STRATEGIES IN ACTION
FMA42FC1 – BUS 403
CALAÑGIAN, EVA ISABEL
Long Term Objectives
Performance goals of an organization, intended to be achieved over a period of five years or more. Long-term objectives usually include specific improvements in the organization's competitive position, technology leadership, profitability, return on investment, employee relations and productivity, and corporate image.
The Nature of Long Term Objective
Objectives should be quantitative, measurable, realistic, understandable, challenging, hierarchical, obtainable, and congruent among organizational units. Objectives are commonly stated in terms such as growth in assets, growth in sales, profitability, market share, degree and nature of diversification, degree and nature of vertical integration, earnings per share, and social responsibility. Long-term objectives are needed at the corporate, divisional, and functional levels in an organization. They are an important measure of managerial performance.
Varying Performance Measures by Organizational Level
OrganizationalBasis for Annual Bonus Merit Pay
Corporate-75% based on long term objective
-25% based on annual objective
Division-50% based on long term objective
-50% based on annual objective
Function-25% based on long term objective
-75% based on annual objective
The Desired Characteristics of Objective
8.Congruent across department
The Benefits of Having Clear Objective
1.Provide direction by revealing expectations
3.Aid in evaluation by serving as standard
8.Aid in allocation of resources
9.Aid in design of jobs
10.Provide basis for consistent decision making
Two Types of Objective
Financial objectives include ones associated with growth in revenues, growth in earnings, higher dividends, larger profit margins, greater return on investment, higher earnings per share, a rising stock price, improved cash flow.
Strategic objectives include ones such as larger market share, quicker on-time delivery than rivals, quicker design-to-market times than rivals, lower costs than rivals, higher product quality than rivals, wider geographic coverage than rivals
Strategists should avoid the following alternative ways to "not managing by objectives."
• Managing by Extrapolation
• Managing by Crisis
• Managing by Subjective
• Managing by Hope
The balanced scorecard is a strategy evaluation and control technique that derives its name from the perceived need of firms to balance´ financial measures, which are oftentimes used exclusively in strategy evaluation and control with non-financial measures such as product quality and customer service.
A balanced scorecard for a firm is simply a listing of all key objectives to work towards along with an associated time dimension of when each objective is to be accomplished, as well as a primary responsibility or contact person, department, or division for each objective.
Types of Strategies
These are alternative strategies that an enterprise could pursue can be categorize into 11 actions: forward integration, backward integration, horizontal integration, market penetration, market development, product development, related...