Question

Briefly, describe the nature and use of the following corporate planning tools:

Organizational objectives

Answer 1

Organizational objectives: These are the objectives set by the company's management to make a clear path of expected outcomes and guide employees efforts. These objectives are very helpful for the company to follow certain performance standards, achieve set goals of the company, provide constraints to unethical behavior. These objectives also define the plan for strategy of the firm.

The use of these objectives have been very important for the firm, as the firm needs to have a clear path and understanding about how to conduct the business and in what boundaries. If the objectives are clear and specific it will be easy for the management to clearly make the employees understand the company's objectives.

Setting goals can also help companies evaluate employee performance -- for example, creating individual employee goals that support overall organizational goals and measuring individual performance against those individual goals. This can be useful for the firm to define smart, achievable and specific targets for the employees. It also helps the firm in achieving what they are working for as all the employees are working for the same objectives.

There are two major types of organizational goals:

1. Official: Goals that an organization aims to achieve.
2. Operative: Goals that are required to achieve a desired outcome

Official goals detail a company's aims as described in its mission statement or in public statements, such as the corporate charter and annual reports. They help to build the organization's public image and reputation. Such goals are often qualitative and harder to measure.

Operative goals are the actual, concrete steps a business intends to take to achieve its purpose. A company's operative goals often don't parallel its official goals; for example, while a nonprofit volunteer organization's main official goal may be community service, limited funding might mean that its operative goal of fundraising will take precedence.

These are often short-term goals that organizations seek to achieve through its operating policies and undertakings and are measured quantitatively. Their success is based on metrics. Companies are able to outline specific steps they need to take to achieve operative goals.