Figure 11.

3
The programs, budgets, and guidelines serve as the roadmap in the implementation of
business and functional level strategies. The hierarchy of these elements is illustrated in Figure
11.3. The elements contain information about the target, people involved, cost, expected
completion time, and expected output.
Also the hierarchy of programs, budgets, and procedures are the structured organization
and relationship between different elements within an organization. This hierarchy is crucial for
effective management, planning, and implementation of activities.

Programs:
● Definition: Programs are sets of related activities and projects designed to achieve
specific organizational goals and objectives.
● Role: Programs represent the overarching strategic initiatives of an organization. They
are often long-term and serve as a framework for various projects and activities.
Budgets:
● Definition: Budgets allocate financial resources to different programs, projects, and
activities within an organization.
● Role: Budgets provide a financial roadmap, ensuring that the necessary funds are
available for the successful execution of programs. They help prioritize and allocate
resources efficiently.
Procedures:
● Definition: Procedures are documented step-by-step guides outlining how specific tasks
or activities within a program are to be performed.
● Role: Procedures are the operational guidelines that ensure consistency, efficiency, and
compliance with organizational policies. They help standardize processes and promote
best practices.
In summary, the hierarchy of programs, budgets, and procedures establishes a structured
framework that enables organizations to effectively plan, budget, and execute activities in line
with their strategic objectives.

PROGRAMS
A strategic program is a plan embodying the different activities that must be
accomplished to achieve the objectives of a company through the efficient utilization of its
resources. Programs vary in content and structure across business and functional units.
However, all programs are anchored on the general business objective (e.g., to increase the
revenue by 50% this year). Each business and functional unit prepares a program distinct, to a
certain extent, from the other units.
At the business level, the setting of a program is spearheaded by a business level
manager. It is participated by different functional level managers and other key personnel of a
particular division.
At the functional level, the setting of a program is spearheaded by a functional level
manager with the participation of important, lead employees of different subunits. For example,
in the production and operation functional unit, representatives may come separately from the
purchasing, shipping, and quality control units.

The following steps are to be observed in the preparation of a program:

1. Define the business or functional objective.
2. Set the key performance indicator (KPI).
3. Identify the people involved, dates for program review, and completion time.
4. Prepare the program report.

Define the Business or Functional Objective

The first step in setting the business or functional level program is to define the objective.
The objective must be vertically consistent with the corporate level objective. It must also be
horizontally consistent with the objectives of other business and functional units. Figure 11.1
illustrates how the business and functional level objectives are aligned with the corporate
objective, which is to increase the company's revenue by 50% over the past year's performance.
In setting an objective, one must follow the SMART (specific, measurable, attainable,
realistic, and time-bound) principle. Usually, the objective is expressed in quantifiable figures to
be specific and measurable. In crafting the objective, the resources of a company should be
considered for it to become realistic and attainable.

Defining the business or functional objective is a critical step in the strategic planning
process for organizations. An objective is a specific, measurable, achievable, relevant, and
time-bound (SMART) goal that an organization or a specific function within the organization
aims to achieve.
 ​ Business Objective:
● Definition: A business objective is a clear, concise statement that outlines a
desired outcome or result that contributes to the overall success of the
organization.
● Nature: Business objectives are typically broad and strategic, focusing on
long-term goals and the organization's overall mission and vision.
● Example: Increase market share by 15% within the next three years, expand
product offerings to target a new customer segment, or improve customer
satisfaction ratings by 20%.
​ Functional Objective:
● Definition: A functional objective is a goal set within a specific department or
function of the organization, such as marketing, finance, human resources, or
operations.
● Scope: Functional objectives are more specific and directly contribute to the
achievement of broader business objectives.
● Example: Reduce production costs by 10% in the next fiscal year, enhance
employee training programs to improve productivity, or implement a new
marketing strategy to increase online sales by 20%.

Key Components of Objectives:

​ Specific:
● Clearly state what needs to be achieved. Avoid vague or ambiguous language to
ensure a precise understanding of the goal.
​ Measurable:
● Define criteria for measuring progress and success. This might include numerical
targets, percentages, or other quantifiable metrics.
​ Achievable:
● Ensure that the objective is realistic and attainable. Setting overly ambitious
goals that are beyond reach can be demotivating.
​ Relevant:
● The objective should align with the overall mission, vision, and strategic priorities
of the organization or function.
​ Time-Bound:
● Set a specific timeframe for achieving the objective. This creates a sense of
urgency and helps in monitoring progress.

Importance of Defining Objectives:

​ Strategic Alignment:
● Objectives align the efforts of the organization or a specific function with its
long-term strategy, ensuring that everyone is working towards common goals.
​ Performance Measurement:
 ● Clear objectives provide a basis for assessing performance. They help in
determining whether the organization is on track to meet its goals.
​ Motivation and Focus:
● Well-defined objectives give employees a sense of purpose and direction.
Knowing what needs to be achieved helps in focusing efforts and resources.
​ Decision-Making:
● Objectives guide decision-making processes by providing a framework for
evaluating choices that align with the organization's goals.
​ Communication:
● Clearly communicated objectives foster a shared understanding among
stakeholders, promoting collaboration and cohesion.

In summary, whether at the business or functional level, defining objectives is a fundamental

aspect of strategic planning, providing a roadmap for organizations to achieve success in a
structured and measurable manner.