If you dont know where you are going, any road will take you there'

1
If you dont know where you are going, any road
will take you there.

• The Koran

Managements job is not to see the company as it
is . . . but as it can become.
John W. Teets
2
Strategic Objectives

• Strategic objectives operationalize the
  mission statement. They provide guidance on how
  the organization can fulfill or move toward the
  organizational mission and vision

3
(No Transcript)
4
Strategic Objectives

• Strategic objectives are an organizations
  performance targets-the results and outcomes it
  wants to achieve. They function as yardsticks for
  tracking an organizations performance and
  progress

5
(No Transcript)
6
Benefits of Strategic Objectives

• They help to channel employees throughout the
  organization toward common goals
• Challenging objectives can help to motivate and
  inspire employees throughout the organization to
  higher levels of commitment and effort
• They resolve conflicts when they arise
• Provide a yardstick for rewards and incentives

7

Types of strategic objective
Strategic Objectives
Financial Strategic Objectives
Nonfinancial Strategic Objectives
8
Types of Objectives Required
Financial Objectives
Strategic Objectives

• Outcomes focusedon improving financial
  performance

• Outcomes focused on improving long-term
  competitive business position

9
Examples FinancialObjectives

• X increase in annual revenues
• X increase annually in after-tax profits
• X increase annually in earnings per share
• Annual dividend increases of X
• Profit margins of X
• X return on capital employed (ROCE)
• Increased shareholder value
• Strong bond and credit ratings
• Sufficient internal cash flows to fund 100 of
  new capital investment
• Stable earnings during periods of recession

10
Examples StrategicObjectives

• Winning an X market share
• Achieving lower overall costs than rivals
• Overtaking key competitors on product performance
  or quality or customer service
• Deriving X of revenues from sale of new
  products introduced in past 5 years
• Achieving technological leadership
• Having better product selection than rivals
• Strengthening companys brand name appeal
• Having stronger national or global sales and
  distribution capabilities than rivals
• Consistently getting new or improved products to
  market ahead of rivals

11
Short-Term vs. Long-Term Objectives

• Short-term objectives
• Targets to be achieved soon
• Milestones or stair steps for reaching long-range
  performance
• Long-term objectives
• Targets to be achieved within3 to 5 years
• Prompt actions now that willpermit reaching
  targetedlong-range performance later

12
To achieve long term prosperity, strategic
planners commonly establish long-term strategic
objectives in seven areas

• Profitability
• Productivity
• Competitive position
• Employee development
• Employee relations
• Technological leadership
• Public responsibility

13
For strategic objectives to be meaningful they
must be

• Specific there must be at least one indicator
  (or yardstick) that measures progress against
  fulfilling the objective
• Measurable this provides a clear message to
  what needs to be accomplished
• Appropriate it must be consistent with the
  vision and mission of the organization.
• Realistic it must be an achievable target given
  the organizations capabilities and opportunities
  in the environment. In essence, it must be
  challenging but doable.
• Timely there needs to be a time frame for
  accomplishment of the objective. After all, as
  the economist John Maynard Keynes once said, in
  the long run, we are all dead

14
Qualities of Long-Term Strategic Objectives

• Acceptable
• Flexible
• Measurable
• Motivating
• Suitable
• Understandable
• Achievable

15
Networking of Missions,Goals/Objectives, and
Strategies
Corporate Level Objectives
Corporate-wide Strategic Vision
Corporate Level Strategy
Corporate-Level Managers
Business Level Objectives
Business Level Strategic Vision
Business Level Strategies
Functional Objectives
Functional Missions
Functional Strategies
Operating Objectives
Operating Missions
Operating Strategies
16
General Motors

• Strategic Goal and Objectives

17
(No Transcript)
18
GM Objective 2003

• Global Objectives
• In 2003, GM established a global energy use
  reduction target of 10 percent and a global CO2
  reduction target of 8 percent between 2000 and
  2005 consistent with global goals for energy and
  water usage over this time period. The global
  energy use and CO2 targets have been met
  successfully.

19
General Motors Goal (2007)

• to take the lead in development and production
  of more fuel-efficient vehicles and the
  conversion to alternative power, such as
  electricity and hydrogen fuel cells, to power
  vehicles , Larry Burns, vice president of
  research and development and strategic planning

20
GMs Goal
Fuel Efficiency, Zero Emissions
21
GM Green Annual Report

• Building Community Capital
• Engaging employees and Facilities
• Improving Education
• Generating Public Interest

22
GM Green Products
23
Bank One corporation(Nonfinancial strategic
objective)

• To be one of the top three banking companies
  in terms of market share in all significant
  markets we serve

24
(No Transcript)
25
(No Transcript)
26
3M Corporations Financialand Strategic
Objectives

• To achieve annual growth in earnings per share of
  10 or better, on average
• A return on stockholders equityof 20-25
• A return on capital employedof 27 or better
• Have at least 30 of sales come from products
  introduced in the past four years

27
(No Transcript)
28
Concept of Strategic Intent

• A company exhibits strategic intent when it
  relentlessly pursues an ambitious strategic
  objective and concentrates its competitive
  actions andenergies on achieving that objective!

29
Nikes Strategic Intent

• Nikes strategic intent during the 1960s was
  to overtake Adidas (which connected nicely with
  Nikes core purpose to experience the emotion of
  competition, winning, and crushing competitors).

30
(No Transcript)
31
Hondas Strategic Intent

• When Yamaha overtook Honda in the motorcycle
  market, Honda responded with a warlike strategic
  intent Yamaha wotsubusu we will crush, squash,
  slaughter Yamaha

32
(No Transcript)