Tuesday, February 16, 2010

Factors affecting objective formulation

Factors affecting objective formulation
Important factors affecting objective formulation are:
  1. Size of the organization :Bigger size makes that objective formulation process complex.
  2. Value system of top management :The objective formulation is affective by the value system of top management. Their philosophy,attitudes,aspiration and needs influence objective.
  • Philosophy reflects the creed of the organization.It specific basic beliefs,values,aspiration and philosophical priorities of managers.
3.Level of management :Organizational objectives are set by managers.Different levels of managers set different kinds of objectives.
  • Top level managers(board of director/general managers) :They are involved in determining vision,mission,strategy and overall objectives.
  • Middle level managers (SBU managers ):They are involved in setting key result area objectives for strategic business units.
  • Lower level managers (Functional heads):They are involved setting specific operational objectives for functions.
4. Organization culture :Culture is a system of shared set of values,beliefs and norms that guide behavior.
Organization culture is indicated by autonomy,mutuality of interests,climate of trust,feeling of belongings,team work,open communication,collaboration,performance based reward system risk taking and human focus.Objective formulation is affected by organizational culture.
5. Environment forces :External environment forces affect objective formulation.They ca be:
  • Political, such as government policies and regulation,lows.
  • Economics,such as competition in the market place an economics polices.
  • Social-cultural, such as population forces and social cultural values.
  • Technological,such as level of technology0gy and speed of technical change.
Internal environmental forces that affect objective formulation are resources availability,competency and power relationship within the organization.
6. Past situation :The objective formulation process is very much affective by situational variable.Objectives deffer according to situation.Situation keep on changing.So do objectives.Past situation of the organization serve as precedent for objective formulation.

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