Goals
After formulating the mission statement, the next step for the company is the establishment of major goals.
The goals designate specific results the businesses want to achieve. In this context, the purpose of goals is to specify, as accurately as possible, as to what is to be done, if the company is to attain its mission.
Goals are more specific than the mission but less specific than objectives. Objectives define and refine the goals further. Strategic goals help managers to establish end results of activities in general without getting bogged down in issues of measurement and timing.
Goals, in general, can be long term or short-term. Short term goals generally cover a period of about one year. Long term goals cover a time period beyond one year. Sometimes, there is a category of intermediate goals which cover a time period of between one and five years. Long term goals are usually related to such issues as customer satisfaction, improvements in product quality, worker efficiency and productivity, innovation and so on. These long term goals require management to do strategic planning in terms of long term profitability and in terms of long term investments in equipment, people, research and development and so on.
Goal Characteristics
According to M.D. Richards, meaningful goals should have four characteristics.
First, goals should be sufficiently specific so that they are precise and measurable. It would assist management in monitoring the progress towards achievement of these goals at each specific point in time.
The second characteristic is concerned with the issues that a goal addresses. A goal should only address important issues. Short-term goals and objectives should be left to the lower management to plan and achieve. Such important issues as reducing costs or improving quality should be included in goals,which are to be achieved by top or middle management. For example, Boeing’s goal of being a market leader in aircraft business by maintaining a minimum of 60 percent market share is an important issue that a goal addresses.
The third characteristic of well constructed goals is that they should be realistic and challenging. Challenging goals motivate managers to be innovative and ambitious about improving the operations. However, the goals have to be realistic and compatible with the resources available. An unrealistic goal would cause resentment among employees.
For example, Boeing Company decided to achieve a 30 percent unit cost reduction by improving efficiency of operations. However, the time period they projected in achieving this goal was 6 years. This goal was considered challenging and realistic. The goal would have been unrealistic and unachievable if they had projected the time period for such cost reduction much less than 6 years’
The fourth characteristic is the specification of time period in which a given goal is to be achieved. For example, when Boeing decided to cut the per unit cost by 30 percent, they put the time frame to be 6 years. Deadlines, if realistic, can inject a sense of urgency into goal attainment and can motivate employees to work hard and with dedication. The dedication becomes even higher when appropriate rewards are related with the timely goal attainment.
Another list of criteria for evaluating goals and objectives includes:
Acceptable - Is the objective acceptable to managers and KEY stakeholders?
Flexible - Is the objective adaptable to unforeseen changes in the firm’s environment?
Measurable - Does the objective clearly state what will be achieved and when it will be achieved?
Achievable - Is the objective achievable? Can it be reached?
Motivating - Is the objective’s target high enough to challenge, yet realistic and achievable?
Suitable - Does the goal/objective fit with the mission statement/purpose and with other important long-term objectives?
Understandable - Will managers at all levels understand what senior managers are trying to accomplish and achieve by setting the specific long-term objective?
A memory aid for the seven characteristics of well-defined goals and objectives is "AFMAMSU"
After formulating the mission statement, the next step for the company is the establishment of major goals.
The goals designate specific results the businesses want to achieve. In this context, the purpose of goals is to specify, as accurately as possible, as to what is to be done, if the company is to attain its mission.
Goals are more specific than the mission but less specific than objectives. Objectives define and refine the goals further. Strategic goals help managers to establish end results of activities in general without getting bogged down in issues of measurement and timing.
Goals, in general, can be long term or short-term. Short term goals generally cover a period of about one year. Long term goals cover a time period beyond one year. Sometimes, there is a category of intermediate goals which cover a time period of between one and five years. Long term goals are usually related to such issues as customer satisfaction, improvements in product quality, worker efficiency and productivity, innovation and so on. These long term goals require management to do strategic planning in terms of long term profitability and in terms of long term investments in equipment, people, research and development and so on.
Goal Characteristics
According to M.D. Richards, meaningful goals should have four characteristics.
First, goals should be sufficiently specific so that they are precise and measurable. It would assist management in monitoring the progress towards achievement of these goals at each specific point in time.
The second characteristic is concerned with the issues that a goal addresses. A goal should only address important issues. Short-term goals and objectives should be left to the lower management to plan and achieve. Such important issues as reducing costs or improving quality should be included in goals,which are to be achieved by top or middle management. For example, Boeing’s goal of being a market leader in aircraft business by maintaining a minimum of 60 percent market share is an important issue that a goal addresses.
The third characteristic of well constructed goals is that they should be realistic and challenging. Challenging goals motivate managers to be innovative and ambitious about improving the operations. However, the goals have to be realistic and compatible with the resources available. An unrealistic goal would cause resentment among employees.
For example, Boeing Company decided to achieve a 30 percent unit cost reduction by improving efficiency of operations. However, the time period they projected in achieving this goal was 6 years. This goal was considered challenging and realistic. The goal would have been unrealistic and unachievable if they had projected the time period for such cost reduction much less than 6 years’
The fourth characteristic is the specification of time period in which a given goal is to be achieved. For example, when Boeing decided to cut the per unit cost by 30 percent, they put the time frame to be 6 years. Deadlines, if realistic, can inject a sense of urgency into goal attainment and can motivate employees to work hard and with dedication. The dedication becomes even higher when appropriate rewards are related with the timely goal attainment.
Another list of criteria for evaluating goals and objectives includes:
Acceptable - Is the objective acceptable to managers and KEY stakeholders?
Flexible - Is the objective adaptable to unforeseen changes in the firm’s environment?
Measurable - Does the objective clearly state what will be achieved and when it will be achieved?
Achievable - Is the objective achievable? Can it be reached?
Motivating - Is the objective’s target high enough to challenge, yet realistic and achievable?
Suitable - Does the goal/objective fit with the mission statement/purpose and with other important long-term objectives?
Understandable - Will managers at all levels understand what senior managers are trying to accomplish and achieve by setting the specific long-term objective?
A memory aid for the seven characteristics of well-defined goals and objectives is "AFMAMSU"
