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Strategies in Action

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Strategies in Action
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CHAPTER 5
STRATEGIES IN ACTION

FMA42FC1 – BUS 403

DAROY, KAREN
CALAÑGIAN, EVA ISABEL
SORIANO, JOCEL
VILLANUEVA, EDNALYN

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

Organizational Basis 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

1. Quantitative 2. Measurable 3. Realistic 4. Understandable 5. Challenging 6. Hierarchical 7. Obtainable 8. Congruent across department

The Benefits of Having Clear Objective

1. Provide direction by revealing expectations 2. Allows synergy 3. Aid in evaluation by serving as standard 4. Establish

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