CHAPTER 3 ESTABLISHING ORGANIZATIONA DIRECTION:MISSIO AND OBJECTIVS GROUP MEMBERS: Attia Sarwar Kausar Parveen Shukri Yusuf Amina Wazir Tauseef Ali Majid Ahmed Wajid khan Kamran sabir Submitted To: Humaira khan

Objectives are the target the INTRODUCTION Establishing organizational direction is the second step of strategic management process, so there are two main indicators of the direction in which an organization is moving to:- Mission is the purpose. for why reason an organization Organizational Direction Mission Objectives Objectives are the target the Organization has chosen

What is organizational Mission Organizational mission is the purpose for which or reason why, an organization exist. in general, a firm’s organizational mission contains such information as what types for products or services the organization produces. To develop an appropriate organizational mission, management should thoroughly analyze and consider information generated during the environmental analysis process.

WHY IS ORGANIZATIONAL MISSION IMPORTANT Establishing an organizational mission is an important part of management’s job, because the existence of a formally expressed organizational mission generally makes it more likely that the organization will succeed. Having an established and documented organizational mission accomplishes several important things.

What Information Appears In Mission Statement ? The kinds of information contained in mission statements very somewhat form organization to organization. Most mission statements seem to cover several major topics, these topics either within organization or contained materials that accompany it these may include: Company product or service Market Technology Public image Company objectives

The Nature Of Organizational Objectives This part outlines the role of organizational direction through the use of organizational objectives. Organizational objective is a target toward which the organization direct its efforts. The term objective should be used some suggest using either “objectives” or “goals”, so this term is used to refer to target that the organization is attempting to reach.

The Importance Of Organizational Objectives the importance of establishing appropriate objectives for an organization can not be overemphasized. Objectives provide the foundation for planning, organizing, motivating and controlling. Without objectives and their effective communication, behavior in organizations can stray in almost any direction.

Types Of Objectives In Organizations The organization have two different types of objectives, these are the following : Short run objectives: are targets that the organization is attempting to reach within one year or two years. Long run objectives: are targets that the organization is trying to reach within three to five years.

Areas In Which Organizational Objectives Are Established Most organizations have focused in one primary objective: making a profit. Its important that the firm’s objectives should be focused on several areas, so there are eight key areas in which organizational objectives should be set as: Market standing Innovation Productivity resource levels Profitability Manager performance and development Worker performance and attitude Social responsibility

Characteristics Of High- Quality Organizational Objectives Organizational objectives exist in some form in virtually all modern organizations, as well as high quality objectives, so these may include the following: Managers should develop organizational objectives that are specific. Managers should set organizational objectives that require a desirable level of effort. Managers should establish organizational objectives that are flexible. Managers should establish organizational objectives that are reachable. Managers should establish organizational objectives that are measurable. Managers should develop organizational objectives that are consistent in long run and short run.

The Process Of Establishing Organizational Direction The Process Of Establishing Organizational Direction are three major steps:- Reflecting on the results of an environmental analysis. Establishing an appropriate organizational mission. Establishing an appropriate organizational objectives.

Analyzing Environmental Trends Like organizational mission, organizational objectives should reflect the environment within which the organization operates. As indicated earlier organizational objectives should change as the organizational environment changes. Those whose establish organizational objectives must recognize that environmental trend are then taken shape that will affect the future relevance of the objectives and odds of accomplishing them. Managers should keep track of innovations in order to be aware of and react appropriately to any important environmental trends that may emerge.

Profitability Objectives Profitability objectives are organizational targets that focus on the ability of an organization to earn revenue dollar beyond the expenses necessary to generate the revenue. Profitability objectives established in organizations commonly include objectives related to return on investment, net profit margin, and return in stockholder’s equity.

Guidelines For Establishing Profitability Objectives HOW TO CALCULATE Net profit margin Return on investment or return on sales Return in stockholder’s equity NET PROFIT SALES TOTAL ASSETS STOCKHOLDER'S EQUITY

Developing A Hierarch Of Objectives Hierarch Of Objectives as set of organizational objectives that include for the organization as a whole and corresponding sub objectives for significant segments of the organization. The purpose of establishing a Hierarch Of Objectives is to ensure that each significant segment of the organization knows what role it must play, on both a long- term and short- term basis, in order for the organization to reach its overall objectives.

Developing Individual Objectives Individual objectives are targets that specific people within an organization are attempting to reach, individual objectives are designed so that accomplishing each one contributes to the accomplishment of the broader objectives of the department. The primary advantage of establishing individual objectives is that they help individual workers understand exactly what they are expected to contribute to the development.