Company management is designed to perform complex functions, the most important which are setting goals, developing plans, policies, methods, strategies and tactics. While planning and setting goals is one of the most important functions of management, which determine the development of the company, the success of activities and directs the activities of the firm as a whole.
The process of planning begins with setting appropriate goals. Setting goals takes the theoretical part ( making the strategic vision and direction of the company) into practical application. Objectives are the specific results and outcomes to be achieved within a specified time. The experience of many companies and managers shows that the competition wins a company that makes concrete and measurable goals, and vigorously pursue their implementation. Effective for the company are the only objectives defined in quantitative or measurable indicators, and which contain specific values to be achieved. When setting goals it is necessary to specify who is responsible for achieving them, planed results and time limits. Bill Hewlett, cofounder of Hewlett-Packard, said: “You can not manage what you can not measure … but all that is measurable, can be achieved” (Needle 2010)
An example would be the company Motorola, which has put such financial goals:
- to provide annual revenue growth of 15% self-financed;
- to ensure the average rate of return on assets at a level of 13-15%;
- provide an average rate of return on equity at the level of 16-18%;
- to achieve excellent indicators of financial statements.
To achieve the desired financial position it is necessary to define strategic objectives, for example related to the increased competitiveness and improved market position and may be formulated:
- increased market share;
- competitive position in product quality, customer service, innovation, cost;
- improving the company’s reputation, etc.
Goals will be an important part of the process of strategic management only if top management formulates them correctly, then effectively institutionalizes, informs about them and encourage their implementation throughout the organization. Strategic management process will be successful to the extent to which top management participates in the formulation of objectives and to what extent these goals reflect the values of leadership and the realities of the company.
Andersen E. et al. (2009. Goal Directed Project Management: Effective Techniques and Strategies. Cogan Page
Curtis K. (1994). From Management Goal-Setting to Organizational Results: Transforming Strategies Into Action. Quorum Books
Needle D. (2010). Business in Context. Cengage Learning EMEA