What is Organizational Goals? Definition, Types, Purpose, Principles, and Examples

What is Organizational Goals?

An organizational goal is what an organization wants to achieve shortly. Organizational goals are the desired outcome of organizations. The goals of the organization help every member of an organization to understand where the organization is going.

Goals are objectives or aims for which an organization has formed. Setting the goals of an organization is the initial function of the management. Goals are what an organization comes into existence.

Goals give meaning and purpose to an organization. They determine the scope of future activities and serve as a reference point to concentrate on resources and efforts. They determine the action to be taken at the present to obtain results in the future.c

Many organizations have several kinds of goals based on the scope and nature of the business, thus the managers of all levels must involve in setting goals through the optimum use of resources and putting appropriate effort into it to achieve goals.

If an organization is a business organization, the main goal of this organization is to earn maximum profit by supplying goods and services to people. Similarly, if an organization is a government organization, may the main motive of this organization is to involve in public welfare activities where its service concerns the public welfare.

While setting the organizational goals, the manager must focus on the terms mission, purpose, objectives, goals, and target that are used interchangeably in management. However, there is a slight difference between them.

The mission is a broad term and it represents the philosophy and ideology of the top management. It focuses on long-term goals, which are generally difficult to achieve. Purpose relates to the reason for an organization’s existence. It answers the question of why an organization is formed. The objective indicates the endpoint and focuses on the entire organization. However, objectives, goals, and targets are simultaneously used in management practice.

Definitions of Organizational Goals

According to Amitai Etzioni, “Organizational goal is the desired state of affairs that organizations attempt to realize.”

According to Moorhead and Griffin, ” Organizational goals are the objectives that management seeks to achieve in pursuing the firm’s purpose.”

According to Steers, Ungson, and Mowday, “Organization goal is a desired state of affairs that indicates where the organization is going; a frame of reference for understanding and evaluating what an organization does.”

According to Kast and Rosenzwing, “Goals represent the desire future conditions that individuals, groups, and organizations strive to achieve.”

From the above definitions, it may be concluded that an organizational goal is a desired future state of affairs that management seeks to achieve. It must be specific, measurable, and set for a definite time period.

Types of Organizational Goals

Based on the time frame, organizational goals are of three types corporate or strategic, tactical, and operational goals.

Strategic Goals or Corporate Goals

Strategic goals or corporate goals are long-term goals focusing on broad terms. This goal is developed by top-level management.

Related: Strategic Management: Definition, Features, Process, And Importance

A strategic goal is a fundamental goal of an organization, based on this goal, various short-term goals are developed to get near the organizational missions.

Tactical Goals

Generally, tactical goals are set by the middle-level managers but sometimes it is also set by the top-level managers.

This goal is developed to achieve the strategic goals of an organization and the time frame of this goal is upto 12-24 months depending on organizational goals.

Operational Goals

Operational goals are very short-term goals. These goals are set by lower-level managers as well as developed by middle-level managers for operational-level employees.

It deals with short-term issues to achieve tactical goals.

Principles of Setting Organizational Goals

Every organization aims at playing effectively and achieving the desired goals. As such managers need to set goals that are effective and can be achieved within the organizational resources.

The following five are the main principles of setting effective organizational goals. In short, also called, SMART goals.

Related: 24 Qualities Of A Good Manager You Should Look For

Specific

Goals must be clearly stated and avoid being vague or over-ambitious. When goals are specific, employees can understand them better and align their efforts accordingly. It is crucial for each unit and department to have specific goals that are directly linked to the overall organizational goals. This alignment ensures a cohesive and focused approach throughout the organization.

Measurable

Organizational goals should ideally be measurable, allowing for quantifiable evaluation. Measurements can involve various aspects such as quantity, quality, cost, and time. Measurable goals provide a tangible way to assess progress and employee performance, enabling organizations to track their achievements effectively.

Attainable

Goals need to be attainable or feasible for them to be motivating. Employees should believe in the goal and have confidence in their ability to achieve it. Setting unattainable goals can lead to frustration and demotivation. Ensuring that goals are realistic and within reach encourages individuals and teams to exert the necessary effort to accomplish them successfully.

Realistic

Organizational goals should be based on facts and grounded in reality, avoiding hypothetical or imaginary targets. Realistic goals are sensible and rational, considering the available resources, capabilities, and market conditions. A balanced approach should be taken, with goals supported by sound reasoning and evidence. Realistic goals foster a sense of purpose and enable organizations to make practical progress toward their desired outcomes.

Time-Bound

Every goal must have a specific time frame for achievement. It is essential to allocate a start and end date for each goal. Without a time frame, goals lack urgency and fail to provide a sense of direction. Setting a timeline helps employees prioritize their efforts, manage their time effectively, and remain motivated throughout the goal-attainment process.

Related: What Is Planning? Definition, Features, Importance, & Process

Importance of Organizational Goals

Every organization sets goals to achieve the desired destinations. Goals are the basis for the functioning of the organizations. The following are the main purposes/importance of organizational goals;

To Provide Guidance and Unified Direction

Goals are the basis for the future performance of an organization. Managers of organizations provide proper guidance and unified direction to their employees by considering their goals. This may help every employee/member of an organization to understand where the organization is heading for.

Also Read: What Is Directing? Definition, Features, Components.

To Promote Good Planning

Goals are the basis for planning. Good planning focuses on goals. The manager formulates corporate, tactical, and operational plans by considering organizational goals. Organizational resources are allocated based on goals. And, it also helps in decision-making.

To Serve as a Source of Motivation

Specific, realistic, and challenging goals serve as a source of motivation for employees. Such goals are the basis of motivation for efficient, skilled, and hardworking employees. Realistic goals can be achieved within a definite time frame which will provide a reward to employees.

To Provide an Effective Mechanism for Evaluation and Control

Goals provide an efficient way to evaluate and control employee performance. They help to set a standard of performance for an organization. When standard goals are achieved it is assumed that performance is efficient. But, if actual performance is below the required standard, it is essential to take corrective measures to improve future performance.

Related: What Is Controlling? Definition, Features, & Types

To provide a Distinct Image and Identity

Sound and realistic goals provide a distinct image and identity to an organization among the public. This facilitates the attraction of efficient and competent employees in organizations. The involvement of skilled employees helps maximize productivity and improves the quality of goods and services of an organization.

Examples of Organizational Goals

Every organization is established to achieve some goals for which it is established. Let’s look at some of the examples of organizational goals.

  • Profit Maximization
  • Social Welfare
  • Employee Satisfaction
  • Better Customer Service
  • Market Expansion
  • Product Diversification
  • Providing Naturally Healthy Products
  • Provide Quality Products at a Reasonable Price
  • Becoming a Center for Learning
  • Increase Sales by 5% within Two Years
  • Enhance Operational Efficiency
  • Foster Innovation and Creativity
  • Enhance Brand Awareness
  • Foster a Diverse and Inclusive Workplace
  • Improve Stakeholder Relationships

These are just some examples of organizational goals, and they can vary depending on the nature and size of the organization.

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