Management and Organisational Behaviour
7th Edition
CHAPTER 5
Organisational Goals, Strategy and
Responsibilities
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 5.2
Organisational goals
• The goals of an organisation are the reason for its
existence
• A goal is a future expectation, some desired future state
• The goals of an organisation determine the nature of its
inputs & outputs, the series of activities through which
outputs are achieved and interactions with its external
environment
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 5.3
Goal model approach
• Concentrates on the study of organisational goals & the
measurement of success against the realisation of
goals
• Focuses attention on an organisation’s lack of success
in attaining goals at the expense of more meaningful
forms of analysis
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 5.4
Defining goals
• As value premises which serve as inputs to decisions
• Goals at different levels within the organisation
contribute to alternatives for decision making
• Goals can be see more as sets of constraints that the
organisation must satisfy
Simon
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 5.5
Functions of goals
Goals:
• provide a standard of performance
• provide guidelines for decision-making and justification
for actions taken
• influence the structure of the organisation and help
determine the nature of technology employed
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 5.6
Functions of goals
Goals:
• help to develop commitment of individuals and groups to
organisational activities
• provide an indication of what the organisation is really
like
• serve as a basis for the evaluation of change and
organisational development
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 5.7
Informal & formal goals
• Informal goals may be inferred from the actual
decisions made & actions taken within the
organisation
• Formal goals are officially stated
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 5.8
Figure 5.1
Compatibility of organisational goals
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 5.9
Classification of organisational goals
Etzioni classifies organisational goals in terms of their
relationship with the concept of power & compliance:
• Order goals – negative & attempt to place some kind
of restraint upon members
• Economic goals – concerned with the production of
goods / services to people outside the organisation
• Cultural goals – concerned with symbolic objects &
with creating or maintaining the value systems of
society
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 5.10
A systems view of organisational goals
• Consumer goals - the nature of outputs in terms of
markets served and consumer satisfaction
• Product goals – the nature and characteristics of the
outputs
• Operational goals – the series of activities involved in
providing outputs and the operation and functioning of
the organisation
• Secondary goals – those not related to the main aims
of the organisation
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 5.11
Organisational values & beliefs
• Ethical foundation
• Organisational or operational foundation
Brech
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 5.12
Organisational values
• Values are guidelines a person uses to make choices.
Within organisations, basic beliefs affect what decisions
are made, how people interact and the kind of work
practices that are pursued and developed
• Values form the glue that binds an organisation’s culture
Dainty & Anderson
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 5.13
An organisation’s vision & mission
• Vision provides the overall frame of reference within
which mission statements are written & goals selected
• The vision is the desired future state of the
organisation
• The mission is a general expression of the overall
purpose of the organisation, which is ideally in line with
the values & expectations of major stakeholders
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 5.14
Figure 5.2
A systems view of organisational goals &
objectives
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 5.15
Primary objectives
The primary objectives of an organisation may be
seen as:
• To continue to exist – survive
• To maintain growth & development
• To make a profit
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 5.16
Figure 5.3
Objectives of a business organisation
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 5.17
Objectives – eight key areas in terms of
performance & results
•
•
•
•
Market standing
Innovation
Productivity
Physical & financial
resources
• Profitability
• Manager performance
& development
• Worker performance
& attitude
• Public responsibility
Drucker
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 5.18
The balanced scorecard
Combines qualitative & quantitative indicators of
performance which recognise the expectations of
various stakeholders & relates performance to a
choice of strategy as a basis for evaluating
organisational effectiveness
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 5.19
Balanced scorecard elements
•
•
•
•
Financial accounting measures
Product & process innovation
Employee skills
Customer satisfaction
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 5.20
Strategy
Corporate strategy serves to describe an
organisation’s sense of purpose, and plans and
actions for its implementation
Tilles suggests that without an explicit
statement of strategy it becomes more difficult
for expanding organisations to reconcile
co-ordinated action with entrepreneurial effort
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 5.21
A strategic framework
Bruce maintains that a business needs a
structured strategic framework which provides
the starting point for moving forward and a
means for assessing & responding to change
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 5.22
The elements of a strategic framework
•
•
•
•
Things that are driving strategic decisions
The direction that the organisation is heading in
The products & services that will be delivered
The design of the organisation’s processes,
knowledge systems & people development
mechanisms
• Specific targets that identify whether the organisation
is deviating from its plan
Bruce
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 5.23
Positive synergy
Positive synergy results when the whole is
greater than the sum of its component parts
2 + 2 = 5 effect
Example: The merger of a computer firm with expertise
in the design and marketing of hardware with a firm
expert in software manufacturing and systems design
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 5.24
Negative synergy
2 + 2 = 3 effect
Example: When a merger occurs between
organisations operating in different fields, with
different markets or with different methods
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 5.25
SWOT analysis
• Provides convenient headings under which
an organisation can study its environmental
setting
• Provides a basis for problem solving &
decision making
-
Strengths
Weaknesses
Opportunities
Threats
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 5.26
Managing opportunities & risks
Drucker suggests that:
• strategy should be based on the priority of
maximising opportunities
• risks should be viewed as limitations on
actions
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 5.27
Managing opportunities & risks
Selecting the right opportunities requires:
•
A focus on maximising opportunities rather than on
minimising risks
• Scrutinising the characteristics of major opportunities
collectively rather than in isolation
• Understanding opportunities & risks in terms of the
appropriateness of their fit to the business
• Striking a balance between immediate & easy
opportunities for improvement
Drucker
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 5.28
E-business strategies
Kermally asserts that e-business strategy is important
because:
• information can be shared more quickly and easily
• it facilitates human interaction
• it enables organisational resources and capabilities to
be stretch strategically
• it provides global reach in marketing
• it allows consumers to shop 24 hours a day from any
location
• it promotes economic growth
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 5.29
Social (corporate) responsibility of organisations
The European Commission is encouraging
firms to assess their performance not on profit
margins alone but also on the welfare of their
workforce and care for their environment
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 5.30
Organisational stakeholders
Stakeholders can be considered under
headings of:
•
•
•
•
•
•
Employees
Providers of finance
Consumers
Community & environment
Government
Other organisations & groups
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 5.31
Ethics & business
Ethics is concerned with:
• the study of morality
• practices & activities that are considered to
be importantly right or wrong
• the rules that govern activities and the values
to which the activities relate
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 5.32
Ethical questions in business
• Behaviour towards all stakeholders
• The way employees are treated
• The effect on the natural environment
• Conduct in international operations
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 5.33
Ethics – further approaches
• Virtue ethics – based on an analysis of
desirable human qualities that lie between
undesirable extremes
• Ethical relativism – holds that goodness &
badness are largely or entirely determined by
the prevailing values of the day
• Emotivism – statements about ethics are
essentially statements about the speaker’s
attitudes
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 5.34
Related legislation
• Human Rights Act 1998
• Public Interest Disclosure Act 1998
• Local Government Act 2000
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 5.35
Three broad levels of enquiry
• Descriptive approach - draws attention to
the values & beliefs of people from different
cultures
• Normative approach - identifies sets of
values & beliefs as a basis for making ethical
decisions
• Analytical approach - attempts to explore
the relationship between the normative values
& beliefs and other value systems or
ideologies
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 5.36
Figure 5.4
Ethical business circles
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005