CHAPTER 3ESTABLISHING ORGANIZATIONA

DIRECTION:MISSIO AND OBJECTIVS

Presented by:Vaishnav Kumar

Establishing organizational direction is the second step of strategic management process, so there are two main indicators of the direction in which an organization is moving to:-

INTRODUCTION

Mission Objectives

Organizational Direction

Objectives are the target the

Organization has chosen Mission is the purpose. for why reason an organization

Organizational mission is the purpose for which or reason why, an organization exist. in general, a firm’s organizational mission contains such information as what types for products or services the organization produces.

To develop an appropriate organizational mission, management should thoroughly analyze and consider information generated during the environmental analysis process.

What is organizational Mission

Establishing an organizational mission is an important part of management’s job, because the existence of a formally expressed organizational mission generally makes it more likely that the organization will succeed.

Having an established and documented organizational mission accomplishes several important things.

WHY IS ORGANIZATIONAL MISSION IMPORTANT

The kinds of information contained in mission statements very somewhat form organization to organization.

Most mission statements seem to cover several major topics, these topics either within organization or contained materials that accompany it these may include:

Company product or service Market Technology Public image Company objectives

What Information Appears In Mission Statement ?

This part outlines the role of organizational direction through the use of organizational objectives.

Organizational objective is a target toward which the organization direct its efforts.

The term objective should be used some suggest using either “objectives” or “goals”, so this term is used to refer to target that the organization is attempting to reach.

The Nature Of Organizational Objectives

the importance of establishing appropriate objectives for an organization can not be overemphasized. Objectives provide the foundation for planning, organizing, motivating and controlling. Without objectives and their effective communication, behavior in organizations can stray in almost any direction.

The Importance Of Organizational Objectives

The organization have two different types of objectives, these are the following :

1. Short run objectives: are targets that the organization is attempting to reach within one year or two years.

2. Long run objectives: are targets that the organization is trying to reach within three to five years.

Types Of Objectives In Organizations

Most organizations have focused in one primary objective: making a profit.

Its important that the firm’s objectives should be focused on several areas, so there are eight key areas in which organizational objectives should be set as:

1. Market standing2. Innovation3. Productivity4. resource levels5. Profitability6. Manager performance and development7. Worker performance and attitude8. Social responsibility

Areas In Which Organizational Objectives Are Established

Organizational objectives exist in some form in virtually all modern organizations, as well as high quality objectives, so these may include the following:

1. Managers should develop organizational objectives that are specific.

2. Managers should set organizational objectives that require a desirable level of effort.

3. Managers should establish organizational objectives that are flexible.

4. Managers should establish organizational objectives that are reachable.

5. Managers should establish organizational objectives that are measurable.

6. Managers should develop organizational objectives that are consistent in long run and short run.

Characteristics Of High- Quality Organizational Objectives

The Process Of Establishing Organizational Direction are three major steps:-

1) Reflecting on the results of an environmental analysis.

2) Establishing an appropriate organizational mission.

3) Establishing an appropriate organizational objectives.

The Process Of Establishing Organizational Direction

Like organizational mission, organizational objectives should reflect the environment within which the organization operates. As indicated earlier organizational objectives should change as the organizational environment changes.

Those whose establish organizational objectives must recognize that environmental trend are then taken shape that will affect the future relevance of the objectives and odds of accomplishing them.

Managers should keep track of innovations in order to be aware of and react appropriately to any important environmental trends that may emerge.

Analyzing Environmental Trends

Profitability objectives are organizational targets that focus on the ability of an organization to earn revenue dollar beyond the expenses necessary to generate the revenue.

Profitability objectives established in organizations commonly include objectives related to return on investment, net profit margin, and return in stockholder’s equity.

Profitability Objectives

Net profit margin

Return on investment or return on sales

Return in stockholder’s equity

NET PROFIT

SALES

NET PROFIT

TOTAL ASSETS

NET PROFIT

STOCKHOLDER'S EQUITY

Guidelines For Establishing Profitability Objectives

PROFITABILITY OBJECTIVES HOW TO CALCULATE

Hierarch Of Objectives as set of organizational objectives that include for the organization as a whole and corresponding sub objectives for significant segments of the organization.

The purpose of establishing a Hierarch Of Objectives is to ensure that each significant segment of the organization knows what role it must play, on both a long- term and short- term basis, in order for the organization to reach its overall objectives.

Developing A Hierarch Of Objectives

Individual objectives are targets that specific people within an organization are attempting to reach, individual objectives are designed so that accomplishing each one contributes to the accomplishment of the broader objectives of the department.

The primary advantage of establishing individual objectives is that they help individual workers understand exactly what they are expected to contribute to the development.

Developing Individual Objectives