The Hierarchy

of Objectives
By Charles H. Granger
Presented By: Amruta Navghare (06)
 Why is a conceptual Framework of objectives
important in decision making?
 What are the most important characteristics
of good objectives?
 How should objectives be chosen and
established?
 How can objectives be used profitably by
management?
Some Arising Conflicts
 Many a company is in trouble because customer-
service objectives are not properly related to
profit objectives.

 Some companies recruit too many top-rate

college graduates to be consistent with the
rather modest objectives of the over-all
organization. When after a Few years it becomes
apparent to these high-potential individuals that
tile organization docs not really intend to pursue
very challenging objectives, the result is wasteful
high turnover.
 What should an objective accomplish?

 It should facilitate decision making by helping

management select the most desirable alternative
courses of action

 It should be suggestive of tools to measure and

control effectiveness

 It should be ambitious enough to be challenging

 It should suggest cognizance(awareness) of
external and internal constraints.

 It should be related to both the broader and the

more specific objectives at higher and lower
levels in the organization
Important characteristics of hierarchies and its
implications
Internal Constraints & Challenges
Eg.Personal Skills,Needs,Finances,Facilities ,Time ,Knowledge
External Constraints & Challenges
Eg.Legal,Market Competitive, Public opinion factors
 Leading Characteristics
 The full range of objectives and guiding considerations is distressingly
broad

 Short-term programs and budgetary objectives may change in less

than a year. But long-range plans may exist for several years without
major revision.

 For most enterprises even the broad objectives are subject to change
in 20 years

 Debates on the merit of one type of objectives as opposed to another

are only meaningful in light of particular circumstances.
 Debates on how specific an objective should be are not especially
helpful.
e.g. if we have a certain percentage figure like 20% appropriate
to the year. On the other hand, 20% (or any other fixed per
cent) may be ridiculous for a recession year when nobody in
the industry can even approach the figure; it then becomes
meaningless

 Obviousness of the need for the stated objectives appears to

decrease as we approach the upper end of hierarchy

 Objectives should not only guide action but also stimulate it.
 Establishing a subobjective .
 It involves the conceptual creation of a
number of possible subobjectives, testing them against
the realities of
(1) consistency with internal resources,
(2) consistency with environmental conditions, and
(3) effectiveness/cost relationships in accomplishing the
broader objective.
 exposure (to the broader objectives, internal and
environmental constraints, and challenges), gestation,
idea emergence, testing against reality, recycling
 Much help can come From creative people — those with
high idea-emergence, good at censoring their own ideas
against reality, persistent at recycling their ideas.

 Moreover, Douglas McGregor's "Theory Y" approach to

management suggests that the higher-order personal
drives (such as those based on ego needs and self-
fulfillment needs) of these people should be coupled with
the objectives of the undertaking for the most effective
accomplishment of the mission.
In Hierarchy of objective :
 There is always a need of renewal of objectives
As same old objective has no impact, no challenge.

The hierarchy of objective helps in :

Better Planning
Management Development
Organizational Efficiency
Thus, objectives —

 . . . need not begin with the broad grand design of the enterprise, but all objectives in the
hierarchy should be consistent with it;

 . . . should make the people in the enterprise reach a bit;

 . . . should be realistic in terms of

(a) the internal resources of the enterprise, and
(b) the external opportunities, threats, and constraints;

 . . . should take into account the creative conception of a range of alternatives and the
relative effectiveness and cost of each;

 . . . should be known to each person so that he understands the goals of his own work and
how they relate to the broader objectives of the total enterprise;

 . . . should be periodically reconsidered and redefined, not only to take account of

changing conditions, but for the salutary effect of rethinking the aims of organizational
activities.
THANK YOU!!