Major factors in Formulating Strategic Objectives
Major factors in Formulating Strategic Objectives
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Mission of the organization-
The first factor when Formulating Strategic Objectives is the mission of the organization.
Formulating Strategic Objectives depends on the environment in which the organization operates i.e. the influence of external factors such as market conditions legislation, political and economic trends have an influence on the desired end result.
Formulating Strategic Objectives also depends on the values held by the management. Management values have an important influence on the formulation of target. They may value from ethical standards to the position held on social welfare.
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Management experience-
The management experience is also an important factor in Formulating Strategic Objectives. This relates to the management experience of a specific market.
The strong and weak points of the business is where the organization plans should not be made to expose the weak points of the business but instead exploit on the strength of the business. The cost of each alternative should be considered against the benefits offered.
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Benefits for the organization-
There are many benefits for the organization. They facilitate to channel employees throughout the organization toward common goals. This helps to focus and conserve valuable resources in the organization and to work jointly in a timelier manner. Challenging objectives can help to encourage workers throughout the organization to higher levels of commitment and effort. Meaningful objectives help to resolve conflicts when they arise. Appropriate objectives provide a standard for rewards and incentives.
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Policies-
Policies are the devices by which annual objectives will be attained. Policies include guidelines, rules, and procedures established to support efforts to achieve stated objectives. Policies are most often stated in terms of management, marketing, finance/accounting, production/operations, research and development, and computer information systems activities. Business policies are concerned with developing the general management point of view with demands that the manager sublimates his departmental, functional or specialist perspective in order to take balanced companywide look. The process of strategic planning encompasses the formation of specific polices. Policies help to ensure that all units of organization operate under the same ground rules. They also facilitate coordination and communication between various organizational units. Policies of competitors also influence organizational policies. According to Terry George, a business policy is an implied over all guide setting up boundaries that supply the general limits and directions in which managerial actions will take place (Satya Sekhar, 2009).
Effectiveness of Strategic Management
Alli (1992) stated following attributes of an effective strategic management:
- Clear direction and purpose
- Objectives, goals, and strategic consistency
- Continuous monitoring of internal and external (environment)
- Integration of operating budget and profit plans with strategic plan
- Continuous monitoring of progress with revision of plan and programs as appropriate
- Creation of strategic atmosphere that foresters a team spirit
- Commitment of necessary resources and the development of system to provide necessary management information.
Important links
- SWOT Analysis- Meaning, Use, Example
- Management Discussion & Analysis- Nature, Scope, Objectives
- PEST Analysis- Meaning, Analysis & Application
- TOWS Matrix- Rules, 4 Matrix Strategies & Limitations
- Strategy- Meaning, Features, Essence & Importance
- Strategy Management- Definition and Processes
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