Organizational Goals: Definition and Formulation

Definition of Organizational Goals

An organizational goal is a desired point or destination toward which organizational activities are focused. It is the basis or reason for the existence of any organization. Goals provide direction to the organization so that all activities will be organized and controlled. A goal is the future destiny where the organization wants to reach. It is also the source of inspiration and motivation to all people associated with the organization.

In simple terms, organizational goals are the end results that an organization strives to achieve through its plans, strategies, and operations.

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Purposes of Organizational Goals

The main purposes of achieving organizational goals are:

1. To provide guideline and direction: A goal is a desired destination that the organization wants to reach. It provides the direction toward which all organizational activities should be focused.
2. To motivate employees: Goals serve as a source of inspiration and motivation for all members of the organization.
3. Basis for planning and control: Goals form the foundation for planning, and the control function measures progress toward these goals.
4. Coordination: Goals integrate individual activities toward a common purpose, helping in cooperation and coordination.

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Formulation of Organizational Goals

Organizational goals are formulated at different levels and in different time frames. The process of goal formulation follows a hierarchical approach, moving from broad, long-term goals at the top level to specific, short-term goals at the lower levels. This is often described as a Goal Hierarchy.

1. Mission

Mission is a statement that describes the vision of top leadership about the organization and provides the reason for the existence of the organization. It is the broadest and most fundamental goal, formulated by the Board of Directors and top-level management.

Example: "To be the best school in Kathmandu Valley" may be the mission statement of a school in Kathmandu.

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2. Strategic Goals

Strategic goals are long-term goals derived from the mission statement. They are formulated through strategic planning, which is a process of determining how to pursue the organization's long-term goals with the resources expected to be available. Strategic planning involves:

• Review of market conditions
• Assessment of customer needs
• Analysis of competitive strengths and weaknesses
• Evaluation of available resources leading to specific opportunities or threats

Strategic goals are formulated by top-level management and cover the entire organization.

Example: To expand the business into three new international markets within five years.

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3. Tactical Goals

Tactical goals are set to translate the strategic goals into action. They are the target goals of departments, formulated by department heads or middle-level managers. They are:

• Generally shorter in time frame
• More specific and strongly focused
• Aimed at achieving the broader strategic goals

Example: A 20% increase in sales annually.

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4. Operational Goals

Operational goals are unit or section level goals formulated by lower-level managers. They are more defined and time-bound, and they help to achieve the tactical goals. They deal with day-to-day operations of the organization.

Example: To produce 100 units of product each day.

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Summary Table of Goal Hierarchy

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Conclusion

Organizational goals are formulated in a top-down hierarchical manner, starting from the broad mission and strategic goals set by top management, moving through tactical goals set by middle management, and finally to specific operational goals set by lower-level managers. This structured formulation ensures that all levels of the organization work in a coordinated and focused manner toward the overall organizational purpose.

Delegation of Authority

Definition

Delegation of authority is one vital organizational process. Delegation means assigning of duty or task with necessary authority by a superior to subordinates. In other words, delegation is the transfer of authority to subordinates to enable them to make decisions and use resources effectively within the organization.

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Features of Delegation of Authority

i) Assigning Responsibility

• Delegation creates responsibility on the part of the receiver to perform the assigned duty.
• When a superior delegates a task, the subordinate becomes responsible for completing it properly and within the given timeframe.
• Responsibility cannot be fully delegated; the superior still remains ultimately responsible.

ii) Granting Authority

• Delegation grants sufficient authority to the subordinate to accomplish the given assignment.
• Without adequate authority, the subordinate cannot perform the delegated task effectively.
• The authority granted should match the level of responsibility assigned, ensuring the subordinate has the power to use resources and make necessary decisions.

iii) Creation of Accountability

• Accountability is a system making people answerable towards those who delegate them authority in the management hierarchy.
• Once authority is delegated and responsibility is accepted, the subordinate becomes accountable to the superior for the results.
• Unlike responsibility and authority, accountability flows upward in the hierarchy and cannot be delegated.

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Summary Table

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Note: These three features are interrelated and interdependent. Effective delegation requires a proper balance among responsibility, authority, and accountability to achieve organizational goals efficiently.

Globalization and Its Effects in Nepal

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Definition of Globalization

Globalization refers to the integration of economies and societies all over the world. It involves technological, economic, political, and cultural exchanges made possible largely by advancements in communication, transportation, and infrastructure. In simple words, globalization is the growing international interaction of markets for goods, services, and capitals.

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Effects of Globalization in Nepal

Globalization has brought both positive and negative effects on Nepal.

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A. Positive Effects

1. Creation of Demand for Goods and Services: Globalization has opened up international markets, which increases the demand for Nepali goods and services such as handicrafts, carpets, and agricultural products.

2. Parallel Growth of Economy: As Nepal integrates with the global economy, it benefits from the overall growth of international trade and investment, contributing to domestic economic development.

3. Transfer of Technology: Globalization enables Nepal to access modern technologies from developed countries, helping to improve productivity and efficiency in various sectors.

4. Employment Opportunities: Through outsourcing and foreign investment, globalization has created new employment opportunities for Nepali citizens both at home and abroad. For example, organizations from America, Europe, Asia, and the Gulf are recruiting Nepali employees.

5. Recognition: Nepal gains international recognition through global trade, tourism, and cultural exchange, which helps attract foreign investment and tourists.

6. Economic Advantages: Open market policies and privatization, encouraged by globalization, have helped improve Nepal's economic environment and attract foreign direct investment.

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B. Negative Effects

1. Exploitation of Resources: Multinational companies (MNCs) entering Nepal may exploit its natural and human resources, often sending profits back to their home countries rather than reinvesting locally.

2. High Price for Necessary Goods: Globalization can lead to increased prices for essential goods as domestic markets become linked to international price fluctuations, putting pressure on low-income groups.

3. Maximum Advantages Go to Rich Countries: The benefits of globalization are not equally distributed. Developed and richer countries tend to gain more advantages, while least developed countries like Nepal receive comparatively fewer benefits.

4. Threat to Indigenous Industries: The entry of large multinational companies and cheap imported goods (especially from India and China) poses a serious threat to Nepal's small and indigenous industries, which cannot compete on price or quality.

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Conclusion

In summary, globalization presents both opportunities and challenges for Nepal. While it brings technology, employment, and economic growth, it also threatens local industries and can lead to resource exploitation. Nepal must adopt balanced policies to maximize the benefits and minimize the negative impacts of globalization.