VISION, MISSION AND OBJECTIVES OF BUSINESS

VISION, MISSION AND OBJECTIVES OF BUSINESS

*Shanmukha Rao. Padala  **Dr. N. V.S. Suryanarayana

INTRODUCTION:

            The leveraging of a firm’s internal resources, capabilities and core competencies to accomplish the firm’s vision, mission and objectives in a competitive environment is ‘Strategic Intent’. It is about winning competition battles and gaining leadership position by putting organizational resources to best use. When established effectively, a strategic intent can cause people to turn out excellent performance. Strategic intent is said to exist when  all employees and levels of a firm are committed to the pursuit of a specific but significant performance target. The intent can take the form of a broad vision or mission statement or a more focused route covering specific objectives and goals. In a way, thus, strategic intent tries to establish the parameters that shape the values, motives and actions of people throughout their organization.

            Based on the Strategic Intent is the organizations provide products and services for consumers, profits for investors, jobs for employees, taxes for governments, and economic stability for the communities. Strategic intent also identifies the commitment of the oraganisation to contribute to the welfare of society by setting standards on being economically productive and socially responsible. The goals identified through the strategic intent of the organization represent a synthesis and demands placed on the organization by its stakeholders these choices, collectively, set apart the organization from others.

            The most important characteristics of successful organizations are their clarity of purpose, adherence to their core values, their distinct identity and their vision of the organization. In practice there will always be limits on the range of possible choices. Small enterprises tend to be limited by their resources, whereas large enterprises may find their range of choice limited because it is difficult to change quickly and therefore, they tend to be constrained by their past. In the public sector, strategic choices may be made at a political level and the role of the manager may be limited to devising best to implement strategies rather than on fundamental choices of future direction. Wherever may be the limitations on choices, organizations have to co-exist in competitive markets by contributing to economic progress by creating new value to society, each organization doing so in its own way.

            Strategic analysis, strategic choice and strategy implementation are the three parts of the Strategic Management. Strategic choice is concerned with decisions about the organisation’s future and the way it needs to respond to the influences and impacts identified in strategic analysis. Choice becomes an idle exercise if the strategy is not properly implemented. These three divisions, therefore, form a closed loop in which the tail and the head are often indistinguishable.

            We will generally follow the conventional framework based on these divisions. However, for pedagogical simplicity, in this chapter, we will begin our foray into hard-core strategic management by discussing strategic intent- through strategic intent is considered to be a past of strategic choice. We will start with the vision, mission and objectives as well as value statements. These concepts are at the core of the strategy of managements. If different organizations do not have differences in their vision and goals, there is going to be significant difference between organizations.

THE HIERARCHY OF STRATEGIC INTENT:

            We will discuss these parameters as a hierarchy of strategic intent. The hierarchy of strategic intent includes the following elements.

• A broad vision of what the organization should be.
• The organization’s mission
• The strategic objectives  and specific goals to be pursued relentlessly
• The plans that are developed to accomplish the intentions of management in a concrete way.

The elements of the hierarchy specify the pious intentions, lofty ideals and clear-cut ideas that serve to unify the energy and forces scattered throughout an organization. They are beginning points for any formal planning process, but they also provide the sense of direction necessary to assure that incremental behaviour culminates in overall progress. Strategic intent is said to have expressed effectively when people believe fervently in their products and industry and when they are focused totally on their firm’s ability to outperform its competitors.

VISION:

            Aspirations, expressed as strategic intent, should lead to an end; otherwise they would just be castles in the air. That end is the vision of an organization or an individual. It is what the firm or a person would ultimately like to become. For instance, some of you, say in 10 years, or may be even earlier, would like to become general managers managing an SBU in a large, diversified multinational corporation. Or some others among you would like to believe that you will be an entrepreneur in 10-15 years owning your own company dealing with IT services and employing cutting-edge technology to serve a global clientele. A firm thinks like that too.

            Witness what Tata Steel sys about its vision: ‘Tata Steel enters the new millennium with the confidence of a learning, knowledge-based and happy organization. We will establish ourselves as a supplier of choice by delighting our customers with our service and our products. In the coming decade, we will become the most cost competitive steel plant and so serve the community and the nation’. A vision, therefore, articulates the position that a firm would like to attain in the distant future. Seen from this perspective, the vision encapsulates the basic strategic intent.

Understanding Vision:

            A vision is more dreamt of than it is articulated. This is the reason why it is difficult to say what vision an organization has. Sometimes it is not even evident to the entrepreneur who usually thinks of the vision. By its nature, it could be as hazy and vague as a dream that one experienced the previous night and is not recall perfectly in broad daylight. Yet it is a powerful motivator to action. And it is from the actions that a vision could often be derived. Henry Ford wished to democratize the automobile when the visualized that an affordable vehicle could be available for the masses. Walt Disney probably wanted to make people happy.

            Vision is what keeps the organization moving forward. Vision is the motivator in an organization. It needs to be meaningful with a long term perspective so that it can motivate people even when the organization is facing discouraging odds.

            The world over, backwards and forwards in history, just one thing has fired the imaginations of the people: a vision of future that promises to right today’s wrongs, a graphic image of a time when injustice, impoverishment will have disappeared. Moses used the vision of a land mark of milk and honey to motivate his people to set off for the promised land. Indian’s freedom fighters used the vision of a country free of its colonial rulers to wrest independence. In the corporate context, vision refers to an inspirational picture of a future that can be created, offering clarity amidst confusion, hope against despair, and unity of purpose amidst diversity of personal causes.

Defining Vision:

Vision has been defined in several different ways.

1. Kotter defines it as a “description of somethings (an organization, corporate culture, a business, a technology, an activity) in the future”.
2. El-Namaki considers it as a “mental perception of the kind of environment an individual, or an organization, aspires to create within a broad time horizon and the underlying conditions for the actualization of this perception”.
3. Miller and Dess view it simply as the “category of intentions that are broad, all inclusive, and forward thinking”.

The common strand of thought evident in these definitions and several others available in strategic management literature relates to ‘vision’ being future aspirations that lead to an inspiration to be the best in one’s field of activity.

CHARACTERISTICS OF VISION:

1. Vision is developed through sharing across an organization: Famous stories of successful vision involve visions that have been widely shared across entire organizations. Of course, an individual leader, often a founder has a powerful impact on the others.
2. Methods of convincing the others about vision: The leaders by working hard along with others convince the others in the organizations rather than simply by delivering speeches.
3. Change Agents: Leaders must recognize the complexity of changing an outmoded vision to reflect new realities. Organizations must redefine themselves through updated visions of the future through new objectives and strategies.

THE BENEFITS OF HAVING A VISION:

            Parikh and Neubauer point out that several benefits accruing to an organization having a vision. Here is what they say:

• Good visions are inspiring and exhilarating.
• Visions represent a discontinuity, a step function and a jump ahead so that the company knows what it is to be.
• Good visions help in the creation of a common identity and a shared sense of purpose.
• Good visions are competitive, original and unique. They make sense in the marketplace as they are practical.
• Good visions foster risk-taking and experimentation.
• Good visions foster long-term thinking.
• Good visions represent integrity, they are truly genuine and can be used for the benefit of people.

VISION STATEMENT:

            When you begin the process of strategic planning, visioning comes first. Martin Luther King, Jr. said, “I have a dream,” and what followed was a vision that changed a nation. That famous speech is a dramatic example of the power that can be generated by a compelling vision of the future. A vision is a guide to implementing strategy. Visions are about feelings, beliefs, emotions and pictures.

            A vision statement answers the question, “What will success look like?” The pursuit of this image of success is what motivates people to work together. It is an important requirement for building a strong foundation. When all the employees are committed to the firm’s visions and goals, optimum choices on business decisions are more likely.

            When visioning the change, ask yourself, “what is our preferred future?” Your vision must be encompassed by your beliefs.

• Your beliefs must meet your organizational goals as well as community goals.
• Your beliefs are a statement of your values.
• Your beliefs are a public/visible declaration of your expected outcomes.
• Your beliefs must be precise and practical.
• Your beliefs will guide the actions of all involved.
• Your beliefs reflect the knowledge, philosophy, and actions of all.
• Your beliefs are a key component of strategic planning.

The process and outcomes of visioning is to develop an effectivce basis for business strategy. The foresight of the organization is to fit the strengths of the organization with the demands, to make the organization highly competitive with growth and profits as the rewards. The long-term benefits are substantial, because Visioning:

• Break you out of boundary thinking.
• Provides continuity and avoids the stutter effect of planning fit and starts.
• Identifies direction and purpose.
• Alerts stakeholders to needed change.
• Promotes interest and commitment.
• Promotes laser-like focus.
• Encourages openness to unique and creative solutions.
• Encourages and builds confidence.
• Builds loyalty through involvement (ownership).
• Results in efficiency and productivity.

BUILDING A VISION:

            The vision statement should be build around certain core values. Thus, Sony’s vision rests on the values of encouraging individual creativity and its determination to be a pioneer. Such core values reflect how you want your future to look, the timeless principles to be followed while running the show- irrespective of what happens in and around the organization. Values, thus, are the essential glue of vision. Since a company’s different business may need to operate with different strategies, it’s their shared values that will prevent them from going in different directions. The vision statement should also spell out the core purpose of an organization very clearly. For example, we know that 3M’s purpose is to solve problems innovatively; Nike wants to provide the experience and emotion of competition – winning and crushing competitors; Blue Star wants to provide world class engineering products and services. Unstructured inputs could be taken from everyone developing the corporate vision. Companies like Larsen & Toubro, Crompton Greaves, Gujarat Heavy Chemicals typically follow certain steps in this regard:

1. Elicit ideas from employees as to how their dream organization should be like in terms of characteristics;
2. Combine these with the company’s core values and purpose to build the vision statement.

CREATING A SHARED VISION:

            Most managers, now-a-days, talk about a shared vision, meaning that individuals from across the organization have a common mental image and a mutually supported set of aspirations that serve to unite their efforts. People at all levels must share a common inspirational image that compels them to give their best and realize their own dreams. The vision once finalized, must be injected into the veins of the organization, being shared, owned and lived by every single person in the company.

MISSION:

            Organization, whether it is a business or a social organization, or university or government organization, takes resources from the environment and converts the resources into goods and/or services. It supplies the goods and services to the environment at an acceptable price. The organizations which make a net contribution to the society are called ‘legitimate.’ The organizations should protect this legitimacy over the long-run. Thus, every organization comes into being and exists to accomplish something in the larger environment, and that purpose or mission is clear that start. As time passes, technology, consumer preferences and other environmental factors change, the firm’s produces new products or renders new services and the interest of the management and employees change. This results in significant change in the firm. The original mission or purpose may become irrelevant in the long-run due to changes in internal environment of the organization and/or appropriate external environment. When these changes take place, management must search for new purpose or new state the mission or restate the original mission.

Understanding Mission:

            Organizations relate their existence to satisfying a particular need of the society. They do this in terms of their mission. Mission is a statement which defines the role that an organization plays in a society. It refers to the particular needs of that society for instance, its information needs. A book publisher and a magazine editor are both engaged in satisfying the information needs of society but they do it through different means. A book publisher may aim at producing excellent reading material while a magazine editor may strive to present news analysis in a balanced and unbiased manner. Both have different objectives but an identical mission.

Definitions:

            A mission was earlier considered as the scope of the business activities a firm pursues. The definition of mission has gradually expanded to represent a concept that embodies the purpose behind the existence of an organization.

Whether developing a new business or reformulating direction for an ongoing company, the basic goals, characteristics and philosophies that will shape a firm’s strategic posture must be determined. Thus, company mission will guide future executive action.

              Company mission can be defined as the fundamental, unique purpose that sets a business apart from other firms of its type and identifies the scope of its operations in product and market term. It embodies the business philosophy of strategic decision-makers; implies the image the company seeks to project; reflects the firm’s self-concept; indicates the principal product or service areas and primary customer needs the company will attempt to satisfy. In short, the mission describes the product, market and technological areas of emphasis for the business.

1. Thompson defines mission as the “essential purpose of the organization, concerning particularly why it is in existence, the nature of the business it is in, and the customers it seeks to serve and satisfy.”
2. Hunger and Wheelen say that mission is the “purpose or reason for the organization’s existence”.
3. According to John Pearce “mission is an enduring statement of purpose that distinguishes one firm from other similar firms”.

CHARACTERISTICS OF A MISSION:

            A mission statement incorporates the basic business purpose and the reason for its existence by rendering some valuable functions for the society. An effective mission statement should possess the following characterstics.

1. Feasible: The mission should be realistic and achievable. For instance, UTI declared its mission as “to encourage saving and investment habits among common man”. By providing tax relief under Sec 88c, the investment upto 1lakh in UTI is exampled from income tax. Hereby common man’s savings habit is encouraged by UTI.
2. Precise: A mission statement should not be narrow or too broad.
3. Clear: A mission statement should lead to action. BSNL’S mission of ‘connecting India’ leads it to a variety of service with varied tariff structure so as to cater to the preferences of mobile phone users.
4. Motivating: The mission should be motivating for the employees to be inspired for action. For example India Post’s mission is to expectations of the customer’ with dedication, devotion and enthusiasm. So customer service has become a value and it is inspiring and motivating the postal employees.
5. Distinctive: A mission statement will indicate the major components of the strategy to be adopted. The mission should be unique. When HCL defines its mission as ‘to be a world class competitor’ it creates a unique place in the minds of Indian personal computer users who across personal computers of MNCs on most of the occasions.
6. Indicates major components of strategy: “The mission statement of IOC emphasizes petroleum refining, marketing and transportation with international standards and modern technology. It indicates that IOC is going to adopt diversification strategy in future.

The mission provides direction to insiders and outsiders on what the firm stands for. It is the guiding star for any firm.

NEED FOR AN EXPLICIT MISSION:

            The mission contains few specific directives, only broadly outlines or implied objectives and strategies. It is a statement of attitude, outlook and orientation rather than of details and measurable targets.

            To ensure unanimity of purpose within the organisation;

• To provide a basis for motivating the use of the organisations resources;
• To develop a basis, or standard, for allocating organisational resources;
• To establish a general tone or organisational climate;
• To serve as a focal point for those who can identify with the organisation’s purpose and direction;
• To facilitate the translation of objectives and goals into a work structure involving the assignment of tasks; and
• To specify organisational purposes and the translation of these purposes into goals.

FORMULATING A MISSION:

            The process of defining the mission for a specific business can be understood by thinking about a firm at its inception. The sense of mission is usually based on several fundamental elements.

• Belief that the product or service can provide benefits at least equal to its price.
• Belief that the product or service can satisfy a customer need currently not met adequately for specific market segments.
• Belief that the technology to be used will provide a product that its cost and quality competitive.
• Belief that hard-work and the support of others, the business can grow and be profitable.
• Belief that the management philosophy of the business will result in a favorable public image.
• Belief that the entrepreneur’s self concept can be communicated and adopted by employees and shareholders.

 

MISSION STATEMENTS:

            Vision is the critical focal point and beginning to high performance. But obviously a vision alone won’t make it happen. Even the most exciting vision will remain only a dream unless it is followed up with striving, building, and improving.

            Why does the organization exist? What is its value addition? What’s its function? How does it want to be positioned in the market and minds of customers? What business it in? These are all questions of purpose. They deal with the deeper motivations and assumptions underlying the values and purpose and function.

• Your mission statement draws on your belief statements.
• Your mission statement must be orientated and portray your organization as it will be, as it will be, as if it already exists.
• Your mission statement must focus on one common purpose.
• Your mission statement must be specific to the organization, not generic.

The mission statements are the organization apart from others. They give meaning to the reason for being, value-add, and define the business of the organization. As with vision and values, the mission should have clear answer to the above questions. It should arouse a strong sense of organizational identity and business purpose. Through some of these questions often seem deceptively simple, they are not so simple. We need to answer them to prepare a mission statement. For example the question, “What business are we in?”. the implications of making a definitive identification means that the organization has put boundaries around to give guidance to the strategic direction in which it will move.

             The mission statement has direct implications on the diversification strategy of the organization. It provides directions on the strategic choice in diversification strategies. If the areas are to be related it puts limits on the options. The diversification options may be related in a number of different ways; the new products and services may have similar technologies, or may be serving similar markets, or may have similar competencies.

PREPARATION OF VISION AND MISSION STATEMENTS:

            In a competitive economy driven by the cruel logic of markets, a company with a determined management can transform an organization much more quickly and much more effectively than in the past. Clearly articulating your strategic intent is the key. Vision and Mission hold an organization together.

            Unfortunately, they don’t come neatly packaged in separate mental compartments. Instead, they are linked in people’s hearts and minds. Most people can relate to a personal vision, their personal values and their mission in life, but they often find it difficult to arrive at a consensus on issues concerning mission, values, and vision of the group.

            It’s important to recognize and respect diverse approaches to questions of ultimate purpose in a group. Ideally, the senior management team defines the broad parameters of what business we’re in and which direction were heading. They can prepare a rough vision for input and refinement or leave things wide open for the rest of the organization to fill in. group members then exchange ideas and make decisions to articulate the vision, mission, and values.

            Different ways of identifying a group’s vision, mission and values may seem foolish or even alarming but organizations are strongest when many aptitudes, interests, and points-of-view can worked out together. Teams or organizations need a shared vision, not something that only a few people own. Everyone should be a ‘stakeholder’ in spirit. That’s usually a cascading process, but it can start in any part of an organization.

            The vision and mission statements should provide clarity to the issues of governance. However, often are conflicts in perceptions. What organizations describe as ‘personality conflicts’, after a little exploration often reveals real differences on issues about governance, finances, purpose and program of the organization. There are many ways in which the vision statement can be prepared. It depends on the nature and type of organization as well as the philosophy and management style of the top management.

OBJECTIVES:

The accomplishment of purpose or mission of an organization requires the formulation of a number of objectives. Achievement of the organizational objectives, in turn, requires the formulation and fulfillment of departmental and unit goals. Long-range objectives specify the results that are desired in pursuing the organisation’s mission and normally extended beyond the current financial year of the organization. Lon-range objectives are notably speculative for distant years. short-range objective are performance targets, normally of less than one-year duration, that are used by management to achieve the organisation’s long-range objectives. The selections of short-range objectives are from an evaluation of priorities relating to long-range objectives. Departmental objectives, both long-range and short-range are formulated based on the respective long-range and short-range objectives of the organization. Unit objectives are generally specific and are draw from the departmental objectives.

            An objective indicates the result that the organization expects to achieve in the long run. It is an end result, the end point, something that you aim for and try to reach. It is a desired result towards which behaviour is directed in an organization. The organization may or may not reach the desired state, but the chances of doing so are greater if the objectives are framed and understood properly. Objectives are the products of specific concrete thinking. They commit persons and organizations to verifiable accomplishments. Again, objectives determine the scope of future events. They provide the spotlight on the routes over which activities are organized. They serve as reference points to concentrate resources and efforts. They determine what action to take today to obtain results tomorrow. Goals and targets are more precise and expressed in specific terms. In this section we will refer to only objectives assuming that these include the goals as well.

            They are stated in precisae terms as quantitatively as possible. The emphasis in goals is on measurement of progress toward the attainment of objectives. Goals have the following features they: 1. are derived from objectives, 2. offer a standard for measuring performance, 3. are expressed in concrete terms, 4. are time-bound and work-oriented.

FORMULATING OBJECTIVES:

            The mission and directional course are converted into designated performance outcomes in the process of formulating objectives. Objectives represent a managerial commitment to achieve specified results in a specified period, of time. The clearly spell out the quantity and quality of performance to be achieved, the time period, the process and the person who is responsible for the achievement of the objective.

            An organization’s mission statement will be just window-dressing, unless, it is translated into measurable and specific performance targets and managers are pressured to achieve these targets. Thus, objective formulation is a critical step in the strategic management process. It is viewed that, whose managers formulate objectives for each key result area and then actively pursue actions to achieve their performance targets will outperform the companies whose managers operate with hopes and more good intentions. Performance objectives must be stated in quantifiable or measurable terms. They must also contain a deadline for achievement.

CHARACTERISTICS OF OBJECTIVES:

Objectives have the following features:

1. Objectives Form a Hierarchy: In many organizations objectives are structured in a hierarchy of importance. There are objectives within objectives. They all require painstaking definitions and close analysis if they are to be useful separately and profitable as a whole. The hierarchy of objectives is a graded series in which an organisation’s goals are supported by each succeeding managerial level down to the level of the individual. The objectives of each unit contribute to the objectives of the next higher unit. Each operation has a simple objective which must fit in and add to the final objective. Hence no work should be undertaken unless it contributes to the overall goal.
2. Objectives Form a Network: Objectives interlock in a network fashion. They interrelated and inter-dependent. The concept of network of objectives implies that once objectives are established for every department and every individual in an organization, these subsidiary objectives should contribute to meet the objectives of the total organization. If the various objectives in an organization do not support one another, people may pursue goals that may be good for their own function but may be detrimental to the company as a whole. Managers have to trade off among the conflicting objectives and see that the components of the network fit one another. Because, as rightly pointed out by Koontz , “It is bad enough when goals do not support and interlock with one another. It may be catastrophic”.
3. Multiplicity of Objectives: Organisations pursue multifarious objectives. At every level in the hierarchy, goals are likely to be multiple. For example, the marketing division may have the objective of sale and distribution of produicts. This objective can be broken down into a group of objectives for the product, advertising, reach, promotion managers. The advertising manager’s goals may include: designing product messages carefully, create a favourable image of the product in the market, etc. Similarly goals can be set for other marketing managers. To describe a single, specific goal of an organization is to say very little about it. It turns out that there are several goals involved. This may be due to the fact that the enterprise has to meet internal as well as external challenges effectively. Internal problems may hover around profitability, survival, growth, an so on. External problems may be posed by government, society, stockholders, customers etc. In order to meet the conflicting from various internal and external groups, organizations generally pursue multiple objectives. Moreover, no single objective would place the organization on a path of prosperity and progress in the long run.
4. Long and Short-range Objectives: organizational objectives are usually related to time. Long-range objectives extending over five or more years are the ultimate or dream objectives for organization. They are abstractions of the entire hierarchy of objectives of the organization. For example, planning in India has got objectives like eradication of poverty, checking population growth through birth control etc. which reflect certain ‘ideals’ the government wishes to accomplish in the long run. Short-range objectives (one-year goals) and medium-range objectives (two to five year period goals), reflect immediate, attainable goals. The short-range and medium-range objectives are the means for achieving long-term goals and the long-term goals supply a framework within which the lower level goals are designed. Thus, all these goals reinforce each other in such a way that the total result is greater than the sum of the efforts taken individually. That is why goal setting is called a “synergistic process”. In order to remain viable, every organization needs to set goals in all three time periods.

AREAS OF OBJECTIVES:

            Objectives are set for all areas and departments of an organization. Through the objectives can vary widely from one organization to another organization, they can be broadly divided into: profitability, service to customers, employee needs and welfare, and social responsibility. The following are the areas of objectives.

1. Markets: Objectives are expressed in terms of the market or total rupee sales or total quantity of sales. For example, to increase freight traffic (commercial) to 85 % in 1997-98 and reduce the freight traffic (military) to 15% in 1997-98 from 60% and 40% respectively in 1996-97 financial year of Railways.
2. Productivity: The level of goods and/or services produced by an organization relative to the resources used in the production process, organizations those use fewer resources to produce specified levels of products are said to be more productive than organizations those require more resources to produce at the same level.
3. Innovation: Any change made to improve methods of conducting organizational business. Organizational objectives should indicate innovations the organization desires to implement.
4. Product: These objectives are expressed in terms of sales and profitability by product line or product, target dates for development of new products and others.
5. Profitability:  profitability objectives are expressed in terms of profits, return on investment, earning per share, profit to sales etc. For example, to increase return on investment by 10 % in 1997-98 over 1996-97 financial year.
6. Financial Resources: These objectives are expressed in terms of the capital structure, new issues of common stock, cash flow, working capital, dividend payments and collection periods.
7. Physical Facilities: These objectives are expressed in terms of machinery and equipment, square feet, fixed costs, units of production and other measures.
8. Organisation Structure and Activities: These objectives are stated in term of changes to be made in the policies of organization structure or projects to be undertaken.
9. Manager Performance and Development: these objectives are related to the quality and rate of development of managerial skills, knowledge and performance. Development of managerial performance is very important from the view point of the long-run success of the company and achievement of the other objectives of the company.

10.  Employee Performance and Attitude: These objectives are related to the development of skills, knowledge and performance of non-managerial employees of the company. This area is also related to the development of favourable attitude of the employees towards the organization. The significance of these considerations should be stressed through the formulation of organizational objectives.

11.  Customer Service: These objectives are related to the quality of the product, pre-sales and post-sales service, delivery times, promptly attending to the customer complaints, price, package and the like.

12.  Social Responsibility: These objectives are related to the obligation of business towards the society with a view to contribute to its welfare. Today, these objectives have become common to all the companies. For example, to contribute to the medical facilities of the community where the company is located.

IMPORTANCE OF OBJECTIVES:

            Why do organizations formulate objectives? And what is their importance? The following four factors explain the need for and importance of objectives.

1. Objectives help to define the organization in its environment: The organizations justify their existence to their stakeholders in the environment like customers, government, creditors and society at large.
2. Objectives help in coordinating decisions and decision-maker: Stated objectives impose some constraints on the employees and modify it towards the desirable direction. It coordinates decision-making process by different employees.
3. Objectives help in formulating strategies: Mission statements are translated into objectives and objectives are the basis for formulating strategies.
4. Objectives provide standards for assessing organizational performance: Objectives provide not only the direction to move to the organization but also provide the ultimate goals and targets that the organization is expected to achieve. These targets and goals become the standards to judge the organizational performance. Organizations, without clear objectives will not have basis for evaluating their performance or success.

SUMMARY:

            Strategic Intent is the leveraging of a firm’s internal resources, capabilities and core competencies to accomplish the firm’s vision, mission and objectives in a competitive environment. The corporate vision has the potential power to focus the collective energy of insiders and to give outsiders a better idea of what an organization really is. Vision is what keeps the organization moving forward. The vision statements present the values, philosophies and aspirations, the guide organizational action. Mission is an enduring statement of purpose that distinguishes one organization from other similar organization. Organization do exist to satisfy a particular need of the society or to fulfill a particular deficiency in the society. A mission statement is a declaration of an organization’s reason of being. Management must take into account three key elements in developing mission statements viz., history of the organization, organization’s distinctive competencies and the organization’s environment.

            The accomplishment of purpose or mission of an organization requires the formulation of objectives. These objectives are classified into overall organizational objectives, departmental objectives as well as unit level objectives. Based on the time objectives are classified into long-range objectives and short-range objectives. Long-range objectives are notably speculative for distant years. Short-range objectives are performance targets, normally of less than one-year’s duration. Objectives represent a managerial commitment to achieve specified results in a specified period of time.