Improving Shared Understanding of Concept of Strategy in Business Organizations
Organization Strategic Domain Models
A domain can be defined as "a specific sphere of activity or knowledge." The strategic domain of a business organization is determined by the key activities that characterize the business - "what the organization does, knowledge - how the organization does it, and the environment in which the organization conducts its activities. For example, in order to understand a business we need to know things like: scale, ownership, markets, stakeholders, activities, etc. It is only after knowing all these things that we can truly understand a business. These are called domains of a business.
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The domain concept is broad and abstract; the concept can be refined for particular situations to make it more tangible and concrete by splitting the concept into sub-domains. by considering the subdomain categories, such as: Core domains, Supporting subdomains, and generic subdomains.
All subdomains are essential to the overall solution regardless of the category in which they fall. The category determines how much effort is required, as well as the requirements of quality and completeness.
The domain defines problems that the strategy is going to solve; after all there is a reason why the strategy is being developed, in the first place. This problem space is concerned with and concentrates on what business problems we are trying to solve. The solution space (strategy) concentrates on how the problems in the problem space are going to be solved.
Organization Domain Languages/Models
To be able to develop a strategy for a domain you need a way of describing the domain. Having a relational data model or object model is not enough. You need to be able to describe things and their relations, and the dynamics such as events, processes, business invariant, how things change over time, etc. You need to be able to discuss and reason about the domain with the strategy development teams, and management. What you need is a domain language.
The domain models underlying "organization system", for example,may include:
These models provide better context and visual concepts to aid people in the organization in arriving at consistent interpretation of environment factors that influence organizational behavior and performance. This domain language has a nice feature; it tells you whether you are on the right track or not.
Domain Contests and Relationships
In organizations, there typically are many ways to solve a problem in the given problem space. The concept of Bounded Contexts is introduced to acknowledge this fact. A bounded context is a distinct part of the domain in which a particular subset or dialect is consistent at all times. There isn't a one-to-one mapping, necessarily, between bounded contexts and subdomains. Since a bounded context belongs to the solution space, and a subdomain to the problem space. Think of a bounded context, as one alternative solution among many possible solutions.
In organizations, viewed as systems, business processes may overlap or even conflict
A domain can be defined as "a specific sphere of activity or knowledge." The strategic domain of a business organization is determined by the key activities that characterize the business - "what the organization does, knowledge - how the organization does it, and the environment in which the organization conducts its activities. For example, in order to understand a business we need to know things like: scale, ownership, markets, stakeholders, activities, etc. It is only after knowing all these things that we can truly understand a business. These are called domains of a business.
[TBD]
The domain concept is broad and abstract; the concept can be refined for particular situations to make it more tangible and concrete by splitting the concept into sub-domains. by considering the subdomain categories, such as: Core domains, Supporting subdomains, and generic subdomains.
- Core Domain - A core domain makes an organization unique and different from others. For an organization to exist and succeed - survive, grow and thrive it has to be good in its core domain.
- Supporting subdomain - A supporting domain is a subdomain that is necessary for the organization to succeed.
- Generic subdomain - A generic subdomain is a subdomain that does not contain anything special to the organization but it still needed for the overall solution (strategy) to work.
All subdomains are essential to the overall solution regardless of the category in which they fall. The category determines how much effort is required, as well as the requirements of quality and completeness.
The domain defines problems that the strategy is going to solve; after all there is a reason why the strategy is being developed, in the first place. This problem space is concerned with and concentrates on what business problems we are trying to solve. The solution space (strategy) concentrates on how the problems in the problem space are going to be solved.
Organization Domain Languages/Models
To be able to develop a strategy for a domain you need a way of describing the domain. Having a relational data model or object model is not enough. You need to be able to describe things and their relations, and the dynamics such as events, processes, business invariant, how things change over time, etc. You need to be able to discuss and reason about the domain with the strategy development teams, and management. What you need is a domain language.
The domain models underlying "organization system", for example,may include:
- Creating a glossary of terms,
- Describe business processes using business process modeling techniques,
- Use UML to describe the relationships between things and state diagrams to describe how state changes as different things move through different processes,
- The subdomains are part of the domain language; you may need to define different language dialects for these subdomain.
These models provide better context and visual concepts to aid people in the organization in arriving at consistent interpretation of environment factors that influence organizational behavior and performance. This domain language has a nice feature; it tells you whether you are on the right track or not.
Domain Contests and Relationships
In organizations, there typically are many ways to solve a problem in the given problem space. The concept of Bounded Contexts is introduced to acknowledge this fact. A bounded context is a distinct part of the domain in which a particular subset or dialect is consistent at all times. There isn't a one-to-one mapping, necessarily, between bounded contexts and subdomains. Since a bounded context belongs to the solution space, and a subdomain to the problem space. Think of a bounded context, as one alternative solution among many possible solutions.
In organizations, viewed as systems, business processes may overlap or even conflict
Organization Structures
An organizational structure is a system that outlines how certain activities are directed in order to achieve the goals of an organization. Organization system structures may delineate reporting structure, business decomposition into functional and operating units, decision-making roles, and management structure. Organizations, from a systems perspective, are complexes of people and/or groups that according to commonly agreed rules and procedures strive to realize one or more preset objectives. An organization system management structure outlines how certain activities are directed in order to achieve the goals of an organization. The organizational structure also determines how information flows between levels within the company.
The Organization Structure Model provides a company with visual representation of how it is shaped, and how it can best achieve its goals. The structure should directly support the company's strategy. The structure describes what employees do, whom they respond to, and how decisions are made across the business.
Organization Structure Elements/Concepts
The organizational structures model artifacts include the following domain concepts:
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Organization Domain Relationships
The relations defines a network structure, it essentially depicts an organization as a network structure of organization units (logical structured actors) connected to its environment through a pattern of relationship types. These include a number of different dependency relations such as "value chain", "shared business function", etc.
The social system network comprising the organization and its environment can be represented through organization relationships including goal-dependency relationships:
Organization Attributes and Properties
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An organizational structure is a system that outlines how certain activities are directed in order to achieve the goals of an organization. Organization system structures may delineate reporting structure, business decomposition into functional and operating units, decision-making roles, and management structure. Organizations, from a systems perspective, are complexes of people and/or groups that according to commonly agreed rules and procedures strive to realize one or more preset objectives. An organization system management structure outlines how certain activities are directed in order to achieve the goals of an organization. The organizational structure also determines how information flows between levels within the company.
- Organization function structure - defines the decomposition of an organization into corporate, business and business functions components, and their arrangement in formulating, implementing and executing the organization's strategies.
- Organization position structure - The position structure(s) define(s) the management reporting structure, the employees reporting structure, the competences/skills required of individuals (people) that fill a position, and organizational capabilities.
- Organization value network model - The model defines a network structure; it essentially depicts an organization as a network structure of organization units connected to each other and to environment elements such as: suppliers, vendors, etc. - through a pattern of relationship types, including the "value chain" relations.
- Organization External Factors Influence model - The model defines a network structure; it essentially depicts an organization as a network structure of organization units (logical structured actors) connected to each other through a resource dependency relationship.
- Control Structure - Organizational control is part of the structure that defines and guides the strategy usage, set goals for the performance, and state corrective measures to be taken if performance goals are not met. Controls may be composed of responsibility centers (i.e., profit centers, cost centers, revenue centers, and investment centers), which help leaders allocate the resources for each activities.
The Organization Structure Model provides a company with visual representation of how it is shaped, and how it can best achieve its goals. The structure should directly support the company's strategy. The structure describes what employees do, whom they respond to, and how decisions are made across the business.
Organization Structure Elements/Concepts
The organizational structures model artifacts include the following domain concepts:
- Organization Unit - The organization structure model is comprised of component elements - organization units, and the relationships between these units. These Organization Units can represent Functional Units, Departments, Operating Units, etc. The Organization Structure model can be a decomposition model or network model.
- Organization Function - The Organizing function brings together physical, financial, and human resources and the productive relationships among them for achieving the goals established in the planning function. Leaders need to identify what activities are necessary, assign those activities to specific personnel, effectively delegating tasks. Leaders need to coordinate tasks to keep resources moving efficiently toward goals It is important to prioritize which resources are essential at any given time.
- Positions - The concept of position provides the abstraction enabling the definition of an individual as a logical social system in terms of their skills, competencies, experience levels and reporting relationships. Positions are social concepts employed by organizations for abstracting from specific human actors in the organization. Positions define how the organization aims at implementing its design through the specification of the behavior of particular individuals or group of individuals.
- External Environment Entity - The External Organization Entity model concept allows users to create External Organization Entities as model elements for external vendors, suppliers, and consultants. The external environment is denoted by an external environment entity model. The concept of Environment Entity is an abstraction that is used to define forthcoming developments (either inside or outside of the organization) which are likely to have important impact on the ability of the organization to meet its objectives. The Environment Entity is also an abstraction over the concept of strategic issue, and the concept of influencer in Business Motivational Modeling (BMM). The category of Environments Entities (Influencers) is large and inclusive. Every business has hundreds of potential Influencers. There will always be too many Influencers to model. The decision as to what Influencers to model is determined by the Influencers that impact the organization's strategies and tactics, and affect the achievement of goals and objectives of the organization.
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Organization Domain Relationships
The relations defines a network structure, it essentially depicts an organization as a network structure of organization units (logical structured actors) connected to its environment through a pattern of relationship types. These include a number of different dependency relations such as "value chain", "shared business function", etc.
- organization Functional Relationship Hierarchy - This is a hierarchical relationship and its constituent functions/units.
- Position (Structure) Hierarchy - The Position Structures are expressed through hierarchical reporting relationship between positions.
- Value Chain Relationship - [TBD]
- Shared Service Relationship - [TBD]
- Control Relationships - [TBD]
The social system network comprising the organization and its environment can be represented through organization relationships including goal-dependency relationships:
Organization Attributes and Properties
- Qualification - A qualification definition denotes a skill or knowledge possessed by a human resource. A human resource’s qualification typically comprises knowledge, education, training, or experience.
- Competency - A competency definition may specify the expected outcomes, skills, capability and proficiency, and knowledge expressed through qualifications required for a job position. The set of competencies for a position defines the capability requirements for a position to achieve a business outcome.
- Organization Capability - []
- Organization Policy - A policy is typically described as a principle or rule to guide decisions and achieve rational outcomes. The term is not normally used to denote what is actually done, this is normally referred to as either procedure or protocol.
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Organization Process Models
Business organizations process models define the key activities, resources, and products elements of the business model canvas. Organizational Processes enable business organizations to take a systemic approach to defining how work gets done in the organization as a whole in creating and delivering value to customers, and in support of the value creation processes.
Key Activities and Task Models
The Key Activities block in the Business Model Canvas establishes a bridge between the value proposition and the needs of the target market (customer segments). The categories of activities may include:
Both processes and tasks represent business activities that are performed in a business and/or organization. Processes are more complex than tasks, and are defined as sequence of activities that are linked by flows of control, data, and material. In contrast, tasks are atomic activities that cannot be decomposed into smaller actions.
Operational and administrative processes share several characteristics. The primary differences between the two lie in the nature of their outputs.
Business organizations process models define the key activities, resources, and products elements of the business model canvas. Organizational Processes enable business organizations to take a systemic approach to defining how work gets done in the organization as a whole in creating and delivering value to customers, and in support of the value creation processes.
Key Activities and Task Models
The Key Activities block in the Business Model Canvas establishes a bridge between the value proposition and the needs of the target market (customer segments). The categories of activities may include:
- Research and Development
- Marketing - []
- Sales and Customer Service
- Production
Both processes and tasks represent business activities that are performed in a business and/or organization. Processes are more complex than tasks, and are defined as sequence of activities that are linked by flows of control, data, and material. In contrast, tasks are atomic activities that cannot be decomposed into smaller actions.
- Work processes - These focus on accomplishments of tasks through linked chains of activities cutting across departments and functional groups. Work processes can be grouped into categories such as: operational and administrative processes/tasks. Examples of work processes include new product development, manufacturing, etc.
- Operational Processes - Processes that create, produce, and deliver value (products and services) that customers want. Typically, operational processes produce goods and services that external customers consume. Examples of operational processes include logistics and distribution process.
- Administrative Processes - Processes that are necessary for running the business and support the value chain processes. Administrative processes generate information and plans that internal groups use. Examples of administrative processes include resource planning, budgeting, and performance measurement.
Operational and administrative processes share several characteristics. The primary differences between the two lie in the nature of their outputs.
Business Processes Models
The process model view considers an organization as a whole (system) or any of its parts to be an activity network or a collection of processes. A process can refer to detailed workflow, such as billing a customer, or implementing an engineering change order, or to aggregate activities of new product development, or customer service.
Adopting a process view means that we visualize instances of work, called flow units (e.g., consulting engagements, hospital patients, barbershop patrons, hotel guests, or products/parts, service orders) flowing through a network of activities and buffers. The primary workflow is typically accomplished by an information flow to enable coordination of roles and the orchestration of activities. A BPMN Business Process Model that provides information about the activities performed, the routes taken, the rules impacting which routes and activities to perform, and the resources (human and machines) used to perform the activities.
BPMN Process Structure Concepts
The BPMN process model is an activity-based model. It provides key abstractions that capture and define the process structure - how activities, gateways, events, and sub-processes are connected by sequence flows. A BPMN Business Process Model is comprised of the following concepts:
Resource Assignment Policy
and the dynamic behavior of the architecture (how activity execution and control flow is coordinated, and work is managed and performed) to functionally define the execution view of business situations.
The process model view considers an organization as a whole (system) or any of its parts to be an activity network or a collection of processes. A process can refer to detailed workflow, such as billing a customer, or implementing an engineering change order, or to aggregate activities of new product development, or customer service.
Adopting a process view means that we visualize instances of work, called flow units (e.g., consulting engagements, hospital patients, barbershop patrons, hotel guests, or products/parts, service orders) flowing through a network of activities and buffers. The primary workflow is typically accomplished by an information flow to enable coordination of roles and the orchestration of activities. A BPMN Business Process Model that provides information about the activities performed, the routes taken, the rules impacting which routes and activities to perform, and the resources (human and machines) used to perform the activities.
BPMN Process Structure Concepts
The BPMN process model is an activity-based model. It provides key abstractions that capture and define the process structure - how activities, gateways, events, and sub-processes are connected by sequence flows. A BPMN Business Process Model is comprised of the following concepts:
- Activity - The activity definition includes the definition of roles representing the function/capability required by a resource to be able to perform the work.
- Roles - A role is an abstraction that specifies a proficiency expressed through a pattern of activities (tasks) that may be performed by an individual or group of individuals.
- Decision Points/Gates - These are flow control elements, and provide the mechanism to automate workflow decisions.
- Work Unit - This is the work item that flows through activities/tasks.
- Process Data - This is the information component of the work unit.
- Sequence Links - These are connections between activities, and activities and gates; they define the route taken by work items/units.
- Events - []
- Triggers - []
Resource Assignment Policy
and the dynamic behavior of the architecture (how activity execution and control flow is coordinated, and work is managed and performed) to functionally define the execution view of business situations.
Process Data and UML Data Modeling Editor
The UML based data modeling tool enables the creation of logical data model diagrams that define the concepts and ideas in organizational system domain such as products identify nd properties, services identity and properties, identity and properties of organizational physical assets such as equipment, machines, etc., and their capabilities. process variables (used in expressions such as flow control, conditions and branching decisions, etc.), process data flow, and process input and output data.
Expression Builder & Editor
DMM Studio supports a number of different expression builders such as for process control flow and branching decisions expressions, policy expressions builder for defining resource selection policy models, and activity assignment policy expressions for assignment policy model.
The UML based data modeling tool enables the creation of logical data model diagrams that define the concepts and ideas in organizational system domain such as products identify nd properties, services identity and properties, identity and properties of organizational physical assets such as equipment, machines, etc., and their capabilities. process variables (used in expressions such as flow control, conditions and branching decisions, etc.), process data flow, and process input and output data.
Expression Builder & Editor
DMM Studio supports a number of different expression builders such as for process control flow and branching decisions expressions, policy expressions builder for defining resource selection policy models, and activity assignment policy expressions for assignment policy model.
Organizational System Goals
Organizational goals are long-term goals that an organization's leadership team establishes to outline expected future outcomes toward which present efforts are directed. These goals not only drive the organization as a whole, but also guide employees' efforts towards achieving the company's vision. Organization goals may be classified into the following categories: "official" goals, and Operative goals. Official goals are what the organization would like to achieve, while Operative goals are what the organization needs to achieve to become successful.
Official Goals
Official goals define the company's aims and purpose; they are the formally stated goals of an organization and are described in its public statements such as: corporate charter, mission statements, and annual reports, and and communicate the general purpose of the organization. The purpose of official goals is to help build the organization's image and reputation; such goals are usually qualitative.
Operative Goals
Operative goals are statements of the desired outcomes of the actual concrete steps/actions a business intends to take to achieve its vision and purpose. They are the outcomes the organization actually seeks to attain through its operating activities. Operative goals are quantitative and are measurable; they may be defined and detailed in the strategic plan as strategic goals. Operative goals can be categorized as:
An organization goal is a statement of desired future an organization wishes to achieve. Organizational goals describe what the organization is trying to accomplish strategically, tactically and operationally. Goals that are strategic make broad statements of where the organization wishes to be at some future point; tactical goals define specific medium-term results for functional units within the organization, and operational goals define short-term results from day-to-day operations processes.
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Mission Goals - The mission statement is a general statement on how you will achieve your vision. The mission goals are statements of what needs to be accomplished to implement the mission and values. Some examples may include: enhance staff expertise, increase brand awareness, improve customer service.
Corporate goals - These are statements of what needs to be accomplished to implement the corporate strategy. Corporate goals set expectations for employees, investors, and customers. Corporate goals typically include customer loyalty, profit, growth, leadership and commitment to employees, customers and the community.
Business Goals - These are statements of what needs to be accomplished to implement the business strategy. Business goals.
Strategic Goals - A strategic goal is the objective you want to achieve at the end of your three to five year strategic plan. These goals are broader then your yearly objectives, but shorter than long-term goals like mission and vision statements. The difference between strategic goals and strategic objectives is subjective.
Tactical Goals - Tactical goals are targets that are established quickly in response to real world conditions as they occur. Where strategy is based on predictions about the future, tactics are based on current realities.
Operational Goals - Operational goals are time bound business objectives or key performance indicators (KPI) companies use to stay on track, and function on a day-to-day basis. Business owners and managers flesh out strategic and business goals with these short-term goals so people know what they must achieve in a more immediate time frame.
Goals help improve your overall effectiveness as a company.
Organizational Objectives
Objectives are statements of future conditions, that a manager hopes to achieve. Effective planning requires measurement of objectives. Organizational objectives may include the following:
All sets of objectives have three characteristics: priority, timing, and measurement. The phrase priority of objectives implies that at a given time, accomplishing one objective is more important than accomplishing others. Time dimensions imply that an organization's activities are guide by different objectives, depending on the duration of the action being planned.
A variety of measurements exists to quantify objectives in the eight areas that management expert Peter Drucker suggests: market standing, innovations, productivity, physical and financial resources, profitability, manager performance and responsibility, worker performance and attitude, social responsibility.
Organizational goals are long-term goals that an organization's leadership team establishes to outline expected future outcomes toward which present efforts are directed. These goals not only drive the organization as a whole, but also guide employees' efforts towards achieving the company's vision. Organization goals may be classified into the following categories: "official" goals, and Operative goals. Official goals are what the organization would like to achieve, while Operative goals are what the organization needs to achieve to become successful.
Official Goals
Official goals define the company's aims and purpose; they are the formally stated goals of an organization and are described in its public statements such as: corporate charter, mission statements, and annual reports, and and communicate the general purpose of the organization. The purpose of official goals is to help build the organization's image and reputation; such goals are usually qualitative.
Operative Goals
Operative goals are statements of the desired outcomes of the actual concrete steps/actions a business intends to take to achieve its vision and purpose. They are the outcomes the organization actually seeks to attain through its operating activities. Operative goals are quantitative and are measurable; they may be defined and detailed in the strategic plan as strategic goals. Operative goals can be categorized as:
- Strategic Goals - These are broad long-term goals set by the leadership team/executive management. Some common types of operative goals include overall performance (e.g., profitability, growth, amount of services delivered); resource (e.g., obtain financing, research grants, hire minorities); market (e.g., increase market share by x%); employee development; innovation (e.g., develop new products).
- Tactical Goals - These are elaborations of the Organizational Operative Goals, and they outline a capability to be acquired in measurable terms, while including precise behavior to be accomplished and a specific criterion defined by the objective for measuring performance.
- Operational Goals - Operational goals are specific to the daily tasks and requirements to run a business. Operational goals define the outcomes of positions (job roles) in the organization needed to achieve Operative goals. A job role operational goal is to build processes that are easily replicated. Replicating makes it possible to hire and scale a business quickly. For example, a window washing company can set the operational goal to create a daily process for each employee that makes them efficient. Efficient operations make it easy for employees to function and to excel within their work environment. Operations ensure that products and service make it to market through predefined daily tasks.
An organization goal is a statement of desired future an organization wishes to achieve. Organizational goals describe what the organization is trying to accomplish strategically, tactically and operationally. Goals that are strategic make broad statements of where the organization wishes to be at some future point; tactical goals define specific medium-term results for functional units within the organization, and operational goals define short-term results from day-to-day operations processes.
[TBD]
Mission Goals - The mission statement is a general statement on how you will achieve your vision. The mission goals are statements of what needs to be accomplished to implement the mission and values. Some examples may include: enhance staff expertise, increase brand awareness, improve customer service.
Corporate goals - These are statements of what needs to be accomplished to implement the corporate strategy. Corporate goals set expectations for employees, investors, and customers. Corporate goals typically include customer loyalty, profit, growth, leadership and commitment to employees, customers and the community.
Business Goals - These are statements of what needs to be accomplished to implement the business strategy. Business goals.
Strategic Goals - A strategic goal is the objective you want to achieve at the end of your three to five year strategic plan. These goals are broader then your yearly objectives, but shorter than long-term goals like mission and vision statements. The difference between strategic goals and strategic objectives is subjective.
Tactical Goals - Tactical goals are targets that are established quickly in response to real world conditions as they occur. Where strategy is based on predictions about the future, tactics are based on current realities.
Operational Goals - Operational goals are time bound business objectives or key performance indicators (KPI) companies use to stay on track, and function on a day-to-day basis. Business owners and managers flesh out strategic and business goals with these short-term goals so people know what they must achieve in a more immediate time frame.
Goals help improve your overall effectiveness as a company.
Organizational Objectives
Objectives are statements of future conditions, that a manager hopes to achieve. Effective planning requires measurement of objectives. Organizational objectives may include the following:
- Mission Objectives - These are specific actions and timelines for achieving the mission goals.
- Corporate objectives - These are specific actions and timelines for achieving the corporate goals. Examples include: maximizing shareholder wealth, increasing market share, expanding current product lines, improving employee retention, etc.
- Business objectives - Business objectives are the specific, measurable results that companies hole to maintain as their business grows. Examples include: profit earnings, market share (or creation of customers), innovation & Utilization of resources, and increasing productivity.
- Strategic Objectives - Strategic objectives (strategic priorities, pillars, or planks) are purpose statements that create overall vision and set goals and measurable steps/actions for an organization to help achieve a desired outcome. A strategic objective is most effective when it is quantifiable either by statistical results or observable data. Strategic objectives may be of the following types: process objectives, behavior or outcomes based. Ideally, strategic objectives should be broad, 3 to 5 year, statements that address the core functional areas of your organization. A balanced Scorecard perspective may be used to guide decisions and make ensure your plan is focused on the core aspects of your business.
All sets of objectives have three characteristics: priority, timing, and measurement. The phrase priority of objectives implies that at a given time, accomplishing one objective is more important than accomplishing others. Time dimensions imply that an organization's activities are guide by different objectives, depending on the duration of the action being planned.
A variety of measurements exists to quantify objectives in the eight areas that management expert Peter Drucker suggests: market standing, innovations, productivity, physical and financial resources, profitability, manager performance and responsibility, worker performance and attitude, social responsibility.
Organization Strategy Model
The concept of strategy can be viewed as a particular form of social activity. The scope of strategy can be understood in terms of Art Likke's model: Ends, Ways, and Means; where the ends are the objectives, the ways are the courses of action, and the means are available resources. The means are used in certain ways to achieve the desired ends. Strategy is simply the ways. The Ends, Ways, and Means components of a strategy may be understood as individual elements, but the essence of strategy is the interaction of these elements into a coherent, cohesive whole (a system). In a conceptual sense, strategy is a system of (strategic) decision-making whose outcomes are more than the sum of its parts. Good strategy involves an astute courses of actions (ways) in where the impact of the means are magnified. Poor strategy subtracts from the available means; it destroys the strengths you have.
Strategy in business organizations can be modeled as a system of strategic decision-making process, the results of which is a system of decisions or options/choices. Strategic decisions, in business context, are choices made that take into consideration the business organization's mission and its strategic objectives. There are various times and situations in business when it is important for a company to use strategic decision-making (strategy). These situations/instances may include:
The decision and resulting actions taken considers the whole environment in which the organization operates and the company's resources. Strategic decision-making - strategy - gives you a structure to guide your tactical and operational decisions necessary to realize (implement and execute) your strategy.
Strategy Domain Language
The domain language for organ organizational business strategy analysis and design includes concepts organized around the levels in an organization where strategy exists; such as: executive management level, business level management, middle management level, and line management level.
The executive management level strategy can be defined by the following corporate strategy model:
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Business Competitive Strategy Model
Business strategy can be defined in terms of the following strategy scope elements:
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Operations Strategy
Operations strategy refers to the system an organization implements to achieve its long-term goals and accomplish its mission. It involves decisions based on multiple factors, including product management, supply chain, inventory, forecasting, scheduling, quality, facilities planning and management. For service providers, operations strategy concerns financing, marketing, human resources, and service that matches the company's performance goals and mission.
Operations strategy as a strategic decision-making process requires multiple factors be taken into consideration with respect to each other. In a a product-oriented business structure these may include: procurement of raw materials to the final logistics involved with delivering the product to end-user. As well as factors such as staff, product development, quality assurance, and issues of plant capacity and forecasting models that focus on strategic objectives. An effective operations strategy fosters the alignment of people, processes, and products with the company's mission to ensure long-term sustainable growth.
Operations Strategy Model
Strategic Options/Choices
Strategic options are goal-oriented alternatives that an organization has towards the uncertain external environment. It is not only the choice but also the obligation of the management to choose the best possible alternative from the options. Strategic choices are decisions taken in accordance with the organization's mission and vision, and influenced by elements such as judgment, bargaining, and analysis. Strategic choices have influence over the years and decades, and even beyond the lifetime of the project that implements that choice.
Strategic choices are the result of the strategic decision-making process. Strategic decision-making is the process of charting a course based on long-term goals and a longer term vision. It involves selecting the best or most appropriate strategy from the stock of alternatives that serves the company's objectives conducting a SWOT analysis to examine the strengths and weaknesses of the organization, and determining opportunities that can be exploited. Strategic decision-making should be done in context with the organization, its mission, needs, resources, vision, and other similar considerations. Then evaluate each of the options; each will have its own advantages as well as disadvantages. This involves a lot of brainstorming and making tough decisions and choices. After evaluation, select one or multiple options based on the organization's needs and circumstances. Also, the management needs to decide how these options will place to use and practice. Some of the key techniques for the generation of strategic options include: Using the Ansoff Matrix, Using Porter' Generic Strategies, Using BCG Analysis, and Using SWOT Analysis. The decision-making process is continuous, and the management should continue looking for better options even when it has chosen one.
Usually, strategic choices selected for implementation are expressed as high-level statements that resonate with the board, and executive level management. Ensure the strategic choices are sound and described in statements that clearly communicate what top management wants and expects. The statements should be expressed in terms that middle-level and line management would understand; such as the products and services to offer and in which markets; what resources, capabilities, and competencies are needed to support these products and services; how to acquire or build these resources.
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the means of achieving the results defined by the strategic goals for that layer.
Strategic goals define outcomes the organization wants to achieve to better meet the organization's mission. Ideally, each strategy represents a single, distinct approach to achieving all or part of the corporate/business strategic goal.
Strategy is the pattern of choices on how the organization is going to position itself to gain sustainable competitive advantage over ts rivals to achieve its goals and objectives. The Strategy conceptual model provides the means to capture the relevant aspects of the world on which it is necessary to provide information.
Strategy content model makes up the strategy knowledge body of an organization. It describes how the organization means to act and at best even motivates why. In most cases, it is developed collaboratively by a team of experts with different background, particularly to allow for greater variety of perspectives on the domain under observation or to establish coordination between distinct units of the organization.
The strategy content knowledge model captures the outputs of the strategy development (formulation and implementation) processes. It is comprised of the following concepts and properties.
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Models relate the functional and non-functional aspects of the organizational changes and capacity development to the organization's purpose and intentions of the various stakeholders. The strategy ontology describes the basis for deriving the concepts and properties (uppercase) to structure and constitute the strategy content in a Strategy Knowledge Model.
[TBD]
Creating integrated goal models of corporate, business and operations strategy layered model, collectively define the logical model of the organization's strategic direction and intent in terms of the outcomes, achievements, or goals a business wishes to achieve over a specific time-frame.. A logic model of the strategy provides an explicit visual representation of it's constituent elements and their relationships to each other, and to the intended and desired outcomes to be achieved.
The Strategy Formulation Logic Model is a visual representation, a road map, which shows the logical relationships among the various elements of a layered model of the concept of strategy.
[TBD]
Organizing (Implementation) Model
A plan specifies a set of goals and objectives that need to be achieved to successfully satisfy the intended goals of the plan. The goals of the plan are assigned to functional areas (that define key organizational capabilities) or departments and then cascaded to the resources in key capability areas for implementation and execution. The cascade within a particular capability area terminates when the organization unit that abstracts that area reaches individual or team of individual resources that fill the relevant positions in the organization unit. The cascading process is based on goal refinement techniques. The goal refinement network model that represents the cascaded goals can be elaborated by associating with each cascaded goal element assigned to a position filled by resources responsible for employing the means to be employed in accomplishing actions/tasks/activities to achieve the specified goals and objectives. Goal refinement and elaboration decisions are critical and decisive in the planning process as alternative actor assignments define alternative system proposals. A prioritized implementation time schedule and budgets can be generated from the planning model.
Policy Statements
The key to organization success is its ability to identify the important needs of each of the following groups (customers, employees, shareholders, etc.) to establish some balance among them, and work out a set of operating policies which permits their satisfaction. This set of policies, as a pattern, identifies what the organization is trying to become. A policy states how goals are to be attained. It tells people what they should and should not do in order to contribute to achievement of corporate goals.
Benefits
The explicit visual model of strategy makes the concept easy to grasp, and enables the organization to work out a shared understanding of the strategy. This helps managers clarify their thoughts and build consensus on the company's strategy; ensuring strategy determination does not degenerate into solemn recording of platitudes, useless for building consensus. The visual model also satisfies the needs of employees and stakeholders that cooperate to keep the organization alive and successful.
The concept of strategy can be viewed as a particular form of social activity. The scope of strategy can be understood in terms of Art Likke's model: Ends, Ways, and Means; where the ends are the objectives, the ways are the courses of action, and the means are available resources. The means are used in certain ways to achieve the desired ends. Strategy is simply the ways. The Ends, Ways, and Means components of a strategy may be understood as individual elements, but the essence of strategy is the interaction of these elements into a coherent, cohesive whole (a system). In a conceptual sense, strategy is a system of (strategic) decision-making whose outcomes are more than the sum of its parts. Good strategy involves an astute courses of actions (ways) in where the impact of the means are magnified. Poor strategy subtracts from the available means; it destroys the strengths you have.
Strategy in business organizations can be modeled as a system of strategic decision-making process, the results of which is a system of decisions or options/choices. Strategic decisions, in business context, are choices made that take into consideration the business organization's mission and its strategic objectives. There are various times and situations in business when it is important for a company to use strategic decision-making (strategy). These situations/instances may include:
- when deciding whether to enter/exit an existing market,
- when introducing a new product or service to their offering,
- when withdrawing or discontinuing an existing product r service,
- whether to target a new or existing customer segment.
The decision and resulting actions taken considers the whole environment in which the organization operates and the company's resources. Strategic decision-making - strategy - gives you a structure to guide your tactical and operational decisions necessary to realize (implement and execute) your strategy.
Strategy Domain Language
The domain language for organ organizational business strategy analysis and design includes concepts organized around the levels in an organization where strategy exists; such as: executive management level, business level management, middle management level, and line management level.
The executive management level strategy can be defined by the following corporate strategy model:
- Objective(s) - Strategic objectives are the big-picture goals for the company: they describe what the company will do to try to fulfill its mission. Having strategic objectives in place allows a company to measure its progress. Clearly communicating these objectives to personnel ensures that everyone is focused on the highest-priority tasks and is operating under the same assumptions about the company's future.
- Courses of Actions - These are the different ways the organizations can use its available resources (means) to achieve the corporate objectives. These include: Parenting Strategies, Portfolio Management Strategies, and Grand Strategies.
- Means - Resources and organizational capabilities required to execute those strategies - courses of actions.
- Enabling Environment - This is the broad external environment in which the organization exists and operates. It is comprised of a number of factors/systems such as Political, Social/Society, Economic, Environmental, Technology, and Legal factors/systems. The enabling environment factors can influence and impact the operation of a business organization, and is the source of opportunities as well as threats. This external environment is analyzed with respect to the organization's vision, mission, and values to assess opportunities that may be exploited and threats that have to be mitigated with appropriate mitigation strategies.
[TBD]
Business Competitive Strategy Model
Business strategy can be defined in terms of the following strategy scope elements:
- Objective(s) - Strategic objectives are the big-picture goals for the business unit: they describe what the business unit will do to try to fulfill the organization's mission. Having strategic objectives in place allows a business unit to measure its progress. Clearly communicating these objectives to personnel ensures that everyone is focused on the highest-priority tasks and is operating under the same assumptions about the company's future.
- Courses of Action(s) - These are the different ways the business unit can use its available means (resources) to create value and competitive advantage in order to achieve its business goals. Value is created by employing assets such as products/services, customers, brand, etc. Competitive advantage refers to factors that allow a company to produce goods or services better or more cheaply than its rivals. Competitive advantage is created through competitive strategies. These factors allow an organization to generate more sales or superior margins compared to its market rivals. Businesses and consumers purchase one product instead of another when the products are similar, because customers believe that one of the products has a difference (value) they want/need. The difference could be a cost (a lower price), better warranty, or more status. It could be that the product is healthier, more environmentally friendly, more reliable, or some other benefit.
- Means - Resources and organizational capabilities required to execute those strategies - courses of actions. Some examples of distinctive competencies are: Superior technology and/or product features; Better manufacturing technology and skills; Superior sales and distribution capabilities; Better customer service and Convenience.
- Enabling Environment - This is the broad environment in which business units operate; it includes industry, markets, and geographies. This is the enabling environment that sets the scope for capacity development.
[TBD]
Operations Strategy
Operations strategy refers to the system an organization implements to achieve its long-term goals and accomplish its mission. It involves decisions based on multiple factors, including product management, supply chain, inventory, forecasting, scheduling, quality, facilities planning and management. For service providers, operations strategy concerns financing, marketing, human resources, and service that matches the company's performance goals and mission.
Operations strategy as a strategic decision-making process requires multiple factors be taken into consideration with respect to each other. In a a product-oriented business structure these may include: procurement of raw materials to the final logistics involved with delivering the product to end-user. As well as factors such as staff, product development, quality assurance, and issues of plant capacity and forecasting models that focus on strategic objectives. An effective operations strategy fosters the alignment of people, processes, and products with the company's mission to ensure long-term sustainable growth.
Operations Strategy Model
- Objective(s) - Strategic objectives are the big-picture goals for the company: they describe what the company will do to try to fulfill its mission. Having strategic objectives in place allows a company to measure its progress. Clearly communicating these objectives to personnel ensures that everyone is focused on the highest-priority tasks and is operating under the same assumptions about the company's future.
- Courses of Actions - These are the different ways the organizations can use its available means (resources) to achieve the corporate objectives. These include: Corporate strategies, core competency strategies, competitive strategies, product and service strategies, customer-driven strategies, etc.
- Means - Resources and organizational capabilities required to execute those strategies - courses of actions.
- Enabling Environment - The concept of enabling environment is an all inclusive concept that involves all outside factors and influences that impact the operation of a business, and is the source of opportunities as well as threats. The external environment is analyzed with respect to the organization's vision, mission, and values to assess opportunities that may be exploited and threats.
Strategic Options/Choices
Strategic options are goal-oriented alternatives that an organization has towards the uncertain external environment. It is not only the choice but also the obligation of the management to choose the best possible alternative from the options. Strategic choices are decisions taken in accordance with the organization's mission and vision, and influenced by elements such as judgment, bargaining, and analysis. Strategic choices have influence over the years and decades, and even beyond the lifetime of the project that implements that choice.
Strategic choices are the result of the strategic decision-making process. Strategic decision-making is the process of charting a course based on long-term goals and a longer term vision. It involves selecting the best or most appropriate strategy from the stock of alternatives that serves the company's objectives conducting a SWOT analysis to examine the strengths and weaknesses of the organization, and determining opportunities that can be exploited. Strategic decision-making should be done in context with the organization, its mission, needs, resources, vision, and other similar considerations. Then evaluate each of the options; each will have its own advantages as well as disadvantages. This involves a lot of brainstorming and making tough decisions and choices. After evaluation, select one or multiple options based on the organization's needs and circumstances. Also, the management needs to decide how these options will place to use and practice. Some of the key techniques for the generation of strategic options include: Using the Ansoff Matrix, Using Porter' Generic Strategies, Using BCG Analysis, and Using SWOT Analysis. The decision-making process is continuous, and the management should continue looking for better options even when it has chosen one.
Usually, strategic choices selected for implementation are expressed as high-level statements that resonate with the board, and executive level management. Ensure the strategic choices are sound and described in statements that clearly communicate what top management wants and expects. The statements should be expressed in terms that middle-level and line management would understand; such as the products and services to offer and in which markets; what resources, capabilities, and competencies are needed to support these products and services; how to acquire or build these resources.
[TBD]
- Which industry or industries should the company compete in?
- What should be the geographical scope of operations - national, international, or global?
- Should we diversify our business, and if yes, at what level?
- How should the company be organized in terms of: product development, marketing, production, sales, customer service, and distribution? Which of these have to be in-house and which are going to be outsourced?
- Should the company enter into alliances or make acquisitions?
- Objective(s) - Strategic objectives are the big-picture goals for the company: they describe what the company will do to try to fulfill its mission. Having strategic objectives in place allows a company to measure its progress. Clearly communicating these objectives to personnel ensures that everyone is focused on the highest-priority tasks and is operating under the same assumptions about the company's future.
- Courses of Actions - These are the different ways the organizations can use its available resources (means) to achieve the corporate objectives. These include: Parenting Strategies, Portfolio Management Strategies, and Grand Strategies.
- Means - Resources and organizational capabilities required to execute those strategies - courses of actions.
- Enabling Environment - This is the broad external environment in which the organization exists and operates. It is comprised of a number of factors/systems such as Political, Social/Society, Economic, Environmental, Technology, and Legal factors/systems. The enabling environment factors can influence and impact the operation of a business organization, and is the source of opportunities as well as threats. This external environment is analyzed with respect to the organization's vision, mission, and values to assess opportunities that may be exploited and threats that have to be mitigated with appropriate mitigation strategies.
the means of achieving the results defined by the strategic goals for that layer.
Strategic goals define outcomes the organization wants to achieve to better meet the organization's mission. Ideally, each strategy represents a single, distinct approach to achieving all or part of the corporate/business strategic goal.
Strategy is the pattern of choices on how the organization is going to position itself to gain sustainable competitive advantage over ts rivals to achieve its goals and objectives. The Strategy conceptual model provides the means to capture the relevant aspects of the world on which it is necessary to provide information.
Strategy content model makes up the strategy knowledge body of an organization. It describes how the organization means to act and at best even motivates why. In most cases, it is developed collaboratively by a team of experts with different background, particularly to allow for greater variety of perspectives on the domain under observation or to establish coordination between distinct units of the organization.
The strategy content knowledge model captures the outputs of the strategy development (formulation and implementation) processes. It is comprised of the following concepts and properties.
- Strategic Goals and Objectives - The attainment of each goal may require a number of objectives to be reached.
- Ways/Courses of Action - [TBD]
- Means/Resources - Represents a resource (or capability) that the unit may deploy.
- Outcomes - The intended and desired outcomes are represented as goals. A goal is a broad/general statement about intended state of the world we want to bring about.
- Environmental Factors - External factors create conditions that may affect performance of a strategy without apparent exertion of tangible force or direct exercise of command. The category of external factors and effect on the organization's performance is large and inclusive. Every business has hundreds of potential factors that impact performance. There will always be too many factors to model. The decision as to what factors are relevant and need to be included in the environment model is determined by strategic management based on the assumed impact on the organization's mission or mandate and if its strategic relevance.
[TBD]
- Goal - Describes a future state that the unit aims to achieve. It has an optional Objective property which could be used to quantify the Goal. Goals can be decomposed into sub-goals based on AND-OR Refinement. The goals model of the organization's strategy is a layered model of a hierarchy of goals at each layer/level with strategic goals at the top; tactical goals, created and cascaded beginning from the strategic goals to functional areas/departments, it the next layer; and operational goals in the bottom layer. The model allows the organization to capture the goals resulting from the goal setting process such as the company level goals, and the set of goals created and cascaded beginning from the company goals to departments and organization units that support the organization top level goals. The operational goals capture process and individual employee goals created to support department and unit level goals.
- Strategy - Describes a course of action to channel Goal achievement. A strategy may support at least one and at most three (3) Goals. This constraint was introduced to help enforce the focus on less but more specific strategies. The strategy implementation details can be further specified using its Implementation Details property. Strategies - decisive actions - are developed for each corporate/business strategy goal in terms of "action goals" which abstracts over the specific means employed. Ideally, each strategy represents a single, distinct approach to achieving all or part of the corporate/business strategy goal. Like goals, strategies are directional. For example, a strategy for the "Raise Revenue" goal might be to "Bring in more customers." While goals and strategies are directional, objectives are specific, measurable actions that establish how the goals will be achieved. Outcomes create meanings, relationships, and differences: the Why. The attainment of each goal may require a number of objectives to be reached. A corporate or business strategy is defined in terms of the goal statements that represent the desired/expected outcomes.
- Resource - Represents a resource (or capability) that the unit may deploy. Actors represent the perspectives and objectives of the individuals (human resources) responsible and accountable for establishing the vision and direction of the organization, formulating and implementing the organization's design and strategy, and executing the implemented strategy, resulting in creating and delivering value to customers to increase customer satisfaction and stakeholders' value.
- Strategic Goal Dependency Relationship - The relationship is defined by the link between a goal model and actors, and express the expectations of each of the actors (parties) to the relationship. The actors in a social system are connected by strategic goal dependency relationships to form a social network. The goal models are linked to the actors and they express the expectations of each of these actors with respect to strategic performance.
Models relate the functional and non-functional aspects of the organizational changes and capacity development to the organization's purpose and intentions of the various stakeholders. The strategy ontology describes the basis for deriving the concepts and properties (uppercase) to structure and constitute the strategy content in a Strategy Knowledge Model.
[TBD]
Creating integrated goal models of corporate, business and operations strategy layered model, collectively define the logical model of the organization's strategic direction and intent in terms of the outcomes, achievements, or goals a business wishes to achieve over a specific time-frame.. A logic model of the strategy provides an explicit visual representation of it's constituent elements and their relationships to each other, and to the intended and desired outcomes to be achieved.
The Strategy Formulation Logic Model is a visual representation, a road map, which shows the logical relationships among the various elements of a layered model of the concept of strategy.
[TBD]
Organizing (Implementation) Model
A plan specifies a set of goals and objectives that need to be achieved to successfully satisfy the intended goals of the plan. The goals of the plan are assigned to functional areas (that define key organizational capabilities) or departments and then cascaded to the resources in key capability areas for implementation and execution. The cascade within a particular capability area terminates when the organization unit that abstracts that area reaches individual or team of individual resources that fill the relevant positions in the organization unit. The cascading process is based on goal refinement techniques. The goal refinement network model that represents the cascaded goals can be elaborated by associating with each cascaded goal element assigned to a position filled by resources responsible for employing the means to be employed in accomplishing actions/tasks/activities to achieve the specified goals and objectives. Goal refinement and elaboration decisions are critical and decisive in the planning process as alternative actor assignments define alternative system proposals. A prioritized implementation time schedule and budgets can be generated from the planning model.
Policy Statements
The key to organization success is its ability to identify the important needs of each of the following groups (customers, employees, shareholders, etc.) to establish some balance among them, and work out a set of operating policies which permits their satisfaction. This set of policies, as a pattern, identifies what the organization is trying to become. A policy states how goals are to be attained. It tells people what they should and should not do in order to contribute to achievement of corporate goals.
Benefits
The explicit visual model of strategy makes the concept easy to grasp, and enables the organization to work out a shared understanding of the strategy. This helps managers clarify their thoughts and build consensus on the company's strategy; ensuring strategy determination does not degenerate into solemn recording of platitudes, useless for building consensus. The visual model also satisfies the needs of employees and stakeholders that cooperate to keep the organization alive and successful.
- Objective(s) - Strategic objectives are the big-picture goals for the company: they describe what the company will do to try to fulfill its mission. Having strategic objectives in place allows a company to measure its progress. Clearly communicating these objectives to personnel ensures that everyone is focused on the highest-priority tasks and is operating under the same assumptions about the company's future.
- Courses of Actions - These are the different ways the organizations can use its available resources (means) to achieve the corporate objectives. These include: Parenting Strategies, Portfolio Management Strategies, and Grand Strategies.
- Means - Resources and organizational capabilities required to execute those strategies - courses of actions.
- Enabling Environment - This is the broad external environment in which the organization exists and operates. It is comprised of a number of factors/systems such as Political, Social/Society, Economic, Environmental, Technology, and Legal factors/systems. The enabling environment factors can influence and impact the operation of a business organization, and is the source of opportunities as well as threats. This external environment is analyzed with respect to the organization's vision, mission, and values to assess opportunities that may be exploited and threats that have to be mitigated with appropriate mitigation strategies.
Organizational Controls
[TBD]
The management process as a decision-making process can be modeled as goals models. Goals and objectives are critical and effective component of the management process that enable effective orchestration of the four management functions - planning, organizing, leading and controlling activities. Broadly, within the P-O-L-C framework, goals and objectives serve to (1) gauge and report performance, (2) Improve performance, (3) align effort, and (4) manage accountability.
Goals and objectives provide the foundation for modeling at the top management level, business goals and functional area goals and performance measurement goals. The role of goals and objectives does not stop in the planning stage; if goals and objectives are to be achieved and actually improve the competitive position of the firm then the organizing, leading and controlling stages must address goals and objectives as well.
Goals are typically outcome statements, while objectives are very precise, time-based, and measurable actions that support the completion of goals.
Corporate level goals are indications of what the organization as a whole is trying to achieve (mission) and to become (vision). In stating what the organization hopes to achieve, it is necessary to state what it hopes to do with respect to its environment - external "systems" such as markets, industry, the economy, the community, and other social systems. In each case there are unique relationships to observe (e.g., with competitors, municipal leaders, congress, etc.). In stating what the organization hopes to become, it is essential to view this in abstract terms as the satisfaction of the needs of significant groups which cooperate to ensure the organization's continued existence. These groups may include customers, managers, employees, stockholders, etc. Goals and objectives are an essential element in planning and are key referent points in many aspects of organizing, leading, and controlling.
Role of Goals in Planning
Goal models of planning capture the management's intentions, expectations, and assumptions underlying key management decisions and choices, and judgments. The planning goals model is an intentional goals model that define a hierarchy of goals denoting the organization's vision, mission, values, and strategies. For goals and objectives to be achieved and actually improve the competitive position of the organization, the organizing, leading, and controlling stages must address goals as well.
The key element of setting goals is the ability to see them in terms of more than a single dimension. Both money and product policy are part of a statement of objectives; but it is essential that these be viewed as concrete expressions of a more abstract set of goals - the satisfaction of the needs of significant groups which cooperate to ensure the company's continued existence.
Role of Goals in Organizing
Once planning goals are set, organizing the resources (human resources and other resources) that are identified in the plan, is necessary to reach the planned goals.. The organization structure is established and the goals and objectives defined in the plan are cascaded over the structure. For instance, a functional organization structure, with functional areas such as marketing, finance, human resource, etc., have goals and objectives, that if measured and tracked, help show if and how those functions are contributing to the organization's goals and objectives. Similarly, product and service areas will likely have goals and objectives. Goals and objectives can also be set for the way functions interact with product or service areas. For instance, are the finance, marketing, and human resource functions interacting in a way that is productive? Similarly, is marketing function delivering value to product or service initiatives.
Organizing Goals Model - The organizing goal model is expressed as a goal hierarchy rooted in the vision and mission of the organization with cascaded goals that define elaborations of high level abstract vision, mission, and business goals down to more concrete goals at the functional/tactical and operations levels. The hierarchical relations between the goals hierarchy/tree are based on AND-OR (exclusive, and SOME) goal-dependency relations.
Role of Goals in Leading
In terms of leadership, it is usually top managers that set goals and objectives for the entire organization. Lower-level managers such as function and line managers have input into the goals and objectives relevant to their respective areas of the organization. For example, a CEO might believe that the organization can achieve a sales growth goal of 20% per year. With this organizational goal, the marketing manager can then set specific product sales goals, as well as pricing, volume, and other objectives through out the year that show how marketing is on track to deliver its part of the organization's sales growth. Goal setting is a primary task of leadership, along with holding others accountable for their respective goals and objectives.
Role of Goals in Control
Goals and objectives can provide a form of control since they create a feedback opportunity regarding how well or how poorly the organization is executing its strategy. Goals and objectives are also a basis for reward systems, and can align interests and accountability within and across business units.
[TBD]
The management process as a decision-making process can be modeled as goals models. Goals and objectives are critical and effective component of the management process that enable effective orchestration of the four management functions - planning, organizing, leading and controlling activities. Broadly, within the P-O-L-C framework, goals and objectives serve to (1) gauge and report performance, (2) Improve performance, (3) align effort, and (4) manage accountability.
Goals and objectives provide the foundation for modeling at the top management level, business goals and functional area goals and performance measurement goals. The role of goals and objectives does not stop in the planning stage; if goals and objectives are to be achieved and actually improve the competitive position of the firm then the organizing, leading and controlling stages must address goals and objectives as well.
Goals are typically outcome statements, while objectives are very precise, time-based, and measurable actions that support the completion of goals.
Corporate level goals are indications of what the organization as a whole is trying to achieve (mission) and to become (vision). In stating what the organization hopes to achieve, it is necessary to state what it hopes to do with respect to its environment - external "systems" such as markets, industry, the economy, the community, and other social systems. In each case there are unique relationships to observe (e.g., with competitors, municipal leaders, congress, etc.). In stating what the organization hopes to become, it is essential to view this in abstract terms as the satisfaction of the needs of significant groups which cooperate to ensure the organization's continued existence. These groups may include customers, managers, employees, stockholders, etc. Goals and objectives are an essential element in planning and are key referent points in many aspects of organizing, leading, and controlling.
Role of Goals in Planning
Goal models of planning capture the management's intentions, expectations, and assumptions underlying key management decisions and choices, and judgments. The planning goals model is an intentional goals model that define a hierarchy of goals denoting the organization's vision, mission, values, and strategies. For goals and objectives to be achieved and actually improve the competitive position of the organization, the organizing, leading, and controlling stages must address goals as well.
The key element of setting goals is the ability to see them in terms of more than a single dimension. Both money and product policy are part of a statement of objectives; but it is essential that these be viewed as concrete expressions of a more abstract set of goals - the satisfaction of the needs of significant groups which cooperate to ensure the company's continued existence.
Role of Goals in Organizing
Once planning goals are set, organizing the resources (human resources and other resources) that are identified in the plan, is necessary to reach the planned goals.. The organization structure is established and the goals and objectives defined in the plan are cascaded over the structure. For instance, a functional organization structure, with functional areas such as marketing, finance, human resource, etc., have goals and objectives, that if measured and tracked, help show if and how those functions are contributing to the organization's goals and objectives. Similarly, product and service areas will likely have goals and objectives. Goals and objectives can also be set for the way functions interact with product or service areas. For instance, are the finance, marketing, and human resource functions interacting in a way that is productive? Similarly, is marketing function delivering value to product or service initiatives.
Organizing Goals Model - The organizing goal model is expressed as a goal hierarchy rooted in the vision and mission of the organization with cascaded goals that define elaborations of high level abstract vision, mission, and business goals down to more concrete goals at the functional/tactical and operations levels. The hierarchical relations between the goals hierarchy/tree are based on AND-OR (exclusive, and SOME) goal-dependency relations.
Role of Goals in Leading
In terms of leadership, it is usually top managers that set goals and objectives for the entire organization. Lower-level managers such as function and line managers have input into the goals and objectives relevant to their respective areas of the organization. For example, a CEO might believe that the organization can achieve a sales growth goal of 20% per year. With this organizational goal, the marketing manager can then set specific product sales goals, as well as pricing, volume, and other objectives through out the year that show how marketing is on track to deliver its part of the organization's sales growth. Goal setting is a primary task of leadership, along with holding others accountable for their respective goals and objectives.
Role of Goals in Control
Goals and objectives can provide a form of control since they create a feedback opportunity regarding how well or how poorly the organization is executing its strategy. Goals and objectives are also a basis for reward systems, and can align interests and accountability within and across business units.