbins, S. P., Judge, T. A., & Sanghi, S. (2007). Organizational Behavior. New Delhi:
Pearson Education.

Simon, H. A. (1964). On the Concept of Organisational Goal. Administrative Science

Quarterly , 9 (1), 1-22.

[Link]

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QUESTIONS FOR REFLECTION AND PRACTICE
1. Write an essay on goal setting approaches of an organization.
2. Explain the following
Top down approach, Bottom Up approach and Interactive approach