Organizations are established and operated to achieve common goal. Goal may be termed as target and objective. There is difference between goal and purpose. Purpose generally determines the reasons for existence of an organization. Organizational goal refers to target point or end result that an organization attempts to realize in specific future time. Without organizational goal organizations may not have meaningful existence. Therefore goal setting is important and primary function of the organizations. In short, organizational goal is the future destination point or result which an organization attempts to achieve.
“Organizational goal may be defined as desired state of affairs that organizations attempt to realize.” – Amitai Etxioni
“Organizational goals are the objective that management seeks to achieve in pursuing the firm’s purpose.” – Moor head and Griffin
“Goal is desired future state of affairs.” – V.H. Vroom
“Organizational goals are broad aims which serve guides for action and as the starting point for more specific and detailed operating objectives at lower levels in the organization.”
Organizational goals, therefore are desired future state of affairs, the board aims, objectives, etc. that organizations set to achieve in future. Goals are the base of action because it provides guidelines for performing the activities. Goal can be used as a standard for evaluating performance. Organizations can determine their goal for achieving in long term, midterm and short. Properly determined goal may be helpful for formulating proper plans and policies. Different types of organizations can set goal to provide service. Similarly mutual benefit organizations may have goals of protecting rights of members and common weal organizations set goals to provide welfare to general public at large number.
Purpose of Organizational goals.
Here, purpose of organizational goal determine reasons for setting and existence of organizational goal. Some important purpose of organizational goals are,
1. Guidelines of action
Organizational goals provide guidelines for accomplishing tasks in future. Goals can be basis for performance evolution. More over organizational goal has purpose of providing guidance to direct to perform the activities.
2. Formulation of plan
Plan refers to road map of achieving the goals. Goals can be useful to formulate plans because goal is important basis of plan formulation. If there is specific and proper plan. Decision making and resource allocation may be done properly with the basis of proper goal.
3. Source of employee motivation
Employee motivation is one of the important factors for organizational success. Organizational goal play vital role to motivate employees. Specific acceptable, realistic and challenging goal may effectively motivate the capable and skilled employees. Employees motivation therefore, is another purpose of goal.
4. Evaluation and control
On the basis of organizational goal, we categorize an organization as business, service, commonweal or mutual benefit organization. Therefore goal provides distinct image and identity to the organizations.
Types of organizational goals
Organizational goals can be classified into various types on different bases. Some important bases and types are as below:
1. On the basis of nature of organization
There are various nature of organization in practice, different organizations have different goals that can be presented as below:
a) Profit earning
profit earning is important goal of business organization. Business that goes to losses can no longer exist. Profit is also needed for survival growth and expansion of business.
b) Service/welfare providing
service organizations raise funds as donation. They have goals of providing services to specific clients. Common weal organizations obtain funds from government. They set goal of providing welfare to general public at large number.
c) Protecting and promoting interest
mutual benefit organizations establish and operate their activities with the goal protecting and promoting member’s interest and needs.
The above are some major goals of particular types of organizations. The organizations have only single goal as above. They may have various and multiple goals. All the types of organizations may have goals of survival, growth and long run existence. Similarly, they need to improve efficiency, effective leadership and fulfillment of social responsibility.
2. On the basis of level of organization.
On the basis of level of organization, goal can be categorized as,
a) Strategic or corporate goal
strategic goal is related to top level management of an organization. Top level managers determine strategic/corporate goals by analyzing changes and effects of environment. Corporate goals are the goals that are determined to achieve within at least five years and more time period.
Formulation of vision and mission statements is important task for formulating strategic plan. Vision shows basic philosophy of organization and mission specifics reasons for existence of an organization. In short, formulation of strategic goal consists of following important features;
- Top manager’s involvement.
- Formulating vision and mission statements.
- Analyzing environmental changes and development and finding out the effects.
- Formulating strategy and setting goals for at least five years.
Top level managers should carefully analyze internal as well as external environment forces. Top management may involve in determine rate of return on investment research and development, product differentiation, organizational expansion, resource allocation, etc. on the words, for these things strategic or corporate goal is essential.
b) Tactical goals
tactical goals are formulated by middle level managers like production manager, finance manager, marketing manager and human resource manager for their respective departments. In other words, tactical goals are department’s goals. These goals are formulated on the basis of strategic goal. Therefore tactical goal supports strategic goal. Strategic goal focuses goal for at least one year and more.
c) Operational goal
operational goals are formulated by operational level managers like unit heads and supervisors. It is formulated on the basis of tactical goal. Operational goal sets target of daily, weekly, monthly, quarterly works. It works as basis for preparing working schedule and assigning works as well as resources to the groups, teams and individuals.
3. On the basis of time.
On the basis of time of achievement goals can be classified as below;
a) Long-term goal
long term goal specifics vision, mission, goal for five years or more and strategy. Top level managers set long term goal of an organization. Five years or more time of achieving goal is a long time period here.
b) Mid-term goal
mid-term goal is goal of one year or more. Middle level managers set mid-term goals. These are departmental goals. Production, finance, marketing, human resource management departments set mid-term goals.
c) short-term goal
short term goal is goal of at most one year time period. It is formulated by unit heads and supervisors. They formulated short term goal on the basis of mid-term goal.
Features of effective organizational goal
Effective goal refers to result oriented goal. Effective organizational goals require the following important features.
Goals should not be unclear, abstract or vague. There will be difficult to understand vague and abstract goal. Goal should be clear and specific. For examples, goal of getting higher return on investment is vague and unclear. Goal of getting 10% return on investment is specific and clear.
Goals should be measurable in quantitative term like cost, time, standard level of quality, quantity, distance, etc. measurable goal may be helpful for evaluation and control purpose. For example, goal of getting higher profit is not measurable but goal of getting 25% profit is measurable in terms of quantity (percentage).
Goals should be acceptable for the related parties. Especially it should be agreed by the employees who actually take part in implementation for achieving it. Employees may not honestly accomplish the task for achieving unacceptable goals. For sometimes, management may determine goal for cost reduction that can reduce employee’s facilities then, they don’t accept it to go into implementation.
Goals should be suited to the ground reality of organization. Goal should be formulated on the basis of available resources of organization. In order word’s goals should be achievable as much as possible. For examples, increasing 200% sales is not achievable but 15% is achievable.
Goals should be time linked. There should be specific time period of achieving goals. For examples, goal of increasing profit by 20% in 2 years has specific time period to achieve.