Organizational Goals

Organizational goals are strategically set objectives that outline

expected results and guide employees’ efforts. Purposes of
organizational goals are to provide direction to employees of the
organization. Goals are critical to organizational effectiveness as they
serve as an objective for the employees and they work to achieve it.

Importance and purpose of organizational goals

Goals are critical to organizational effectiveness as they serve several
purposes. Organizations have several different kinds of goals, all of
which must be appropriately managed. They represent not only the
endpoint of planning but also the end toward which all other
managerial functions are aimed.
4 reasons why goals are important: -
Goals Provide Guidance and Direction.
Goals Intensely Planning and Actions
Goals Motivate.
Goals Help in Control.

Types of Organizational Goals

Strategic Goals
Strategic goals are goals set by and for top management of the
organization. These goals are made by focusing on broad general issues.
Strategic goals or strategies are usually long-term and from this goal,
other goals are made and set for different time-frames and areas.

Tactical Goals
Tactical goals are set for middle managers. These goals focus on how to
operationalize actions necessary to achieve the strategic goals. Middle
managers of various departments are usually responsible for their
attainment. Tactical goals are set by the middle managers, but often
top-managers set tactical goals for the middle managers.

Operational Goals
Operational goals are set by and for lower-level managers. Operational
goals are usually made to tackle shorter-term issues associated with the
tactical goals and lower-managers are responsible for their attainment.

Organizational Plans
Planning is deciding in advance – what to do, when to do and how to
do. It bridges the gap from where we are and where we want to be. This
organizational plan is a systematic thinking about ways and means for
accomplishment of pre-determined goals.

Strategic Planning
Strategic planning covers long-term goals with all the necessary
resources to achieve these goals. It typically includes a timeframe from
1 to 5 years.
Also, a well thought out strategic plan considers controllable and non-
controllable variables, and how to adjust to them.

Tactical Planning
Tactical planning includes activity and implementation details on how
your organization will reach strategic goals. Also, tactical planning
timeframes are typically short (less than one year).
Operational Planning
Operational planning entails specific methods, procedures, and
standards for different areas of an organization. An operational plan
also includes specific objectives and targets, which are then assigned to
employees to carry out. For example, you would typically have an
operational plan for the Marketing department, HR department and so
on.

Strategic Management
Strategic management is the process of decision making and planning
which leads to the development of an effective strategy to help achieve
organizational goals.
In this process, the strategists determine objectives and make strategic
decisions. The strategic management process is initiated to enable the
organization’s top managers to make those decisions that affect the
long-term profitability and sustainability of the organizations.

Concept of Strategy
A strategy is considered as a long-term plan that relates the strategic
advantages of an organization to the challenges of the environment.
It involves the determination of the long-term objectives of the
organization and the adoption of courses of action. It also involves the
allocation of resources necessary to achieve the objectives.

Types of Strategic Alternatives

Corporate level strategy.
Business level strategy.
Functional level strategy.
Operational level strategy.
Corporate-level strategy
Corporate strategy defines the markets and businesses in which a
company will operate. Corporate strategy defines the long-term
objectives and generally affects all the business-units under its
umbrella.

Business-level strategy
Business strategy defines the basis on which firm wilt compete. It is a
business-unit level strategy, formulated by the senior managers of the
unit. This strategy emphasizes the strengthening of a company’s
competitive position of products or services.

SWOT Analysis
SWOT analysis is a useful tool for analyzing an organization’s overall
situation. This approach attempts to balance the internal strengths and
weaknesses of the organization with the external opportunities and
threats. SWOT stands for strengths, weaknesses, opportunities, and
threats.

Evaluating an Organization’s Weaknesses

Organizational weaknesses are skills and capabilities that do not enable
an organization to choose and implement strategies that support its
mission. An organization has essentially two ways of addressing
weaknesses. First, it may need to make investments to obtain the
strengths required to implement strategies that support its mission.
Second, it may need to modify its mission so that it can be
accomplished with the skills and capabilities that the organization
already possesses.
Evaluating an Organization’s Opportunities and
Threats
Whereas evaluating strengths and weaknesses focuses attention on the
internal workings of an organization, evaluating opportunities and
threats requires analyzing an organization’s environment.
Organizational opportunities are areas that may generate higher
performance. Organizational threats are areas that increase the
difficulty of an organization performing at a high level.

Formulating Business Level Strategies

Porter’s Generic Strategies

Porter called the generic strategies "Cost Leadership", "Differentiation"
and "Focus".

The Cost Leadership Strategy

The Cost Leadership strategy is exactly that – it involves being the
leader in terms of cost in your industry or market. Simply being
amongst the lowest-cost producers is not good enough, as you leave
yourself wide open to attack by other low-cost producers who may
undercut your prices and therefore block your attempts to increase
market share.

The Differentiation Strategy

Differentiation involves making your products or services different from
and more attractive than those of your competitors. How you do this
depends on the exact nature of your industry and of the products and
services themselves, but will typically involve features, functionality,
durability, support, and also brand image that your customers value.

The Focus Strategy

Companies that use Focus strategies concentrate on particular niche
markets and, by understanding the dynamics of that market and the
unique needs of customers within it, develop uniquely low-cost or well-
specified products for the market. Because they serve customers in
their market uniquely well, they tend to build strong brand loyalty
amongst their customers. This makes their particular market segment
less attractive to competitors.

Strategies based on the Product Life Cycle

The product life cycle is a model that shows how sales volume changes
over the life of products. Managers can use the framework of the
product life cycle—introduction, growth, maturity, and decline—to plot
strategy. For example, management may decide on a differentiation
strategy for a product in the introduction stage and a prospector
approach for a product in the growth stage. By understanding this cycle
and where a particular product falls within it, managers can develop
more effective strategies for extending product life.

Formulating Corporate-Level Strategies

There are three types of strategies: single-product strategy, related
diversification, and unrelated diversification.
Single-Product Strategy
A strategy in which an organization manufactures just one product or
service and sells it in a single geographic market. The single-product
strategy has one major strength and one major weakness. By
concentrating its efforts so completely on one product and market, a
firm is likely to be very successful in manufacturing and marketing the
product. Because it has staked its survival on a single product, the
organization works very hard to make sure that the product is a success.
Of course, if the product is not accepted by the market or is replaced by
a new one, the firm will suffer.

Related Diversification
A strategy in which an organization operates in several businesses that
are somehow linked with one another. Virtually all larger businesses in
the United States use related diversification. Pursuing a strategy of
related diversification has three primary advantages. First, it reduces an
organization’s dependence on any one of its business activities and thus
reduces economic risk. Second, by managing several businesses at the
same time, an organization can reduce the overhead costs associated
with managing any one business. Third, related diversification allows an
organization to exploit its strengths and capabilities in more than one
business.

Unrelated Diversification
A strategy in which an organization operates multiple businesses that
are not logically associated with one another. Unrelated diversification
was a very popular strategy several years ago. In theory, unrelated
diversification has two advantages. First, a business that uses this
strategy should be able to achieve stable performance over time.
During any given period, some businesses owned by the organization
are in a cycle of decline, whereas others may be in a cycle of growth.
Second, unrelated diversification is also thought to have resource
allocation advantages. Every year, when a corporation allocates capital,
people, and other resources among its various businesses, it must
evaluate information about the future of those businesses so that it can
place its resources where they have the highest potential for return.
Despite these presumed advantages, research suggests that unrelated
diversification usually does not lead to high performance.

Managing Diversification
Portfolio management techniques are methods that diversified
organizations use to determine which businesses to engageable and
how to manage these businesses to maximize performance. Two
important portfolio management techniques are the BCG matrix and
the GE Business Screen.

BCG Matrix
(Boston Consulting Group) Matrix A framework for evaluating
businesses relative to the growth rate of their market and the
organization’s share of the market. The BCG matrix helps managers
develop a better understanding of how different strategic business units
contribute to the overall organization. Explain Graph.
GE Business Screen
A method of evaluating businesses along two dimensions: (1) industry
attractiveness and (2) competitive position; in general, the more
attractive the industry and the more competitive the position, the more
an organization should invest in a business. Such a classification enables
managers to allocate the organization’s resources more effectively
across various business opportunities. Think of the GE Business Screen
as a way of applying SWOT analysis to the implementation and
management of a diversification strategy. Explain Graph.