the koran “management’s job is not to see the company as it is... but as it can become.” john...

The Koran““Management’s job is Management’s job is

not to see the company not to see the company

as it is . . . but as it can as it is . . . but as it can

become.”become.”John W. Teets

Strategic objectives operationalize the mission statement. They provide guidance on how the organization can fulfill or move toward the organizational mission and vision

Strategic objectives are an organization’s performance targets-the results and outcomes it wants to achieve. They function as yardsticks for tracking an organization’s performance and progress

They help to channel employees throughout the organization toward common goals

Challenging objectives can help to motivate and inspire employees throughout the organization to higher levels of commitment and effort

They resolve conflicts when they arise Provide a yardstick for rewards and

incentives

Financial Strategic

Objectives

Nonfinancial Strategic

Objectives

Strategic Objective

s

Outcomes focusedon improving financial performance

Outcomes focused on improving long-term competitive business position

Financial Objectives Strategic Objectives

$

X % increase in annual revenues X % increase annually in after-tax profits X % increase annually in earnings per share Annual dividend increases of X % Profit margins of X % X % return on capital employed (ROCE) Increased shareholder value Strong bond and credit ratings Sufficient internal cash flows to fund 100% of new

capital investment Stable earnings during periods of recession

Winning an X % market share Achieving lower overall costs than rivals Overtaking key competitors on product performance or

quality or customer service Deriving X % of revenues from sale of new products

introduced in past 5 years Achieving technological leadership Having better product selection than rivals Strengthening company’s brand name appeal Having stronger national or global sales and distribution

capabilities than rivals Consistently getting new or improved products to market

ahead of rivals

Short-term objectives

Targets to be achieved soon

Milestones or stair steps for reaching long-range performance

Long-term objectives

Targets to be achieved within3 to 5 years

Prompt actions now that willpermit reaching targetedlong-range performance later

Profitability Productivity Competitive position Employee development Employee relations Technological leadership Public responsibility

•Specific: there must be at least one indicator (or yardstick) that measures progress against fulfilling the objective

•Measurable: this provides a clear message to what needs to be accomplished

•Appropriate: it must be consistent with the vision and mission of the organization.

•Realistic: it must be an achievable target given the organization’s capabilities and opportunities in the environment. In essence, it must be challenging but doable.

•Timely: there needs to be a time frame for accomplishment of the objective. After all, as the economist John Maynard Keynes once said, “in the long run, we are all dead

•Acceptable•Flexible•Measurable•Motivating•Suitable•Understandable •Achievable

Level 1

Level 2Business-LevelManagers

Level 3Functional Managers

Level 4Plant Managers,Lower-LevelSupervisors

CorporateLevel

Objectives

Corporate-wideStrategic

Vision

CorporateLevel

Strategy

BusinessLevel

Objectives

BusinessLevel Strategic

Vision

BusinessLevel

Strategies

FunctionalObjectives

Functional Missions

FunctionalStrategies

OperatingObjectives

OperatingMissions

OperatingStrategies

Corporate-Level Managers

GENERAL MOTORS

Strategic Goal and Objectives

GM OBJECTIVE 2003

Global Objectives In 2003, GM established a global energy use

reduction target of 10 percent and a global CO2 reduction target of 8 percent between 2000 and 2005 consistent with global goals for energy and water usage over this time period. The global energy use and CO2 targets have been met successfully.

GENERAL MOTORS GOAL (2007)

“ to take the lead in development and production of more fuel-efficient vehicles and the conversion to alternative power, such as electricity and hydrogen fuel cells, to power vehicles” , Larry Burns, vice president of research and development and strategic planning

GM’S GOAL

Fuel Efficiency, Zero Emissions

- Building Community Capital

- Engaging employees and Facilities

- Improving Education

- Generating Public Interest

GM Green Annual Report

GM GREEN PRODUCTS

To be one of the top three banking companies in terms of market share in all significant markets we serve

To achieve annual growth in earnings per share of 10% or better, on average

A return on stockholders’ equityof 20-25%

A return on capital employedof 27% or better

Have at least 30% of sales come from products introduced in the past four years

A company exhibits strategic intent when it relentlessly pursues an ambitious

strategic objective and concentrates its competitive actions and

energies on achieving that objective!

Nike’s strategic intent during the 1960s was to overtake Adidas (which connected nicely with Nike’s core purpose “to experience the emotion of competition, winning, and crushing competitors”).

When Yamaha overtook Honda in the motorcycle market, Honda responded with a warlike strategic intent: Yamaha wotsubusu “we will crush, squash, slaughter Yamaha”