Steps in Goal Setting

Goal setting just like planning is not a random activity but rather it is a process that follows certain distinct steps.

    i.     Environmental scanning and monitoring to identify opportunities and threats.
    ii.     Assessment of organizational strengths and weaknesses.
    iii.    Establishment of overall organizational goals.
    iv.    Establishment of unit goals.
    v.    Establishment of sub-unit goals.
    vi.    Monitoring of progress toward goals attainment at all levels of the organization.

This process of goal setting is affected by the various environmental factors. Important aspects of the environment that may affect goal setting include:

i. Political-legal forces

These are those forces associated with governmental and legal systems.

ii. Economic forces

These are such aspects of the economy as inflation, economic growth, interest rates and unemployment. For example during inflationary periods firms must pay more for materials and other utilities.

iii. International forces

Here factors like multinational businesses, foreign investments, foreign pricing must be considered.

iv. Sociocultural factors

These include customs and value that characterize the society within which the firm operates. These influence consumer tastes, employee attitudes and society preferences.

v. Technological forces

Which affect modes of production and communication methods also affect goal setting.

There is also the company's task environment which consists of dimensions that affect the organization specifically i.e. they are unique to it and affect it in specific ways e.g. the firms customers, suppliers, competitors and trade unions.

Notes

•All organizations have multiple goals. Goals may be by level so that at the top goals are mainly the purpose and mission of the organization. Middle management set goals which must follow logically from the strategic goals of top management. Line managers also have goals which relate to specific projects or activities pertinent to the manager's job.

•Goals can also be by areas of function so that we have goals for marketing, financial, production and personnel departments.

•Goals may also be classified according to their time frame so that there are short range, medium range and long range goals.
In dealing with all these different goals, the manager must try to use his or her skills to balance the disparate goals into a congruent set of organizational aims. This balancing is known as goal optimization and involves a trade off between different goals for the sake of organizational effectiveness.

Optimization allows the organization to pursue a unified vision and therefore helps managers maintain consistency in their actions.