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Organizational Goals

Every organization has various types of goals. "Organizational goals are


desired states of affairs or preferred results that organizations
attempt to realize and achieve" (Amitai Etzioni). The idea of
organizational goals has a long history in economics, in which the classic
position posits an entrepreneur or ownership group which in turn establishes
the goals of the firm. Alternatively, these goals may represent a concesus
arrived at by all members of the organization.
One useful scheme for describing organizational goals was provided by
Charles Perrow. He has identified the following types of organizational goals:
* Officials goals. These goals are the formally stated goals of an
organization described in its charter and annual reports and they are
emphasized in public statements by key executives.
* Operative goals are the outcomes that the organization actually
seeks to attain through its operating policies and activities.
* Operational goals Organizational goals define the performance
objectives and desired behaviours within an organization.
However, a typical social organization today has multiple stakeholdersgroups of people, and consequently has multiple goals, which, at times, may
be mutually conflicting.
According to Perrow, multiple organizational goals can be classified into
four major categories:
* Output goals. These goals are the "end product," such as consumer
products, services, health care, or education.
* System goals. System goals relate to the organization itself, and they
consist of such things as growth, stability, profit, efficiency, market share.
* Product goals. Product goals consist of the characteristics of the
goods or services, such as quality, styling, uniqueness, variety, and price.
* Derived goals refer to the way an organization uses its power and
influence to achieve other social or political goals (such as employee welfare,
community services, or political aims).
Henry Minztberg has provided a different classification of goals:
* System goals. There are four system goals: survival, efficiency, control,
and growth.

* Formal goals. Formal goals are used by managers to tell everyone what
they are doing.
* Ideological goals. These goals are what the people within the
organization believe in.
* Shared personal goals. These goals are what people within the
organization come together to accomplish for their mutual benefit.
For most organizations, goals are constantly changing and members of the
organizations must respond appropriately, by formulating new goals as well
as deciding which goals will be accomplished, and in what order.
Organizational Resources
The organization is where resources come together. Organizations use
different resources to accomplish goals. The major resources used by
organizations are often described as follow: (1) human resources, (2)
financial resources, (3) physical resources, and (4) information resources.
Managers are responsible for acquiring and managing the resources to
accomplish goals.
What Is Management?
The term management can be and often is used in several different
ways. Mary Parker Follett, described management as "the art of getting
things done through people." FromPeter Drucker's viewpoint, managers
give direction to their organizations, provide leadership, and decide how to
use organizational resources to accomplish goals.The term management in
this thesis refers to the definition of management described by Richard L.
Daft:
"Management is the attainment of organizational goals in an
effective and efficient manner through planning, organizing, leading,
and controlling organizational resources"
There are two important ideas in this definition: (1) the four functions of
planning, organizing, leading, and controlling and (2) the attainment of
organization goals in an effective and efficient manner.
Organizational Goals
Definition
Organization goals: Those ends that an organization seeks to achieve by its existence and
operation.

Goals are predetermined and describe future results toward which present efforts are directed.
Types of Goals
Official goals are the general aims of an organization as expressed in the corporate charter,
annual reports, public statements and mission statements. Their purpose is to give the
organization a favourable public image, provide legitimacy, and justify its activities.
Operative goals reflect the actual intention of an organization. They describe the concrete steps
to be taken to achieve the organization's purpose. They often don't correspond with official goals.
For example: Many organizations mention environmentally friendly behaviour as a goal of the
organization. However in a study of organizations actually including environmental friendly
behaviour as an organizational goal, very few had corresponding operative goals, i.e. very few
delineated how such behaviour would be implemented in the different departments of the
organization.
Additional examples: Most prisons have rehabilitation of prisoners, preparing them for reintegrations into society as their official goal, however in practice, most of their operative
procedures involve aspects of custodial care. For many voluntary organizations, especially in
these days of funding cutbacks, the community service which is their official mandate or goal
takes secondary precedence to the fundraising activities which will ensure their survival.
Reasons for differences between official and operative goals
1. Participants disagree on the organizations actual goals. Pfeffer and Salancik (1989)
interviewed the officers of several organizations and asked the simple question: what is
the main goal of your organization. They found very little agreement. Each officer
viewed the goal of the organization through the lens of his/her own
department/division. From the results of this study, Pfeffer and Salancik came to the
conclusion that there is really only one clear and clearly shared goal in any organization,
and that is survival.
2. Even if there is agreement as to what the organization's official goals are, perceptions
about how to accomplish official goals may differ.
3. Official goals are often financially or politically unrealistic
4. Operative goals are the result of internal negotiations among groups and coalitions who
want to make sure their interests are represented and therefore they often deviate
from the official goals.
Some organizations never state official goals, not to attract potential competition or opposition.
One can determine an organizations true goals not by reading their charter but by examining
resource allocation process.

Benefits of organizational goals


1. Goals serve as guidelines for action, directing and channelling employee efforts. They
provide parameters for strategic planning, allocating resources and identifying
development opportunities.
2. Goals provide constraints in the organization. Choosing certain goals reduces discretion
in pursuing other goals. Eg. The goal of maximising stockholder dividends immediately
reduces financial resources available for expense accounts.
3. Goals act as a source of legitimacy by justifying an organization's activities and
existence. For new organizations the struggle for legitimacy is great. Maintaining
legitimacy is easier but still, some organizations do lose legitimacy. For example imagine
a hospital whose goal was to increase occupancy by performing as much surgery as
possible. Such a goal would surely reduce its legitimacy.
4. Goals define standards of performance. To the extent that goals are clearly stated, they
set standards for evaluation.
5. Goals provide a source of motivation . By presenting a challenge and how to achieve it,
organizational goals act as behavioural incentives. For example: the path-goal theory of
leadership.
Key organizational goals
Drucker, an organizational guru, has identified 8 key areas in which organizations should
establish result oriented goals:
1. Market share
2. Innovation. Tom Peters found that excellent companies are obsessed by innovation. Eg.
Minnesota Mining and Manufacturing (3M) has generated 25% of its sales from
products less than 5 yrs old.
3. Productivity. This is probably the most oft cited goal of all, to produce greater outcomes
with fewer inputs. This provides organizations with a competitive edge. For example, GE
estimates that a one percent increase in productivity at their plants translates into $300
million dollars of increased revenues. As productivity increases market share goals can
be pursued by dropping prices.
4. Physical and financial resources. Renovating and maintaining equipment is important in
the long run for an organization. Increasing cash flow is often important for new
ventures.
5. Profitability. This is usually expressed as a percentage and should always be stated.
6. Management performance and development. Management training is important
because management is key to organization success. For example, GE has a special
course in Crotonville for up and coming young managers, and IBM spends 15 days per
year training management in better management practices. This is often a neglected
aspect in many organizations.
7. Employees performance and attitude goals. Employees are the most important asset in
any organization, although many organizations don't act as if they believe this.

8. Social responsibility. More and more organizations see this as somewhat important to
gain legitimacy on the public's eye. These days one is witness to organizations providing
matching funds for fundraising efforts and giving their employees a certain number of
paid hours time off to volunteer in community activities.
Individual vs organization goals
Organizations don't make goals; individuals do. Therefore, goals will reflect the interests of the
individual. The greater the overlap between an individual's goals and organizational goals, the
better for the organization. Unfortunately often this is not the case. For example, it may be in the
best interests of an organization to amalgamate certain departments or to out-source some kinds
of tasks, but this may infringe on the power of certain departments and their leaders, so these
goals will not be supported.
Goals are set in an organization by creating coalitions of non-competing groups. There is
constant bargaining among the different organizational leaders to find the right direction of the
organization. Organizational groups with greater power will have more control over the direction
of the organization. This is not always in the best interests of the organization.
All business organizations should have written goals that are part of their business plan. These
goals can describe what the company plans to accomplish in terms of market share, growth and
profitability. Goals may also be set for internal measurement like expanding staff or boosting
employee morale. Businesses should aim to have goals that are specific, measurable, attainable,
relevant and timely. There are many benefits to setting goals.
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Provides Focus
When organizations set goals for employees, it shows employees the organization's
priorities. Employees then know what to focus on in the coming quarter or year, thus prioritizing
projects and other tasks as they weigh how their work will impact those goals. It also provides
focus for management when deciding on major projects and how to best divide tasks among
employees.
Increases Motivation
Organizational goals give employees something to strive for in their daily tasks. For example,
instead of merely aiming for general profitability, employees can work to improve profitability
10 percent by year-end. Most people strive to be successful, but having a specific standard that
constitutes success will especially motivate them to strive for excellence. If goals are tied to
other external awards, such as group recognition or rewards, it can further improve the
motivation level.

Related Reading: The SMART Goal-Setting Process


Improves Group Cohesion
Many business goals cannot be reached unless employees of all levels work together as a whole
to reach the goals. This can improve group cohesion and collaboration when employees realize
the goals will only be reached when teamwork is present. Managers can further enforce this
through group rewards given when the organization meets its goals.
Increases Employee Worth
Including employees in the goal-setting process will increase their buy-in for the project and the
business as a whole. It tells them their input is valued and important, thus giving them a sense of
ownership. Consequently, the goals are no longer only management's; they are the
goals of everyone in the organization.
Offers Measurability
Set goals using the SMART principle: specific, measurable, attainable, relevant and timely. This
will enable employees to gauge their progress, see how their efforts are having an impact and
assess how far they have yet to go to reach the goal.
Goal setting gives an organization a road map for achieving its ultimate mission, as reflected in
the organization's mission statement. Take a look at the company's business plan and review its
stated milestones. Each represents a goal in itself that once reached places the company one step
closer to achieving the ultimate corporate mission.
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Milestones and Corporate Mission
Milestone statements and the Corporate Mission Statement are the organization's goals, already
spelled out in black and white in the organization's business plan. According to Bplan.com,
milestones are specific actions to be taken, that once achieved indicate a demonstrable level of
success. Achieving a milestone means a goal is reached. Entrepreneur.com counsels that a
mission statement is a description of the company's purpose and its philosophical position about
its purpose.
Study the business plan and use these statements as the organization's goal statements. If there
are no milestone statements or mission statement, write them. For example, write a mission
statement by asking, What business is my company in? What does my company believe in?
How does my company apply what it believes in to its business?" Write mission statements by
asking where your company want to be in six months, 10 months and one year in terms of
product development, revenue and community service.

Articulate Achievement Steps


Plot the achievement of each milestone in steps. Articulate each individual step needed to take
the organization from where it currently is to the point of the achievement of each milestone, in
succession.
Related Reading: Goal Setting Tips
Keep the Mission in Mind
Plot the road map through achievement of each milestone so that once all milestones are
achieved, the goal stated in the corporate mission statement is reached. This process makes the
milestones steps in themselves, leading the organization to achievement of its ultimate goal, that
stated in the organization's mission statement.
Contingencies
Put a back-up plan in place to anticipate snags in achieving the milestone and mission
statements. For example, anticipate the relevance and applicability of the milestones to the
organization lessening over time and as the organization takes directions not originally
anticipated at its inception, when the milestone and mission statements were first written.
Motivation and Reward
Keep personnel motivated to do their part in achieving the organization's goals. Document
progress publicly by posing charts and progress reports, and reward individual and group
contributions that produce significant progress toward the goals with incentives such as an inhouse lunch, gift cards or the right to leave a little early on a Friday.
To manufacture the career you want, goals first must be set. According to employment resource
Mind Tools, setting goals allow you to see what must be achieved to create the future you
envision. Setting goals can be challenging unless time is set aside to review a few goal-setting
tips.
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Research
Take the time to research your chosen career so that you can better set achievable goals. There
may be several things you need to do for which you were unaware on the way to an overall goal.
Do not set goals without first having a complete understanding of what you are getting into and
what will be needed to accomplish your career goals.
Milestones
To set achievable goals, examine them in layers, suggests Mind Tools. There is the primary
overall goal, then a series of smaller goals that must be attained to make the primary goal a
reality. To become an accountant, for example, it takes more than just a stated desire. There are

educational goals, certification goals and employment goals that have to be met. All of these
steps are milestones to achieving the primary overall goal. Set achievable milestones and follow
them to your main goal.
Related Reading: The Psychology of Goal Setting
Review Your Goals
According to Quintessential Careers, setting goals is similar to creating a business plan. Each
year a business owner reviews his plan to see where changes are needed to keep the plan
effective. Setting your career goals works in the same way. Each year you should re-examine
you goals to determine if additions, subtractions or changes need to be made to your milestones.
Stay Connected
It can be difficult to accomplish career goals alone. As you set about to accomplish milestones,
develop a network of resources to find more information about your career goals. These can be
affiliations with professional organizations in your field or contacts with people at all levels of
your industry. Stay connected to the resources in your field to help you achieve your overall
goals.
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References (3)
Resources (1)
About the Author
George N. Root III began writing professionally in 1985. His publishing credits include a weekly
column in the "Lockport Union Sun and Journal" along with the "Spectrum," the "Niagara Falls

Gazette," "Tonawanda News," "Watertown Daily News" and the "Buffalo News." Root has a
Bachelor of Arts in English from the State University of New York, Buffalo.
1
Developing SMART Goals for Your Organization1
Henry M. Cothran and Allen F. Wysocki2
You've got to be very careful if you don't know where you're going, because you might
not get there. Yogi Berra
Goal setting is one of the basic tools used by organizations to assist in setting a
direction and achieving it. Successful organizations often set long- and short-term goals
for service development, improving quality, reducing errors, becoming more customerfocused, and building better internal and public relations. Jeffery Davis, Managing
and Achieving Organizational Goals
Individuals may set goals to achieve a personal objective such as career advancement.
This publication is designed to introduce a sequential process for setting goals. It begins
by defining a goal and identifying reasons for setting goals. It then describes a process
based on the acronym SMART for developing and implementing goals.
Defining "Goal"
A goal is a statement of a desired future an organization wishes to achieve. It describes
what the organization is trying accomplish. Goals may be strategic (making broad
statements of where the organization wishes to be at some future point) or tactical
(defining specific short-term results for units within the organization). Goals serve as an
internal source of motivation and commitment and provide a guide to action as well as a
means of measuring performance (Barton, 2000). Defining organizational goals helps to
conceptualize and articulate the future direction of the organization, thus allowing those
responsible for setting that direction to develop a common understanding of where the
organization is heading. Goals provide a way of assuring that an organization will get
where it wants to go.
Setting Goals
How goals are set is as important as the goal itself. Thus it is important that goals meet
specific criteria that can be used to easily assess them. One way of doing this is to use
the acronym SMART as a way of evaluating the goal. An internet search for SMART
goals yielded some 6.7 million hits. One of those hits, Measure-X.com said that the
origin of the acronym is lost, and the specific traits are not universally agreed upon, [but]
SMART goals still provide a great framework to improve your goal setting and help you
create more effective goals. A further search of the first forty websites found that most
used the following words to define a SMART goal:

Specific

Measurable
Attainable
Relevant
Time-bound

Specific
A goal is specific when it provides a description of what is to be accomplished. A
specific goal is a focused goal. It will state exactly what the organization intends to
accomplish. While the description needs to be specific and focused, it also needs to be
easily understood by those involved in its achievement. It should be written so that it
can be easily and clearly communicated. A specific goal will make it easier for those
writing objectives and action plans to address the following questions:
Who is to be involved?

What is to be accomplished?
Where is it to be done?
When is it to be done?

Measurable
A goal is measurable if it is quantifiable. Measurement is accomplished by first obtaining
or establishing base-line data. It will also have a target toward which progress can be
measured, as well as benchmarks to measure progress along the way. A measurable
goal will answer questions such as:
How much?

How many?
How will you know when it is accomplished?

Attainable
There should be a realistic chance that a goal can be accomplished. This does not
mean or imply that goals should be easy. On the contrary, a goal should be challenging.
It should be set by or in concert with the person responsible for its achievement. The
organization's leadership, and where appropriate its stakeholders, should agree that the
goal is important and that appropriate time and resources will be focused on its
accomplishment. An attainable goal should also allow for flexibility. A goal that can no
longer be achieved should be altered or abandoned.

Relevant
Goals should be appropriate to and consistent with the mission and vision of the
organization. Each goal adopted by the organization should be one that moves the
organization toward the achievement of its vision. Relevant goals will not conflict with
other organizational goals. As noted earlier, goals are set by or in concert with the
person responsible for achievement. It is important that all short-term goals be relevant
(e.g., consistent) with the longer-term and broader goals of the organization.
Time-bound
Finally a goal must be bound by time. That is, it must have a starting and ending point. It
should also have some intermediate points at which progress can be assessed. Limiting
the time in which a goal must be accomplished helps to focus effort toward its
achievement.
References
Barton, R.B. 2000. Chapter 7, Organizational Goal Setting and Planning. Murray State
University, Murray, KY.
http://campus.murraystate.edu/academic/faculty/rb.barton/40mgmt07.ppt#256,1,chapter
7.
Davis, Jeffery H. N/D. Chapter 1, Managing and Achieving Organization Goals.
American Management Association, New York,
NY.http://www.flexstudy.com/catalog/index.cfm?location=sch&coursenum=95086.
Measure-X. S.M.A.R.T. Goals. N.D. E-mail Newsletter #27, Phoenix, AZ.
http://www.measure-x.com/newsletter/27.html.
Footnotes
1.
This document is FE577, one of a series of the Food and Resource Economics
Department, Florida Cooperative Extension Service, Institute of Food and Agricultural
Sciences, University of Florida. Original publication date October 2005. Revised
December 2008. Reviewed February 2012. Visit the EDIS website
at http://edis.ifas.ufl.edu.
2.
Henry M. Cothran, Associate-In, and Allen F. Wysocki, Associate Professor,
Department of Food and Resource Economics, Florida Cooperative Extension Service,
Institute of Food and Agricultural Sciences, University of Florida, Gainesville, FL.

The Institute of Food and Agricultural Sciences (IFAS) is an Equal Opportunity


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only to individuals and institutions that function with non-discrimination with respect to
race, creed, color, religion, age, disability, sex, sexual orientation, marital status,
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UF/IFAS Extension publications, contact your county's UF/IFAS Extension office.
U.S. Department of Agriculture, UF/IFAS Extension Service, University of Florida, IFAS,
Florida A & M University Cooperative Extension Program, and Boards of County
Commissioners Cooperating. Nick T. Place, dean for UF/IFAS Extension.