Strategic Objectives In Organization

Strategic Objective Setting in Organizations

Setting objectives for the organization is one of the most important and challenging task. The failure and success of the firm depends upon the setting of strategic objectives. Strategic objectives are formulated for a longer period and are set for three to five years. Strategic objectives are divided into targets for business units, departments; functional areas, teams, and individuals. These objectives are a blend of financial and nonfinancial measures. This enables the organization to align itself to achieve the strategic objectives. Organizations follow the following poits while setting the strategic objectives. •

To see the organization’s competencies and competitive advantages

•

To see the current and projected influences on the industry and the competitive environment

•

To see the current and future constraints on resources and operations

•

To see the current possibilities, probabilities, and capabilities in the organization.

•

To analyze the previously pursued opportunities that didn’t work.

•

To see how opportunities will work?

•

To analyze what things are needed in the organization?

•

To clarify what things should be changed or shed?

•

The most important factor what is the current financial position (debt, equity, cash), etc.?

•

To analyze the current relationships with revenue, gross margin and profit margin, etc.

The above mentioned points explain that in order to create appropriate strategic objectives, organizations work to understand their internal capabilities as well as the environment in which they operate. Further, they also seek to clarify their purpose or mission. The organization focuses on these issues allowing it to create a fit between its resources and the demands of the competitive situation. Role of Setting Objectives in Strategic Planning The role of objective setting in strategic planning is very clear. Without objective strategic plans cannot work. Objective setting gives the firm a guideline and direction from where to start and where the organization is going. Objectives provide a target to aim and to achieve that aim all the efforts are focused on it. Another role the objective play is that it motivates the managers and team members for getting the reward upon achievement. The objectives setting supports to evaluate the success of any project in the strategic planning..