What is the process by managers to identify and select appropriate goals and courses of action for an organization?

Importance of organizational goals

Goals help define a company's purpose, assist its business growth and achieve its financial objectives. Setting specific organizational goals can also help a company measure their organization's progress and determine the tasks that must be improved to meet those business goals.

Goals need to be specific, measurable, achievable and timely. By setting clear, realistic goals, organizations have a clearer path to achieve success and realize its vision. Goal setting, and attaining them, can also help an organization achieve increased efficiency, productivity and profitability.

Organizations should clearly communicate organizational goals to engage employees in their work and achieve the organization's desired ends. Having a clear idea of organizational goals helps employees determine their course of action to help the business achieve those goals. Employees should also be equipped with the proper tools and resources needed as they do their work to help meet the overall organizational goals.

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. While an organization can communicate its organizational goals through formal channels, the most effective and direct way to do so is through employees' direct supervisors. This enables managers to work with their staff to develop SMART (specific, measurable, achievable, realistic and time-bound) goals that align with the organization's goals. Setting organizational goals also helps build workplace harmony because it makes employees work toward attaining similar goals.

While developing sound goals helps organizations with planning, over time, goals might turn out to be unrealistic and need to be modified accordingly.

Types of organizational goals

There are two main 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.

Businesses also set operational goals to determine what business processes can help realize operative goals. They include specific, day-to-day operational tasks needed to run a business and that help drive scalability and business growth.

Key organizational goals can also include employee and management performance, productivity, profitability, innovation, market share and social responsibility goals.

Examples of organizational goals

Examples of effective organizational goals may include steps taken to cut down on the time taken to improve and process online orders for customers, keeping software up to date by applying security patches when needed or improving customer service interactions by streamlining call center productivity.

For example, if a company's official goal is to increase customer satisfaction by offering multichannel customer support, such as social media, mobile, live chat and email, its operative goal will be to craft a strategy for establishing, supporting and integrating customer support channels. The organizational goal -- supported by completing successful operative goals -- will be met when the company effectively captures all business process requests in a unified, central tool to provide effective multichannel support.