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Corporate objectives

tell us what your organization is for

Corporate objectives are fundamental to performance
enhancing strategic planning. You find them by asking the
most important question: what is your organization really for?
The answer to this question will guide everything else in the
strategic planning process.
A corporate strategic plan is the one right at the top of any
organization's set of plans. It precedes and guides the
business plans, the operational and project plans, the budgets and cash flow
plans, human resources plans, and so on.
It is essential to clarify, agree, and write down the organization's long-range
corporate objectives early in the formal systematic strategic planning
Do this by asking 'What is Your Organization Really For?'
Another way to set people in your planning team more clearly about this is
to ask the question: 'What is the organization trying to do for whom?'
Answering this question produces the statement of purpose, and this guides
the creation of the corporate objectives.
What are your intentions?"
If you don't know where you are going, any road will get you there." Lewis
Clear agreement about the purpose of the organisation can guide everything
else in the strategic planning process. Each stage of the strategic planning
process is governed by reference to the corporate objectives that express
the statement of purpose.
Specification of these corporate aims or corporate objectives should be done
before the generation of strategic options which, in turn, should be
completed before the evaluation of possible strategic choices. The last stage
of the strategic planning process is monitoring achievement of the results
related to these objectives.

What's in a name?
The various kinds of statements of intent produced through a strategic
planning process can be confusing. They may be called aims, goals,
mission, strategic intent, strategic objectives and many other things, as well
as corporate objectives.
Often strategic planning processes begin by attempting to prepare mission
statements. These statements are often used in at least two different
Firstly they sometimes may embody the fundamental purpose of the
organisation. Even when these are regarded as stating the most
fundamental corporate objectives, goals, aims, they rarely address the most
fundamental issue of what the organisation is trying to do for whom. So we
recommend that you use a statement of purpose, rather than a mission
statement, as the starting point for your strategic planning.
Secondly they more often are used as an inspirational summary of the
current strategic intentions of the organisation. In this way mission
statements may have a role in communicating strategic intent to various
audiences. For this purpose mission statements should be prepared near the
end of the strategic planning process, not at the beginning as is common
practice. That is putting the strategic cart before the horse of a motivating
purpose. For more on this download this article, right-click to download
Putting the Horse Back in Front!.
Mission statements are often accompanied by so called vision statements.
This practice of using these two statements may or may not be helpful in
some organizations. In my experience it seems to result in some confusion
for members of the organization.
Planning with intent
After preparing for planning and arranging to involve the correct people, the
formal strategic planning process should start with the identification of the
ultimate strategic intent of the organization. Too often, companies confuse
their corporate aims or objectives, which is what they want and by when,
with their strategies, which is how they will achieve the objectives.
As I see it, the corporate purpose, as embodied in a
statement of purpose, is the raison d'tre of the whole
organization. It is the ultimate aim, or the statement of
strategic intent that trumps all others. It is determined by or
for the people for whose benefit the organization exists. Who
these Intended Beneficiaries are will vary according to the
type of organization.
Different organizations, different purposes
For example in the case of a commercial business the Intended Beneficiaries
are the owners or shareholders. Knowing this it is possible to define
a business mission in terms of shareholders benefits, often in terms
of economic value added. This will involve measuring the overall
performance of the business in terms that enable shareholders, or their
representatives, to judge whether or not the benefit per shareholder is
satisfactory, or alternatively is pointing to possible loss of shareholder
confidence. Not for profit organizations are different.
If not for profit then for what?
Non-profit organizations pose some special issues regarding purpose.
In the case of non-profit organizations, the purpose could be to benefit
students in a school, patients of a hospital, children for a child protection
agency, or whoever is the clearly defined group for whose benefit the
organization was founded.
Knowing the score
Deciding the overall "performance metrics" is a vital component in having a
strategic planning system that works. We must be able to measure
performance in terms that make sense to the intended beneficiaries. The
field of value based managementaddresses this area and the effective
deployment of strategies to deliver the desired results.
Ready, Aim,
When appropriate performance metrics have been defined in terms of
measuring the benefit to the intended beneficiaries of the organisation's
endeavours, then it is possible to set a corporate target for this
performance. When we have a clear corporate target, and we have reviewed
past performance, we can forecast possible future performance.
Before looking at possible ways to achieve the targets, we need an estimate
of the size of the task. This assessment is called gap analysis. The strategic
task is to close the gap between forecast performance using current
strategies, and the agreed range of targets for desired future performance.
When finally strategies are selected they need to be turned into specific
accountabilities for individuals. This is when a SMART goal setting process
will be useful.
Results, and not only results
For most companies there should be little difficulty in agreeing that their real
purpose, or governing corporate objective, is to generate a return on
shareholders' capital. This is of course subject to a vital constraint.
Organizations are constrained in the manner they discharge the obligations
imposed upon them by society. It should also be constrained by its own
sense of responsibility towards those likely to be affected by its activities.
In terms of business ethics, it would be quite wrong for any benefit to accrue
to any shareholders, who are or should be in the position of residual
legatees, unless and until all these obligations had been discharged. Many
companies today take special care to define their obligations and attitudes to
their employees, and other important interest groups.
However, it is important not become confused between this ethical
responsibility and most versions of the stakeholder theory which put the
organization in the almost impossible position of being an arbitrator in a
political power struggle among all the various 'stakeholder' groups. We will
cover this more fully in corporate social responsibility.
Of course, although most nonprofit organizations may be engaged in
worthwhile activities that contribute to the welfare of the communities they
operate in; it cannot be assumed they will always behave as well as they
should toward interest groups other than their intended beneficiaries. So just
like companies they must make explicit provision for not harming any such
interest groups.

Symptoms of malfunctioning of strategy are as follows:
1) Company is not performing as well as against its close rivals, similar companies or industry as
a whole.
2) Company is not performing in terms of stated objectives, return on Investment (ROI), market
share, profitability trends, EPS, etc.,
3) Corporate culture is not aligned with strategy,
4) Implementation of strategy is slow,
5) Organisational conflict and interdepartmental bickering are often symptoms of strategy
6) Managerial problems continue despite changes in personnel and if they tend to be issue-
based rather than people-based, their strategies may be inconsistent,
7) If success for one organisational department means failure for another department then it is a
symptom of strategy malfunction,
8) If policy problems and issues continue to be brought to the top for resolution, then strategy
may be malfunctioning,
9) Overtaxing of available resources is a symptom of strategy malfunction,
10) Degree of risk is high as compared to rewards,
11) Strategy is inconsistent with changing environment,
12) If strategy implementation does not give due cognizance to time horizon, then it is symptom
of strategy malfunction.

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