Organizational Goals

Organizational goals are strategically set objectives that outline expected results and guide
employees’ efforts. Organizational goals are defined as strategically designed objectives
towards which all activities of a business organization are targeted. It is simply the desired state
of affair that an organization want to reach by directing all its effort toward it. Organizational
goals can also be referred to as the destination of business that needs to be achieved shortly.
These goals give meaning or purpose to the organization and form the basis for deciding the
scope of future business activities. The goals of a business enterprise communicate to its
members about where their organization wishes to go so that they can accordingly plan their
activities on desired goal attainment in the future.
Types of Organizational Goals
Organizational goals are classified into distinct types on different bases. These bases are
defined along with their types in the points mentioned below:

Based on Organizational Nature

Every organization differs from one another in terms of the nature of business activities. They
have distinct goals that are explained as follows: –
a) Profit earning: Earning profit is a key goal of every business enterprise. It is needed for
bearing up expenses, market survival, and financing of growth and expansion of
business. A business making losses cannot continue for long in the market.

b) Service/welfare providing: Service organizations are one that provides social and
welfare services to communities at large. These organizations raise funds as donation
from public in offering services to specific clients. They also obtain government funds
for financing the welfare activities of the general people around them.

c) Preserving and promoting interest: Mutual benefit organizations are established and
carry out their activities for protecting as well as promoting the interest of members. A
group of people having common goals comes together, thereby forming an association
for serving their own needs.
Based on Organization
There are three types of goals categorized on the basis of organizational level.

a) Corporate or strategic goal: Strategic goals are goals set by top management of business
organization. The top managers decide strategic goals by considering the changes and
effect of organization. Strategic goals are long-term goals meant to be achieved within
five years or more period of time. These goals assist in formulating the vision and
 mission statement of a business enterprise. Vision describes the philosophy of business
and mission on another hand and specifies the reason behind organization existence.

Formulation of strategic goals, in short, require the following key features: Involvement of top
managers, deciding mission and vision statement, analysing the changes within environment
and finding out their effects, and deciding strategy and setting goals for minimum of five years.

b) Tactical goals: These goals are decided by managers at the middle level such as the
finance manager, marketing manager, production manager, and human resource
manager for their own respective departments. Tactical goals are also called
departmental goals as are specific to particular department within business
organization. The strategic goals serve as a basis for the formulation of tactical goals.
Therefore, in one or another manner, tactical goals support the achievement of strategic
goals due to their nature of focusing on operationalizing actions needed for tactical
goals accomplishment.
c) Operational goals: Goals set up by operational managers of a business organization are
defined as operational goals. The operational managers involve supervisors and unit
heads who take into account the tactical goals for formulating these goals. They are
used for deciding work targets on daily, weekly, monthly and quarterly basis.
Operational goals form the basis of preparing a work schedule, allotment of work, and
resources to individuals, groups, and teams.

Based on Time
Based on times, organizational goals are classified into long-term, medium-term and short-
term goals.

a) Long-term goals: Long-term goals are organizational goals meant to be achieved in the
long-run such as within a time span of five years or even more than that. These goals
define the vision, mission, and targets of a business enterprise. Managers at the top level
determine and formulate such goals along with strategies to attain them within the
required time with better efficiency.

b) Medium-term goals: Medium-term goals are goals decided by business for one year
and more. These goals are set-up by managers at middle level and are even classified
as departmental goals. The mid-term goals are specific to departments within an
organization like production, marketing, finance, and human resource management.

c) Short-term goals: Short-term goals are meant for a short period of time like for at most
a one-year period of time. The unit heads and supervisors formulate short-term goals
on the basis of mid-term goals.
Features of Organizational Goals
The goals, to be effective, should necessarily consist of the following important
features: –

Specific
Organizational goals should be clear, precise and well-understandable by all concerned
peoples. They should not be unclear, vague, and abstract as would otherwise lead to
difficulty in proper understanding. Proper understanding of goals among team members
helps in easy attainment within the specified period. For instance, goal of attaining 10%
return is quite clear, whereas goal of attaining higher return is unclear and vague.

Measurable
An effective goal is one that is measurable in quantitative terms such as time, cost,
quantity, standard quality level, distance etc. Measurable goals are easy to evaluate and
control thereby assisting in avoiding any deviations. These also help in the easy
assessment of the work-in-progress of people and organizations. For example, the goal
of getting 25% profit is easily measurable whereas, the goal of getting a higher level of
profit is non-measurable.

Time-Bound
The goals should be linked with time or in other words, must be bound by a time frame.
A clear estimation of time needs to be done for accomplishing the goals in the future.
Attaching factor of time-bound with goals helps in recognizing the necessities of
promptness and also acts as a standard for organizational activities. Like, a goal of
reaching 20% profit level in 3 years has well-specified period of time to achieve.

Acceptable
Organization goals must be acceptable to related parties who would be working on
achieving them. An active participation of both higher and lower management should
be their in goal setting-up process for reaching better understandability. Employees may
not perform in an efficient manner towards attaining the unacceptable goals. Suppose,
employer determines the goal of cost reduction that results in reducing employee’s
facilities, so here employee may not accept goal and do not go into implementation.

Realistic
Goals should be realistic in nature, suited to the ground the reality of the organization.
Availability of required resources need to be considered while formulating the
organizational goals. Setting up of unrealistic and unachievable goals only adds
expenses and may even leads to collapse of company.

Objectives of Organizational Goals

The objectives of organizational goals are summarized in points given below: –

Providing Guidance and Unified Direction

Promotion of Good Planning
Act as a Source of Employee Motivation
Offering an Effective Mechanism for Evaluation and Control
Providing Distinct Image and Identity