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Strategic Objectives Formulation Guide

Learn about formulating objectives for a business, including types, hierarchy, factors influencing them, balanced scorecard approach, and setting specific, measurable, achievable, realistic, and time-bound goals.

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Strategic Objectives Formulation Guide

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  1. UNIT 9:FORMULATING OBJECTIVES

  2. A. What are they? • Statements of specific outcomes that are to be achieved • What the business wants to achieve • Long term objectives and short term objectives • Financial and non-financial objectives • Quantitative and non-quantitative objectives • Primary and secondary objectives

  3. Hierarchy of Objectives • Corporate objectives • Business objectives • Functional objectives • Personal objectives

  4. Factors Influencing Objectives • Age of the business • Size and legal status • Ownership (e.g. privately owned; stock exchange quoted) • Views of owners and managers • Market conditions • Legislation

  5. Factors Influencing Objectives (Contd.) • State of the economy • Competition • Risk and attitude to risk • Corporate culture • Political factors • Social attitudes

  6. B. Balanced Scorecard Approach • Formulate objectives in four key areas: • Financials-To succeed financially, how should we appear to our shareholders? • Customers- To achieve our vision, how should we appear to customers? • Internal Business Processes – In which business processes must we excel to excite customers and shareholders? • Learning and Growth- How will we sustain our ability to change and improve?

  7. C. Objectives need to be • Specific • Measurable • Achievable • Realistic (acceptable, motivating) • Time-bound

  8. D. Process • Objectives setting needs to be both a top-down and a bottom-up process. • Guidance to lower level managers and lower level units. • Support for organization wide objectives cascading process • Objectives are required all at levels of an organization

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