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The formulation of goals

management, organization, business, business goals, planning, directing, leading, controlling, staffing

The two factors with the strongest influence on the formulation of goals are the nature of an organization’s prior commitments and the power relationship within and outside the organization. The strategic contingencies model of organizational structure and power shed light on how these power relationships are involved in goal formulation. According to this perspective organizations can be viewed as conglomerates of subunits. This enlarges our view of goals ‘by not focusing exclusively on output parameters such as sales, patient mortality, or students’ aptitude. Goals are defined and actualized depending on the power inherent in various subunits. The strategic contingency theory says that power is ‘some multiplicative function of each subunit’s coping with uncertainly, substitutability, and centrality. Powerful subunits obviously have more weight in determining the organization’s goals than do weak subunits.

Dominant coalitions emerge from negotiations among group. The importance of various goals is a function of the relative strengths that the various proponents of those goals have in the negotiated social order. Constituencies probably have competing and potentially incompatible goals, and these have to be worked through by negotiation or other means. Ultimately, the coalition that is formed adopts some set of these goals.

Organizational goals are also influenced from outside the organization. Other people and organizations in the environment of a focal organization influence its goal to the extent that they have some control over it. Organizations either adapt to existing environments or select other environments that are more congruent with their goals. External constituencies are those organizations, such as customers, suppliers, competitors, or regulatory agencies that can influence the focal organization. These organizations set constraints and influence organizational goals.

Organizations have dyadic relationship with other organizations in their environments. The figure presents a simplified representation of such a set relationship. Rosabeth Moss Kanter calls for more pooling, allying, and linking across companies to meet the competitiveness problem in a world in which the strategic challenge is to do more with less.

In this view then, goals are a set of criteria, each reflecting evaluations made by various constituencies involved to a greater or lesser degree in the focal organization and its environment. The word constituencies is meant to reflect the fact that groups may or may not directly participate in organizational activities and that they have different amounts of power over the focal organization.

The issue of whether organizational goals are independent of individual goals is resolved by the idea of coalitions that define goals. A major shortcoming of this view, however is that it is extremely difficult to study organizational processes such as decision making that underline the allocation of key resources. Even if organizations let members or outsider study these processes, interpretation of what is seen is frequently flawed. For example in the late 1970s and early 1980s several large utilities in the West embraced energy conservation as a formal corporate goal because it helped them to defer the construction of expensive new power plants and at the same time helped customers manage their rising bills. Some outsider and even a few individuals within the utilities were skeptical that management was sincere and doubted the utilities commitment to making conservation effective. Only after several years repeated pronouncements and the adoption of extensive programs that saved literally billions of dollars worth of energy were the skeptics finally convinced that the conservation goals were real.

Changing goals

Another weakness in the goals approach is a possible mistaken impression that may derive from too much focus on goals. One might assume, incorrectly that goals are static expressions of organizational intention when, in truth goals change over time. Given turbulent environments and recurring conflict among coalitions it is easy to see why goals remain in a constant state of flux. Goals can change in one of two ways intentionally or unintentionally.

Goal succession occurs when management consciously decides to change the course of the organization. The SAS case provided earlier is such a situation. Another clear example of goal succession is the experience of the Nation Foundation for Infantile Paralysis. The foundation was established in 1938 by Franklin D. Roosevelt to provide information about and find a cure for polio. Through its March of Dimes campaign the organization ultimately succeeded in providing sufficient resources to reach its goal. Having done, that, it could have disbanded. To do so, however not only would have put many people out of work but also would have meant the destruction of the organization’s infrastructure, including communications networks and effective leadership. It was easier and more attractive to the organization to find a new mandate; fighting arthritis and birth defects.

Goal displacement

The other kind of goal change is goal displacement. It occurs when energies are unintentionally diverted away from the original goals of the organization. Displacement can take a number of different forms, the simplest of which is the means – end inversion, which occurs when the means designed to facilitate goal achievement become the ends in and of themselves. Suppose that a city council decides to slow down automobile traffic by issuing more speeding tickets. Eventually, the goals become one of issuing a certain quota of tickets. A similar means – end inversion is the law of the instrument, once expressed succinctly as follows; give a small boy a hammer and he will find that everything he encounters needs pounding. The use of workstations and personal computers in business today may suffer this kind of inversion; the goal may become having newer faster equipment rather than focusing on how the equipment can facilitate work.

The ‘iron law of oligarchy’ is another form of goal displacement. Here revolutionary political leaders may change because of their recognition that being in positions of leadership is associated with higher status, income, and power, which they did not enjoy in the past. The results are that the revolutionary goals are displaced in favor of maintaining the status quo. Successful entrepreneurs run the risk of this form of goal displacement; as a new innovation business meets success, the temptation often arises to codify behavior rather than to rely on the less formal, more flexible approaches that brought success in the first place.

There are a number of reasons for goal displacement:
1.The need to operationalize abstract goals;
2.The interpretation of goals brought about through delegation;
3.The uncertainly associated with new or tangible goals;
4.The necessity for coordinated and controlled activities;
5.The tendency to invent measures and evaluations, which can deemphasize qualitative goals;
6.The existence of prior commitments and decisions;
7.The absence of goal consensus;
8.The existence of personal goals and aspirations.
Published: 2007-04-14
Author: Martin Hahn

About the author or the publisher
Martin Hahn PhD has received his education and degrees in Europe in organizational/industrial sociology. He grew up in South-East Asia and moved to Europe to get his tertiary education and gain experience in the fields of scientific research, radio journalism, and management consulting.

After living in Europe for 12 years, he moved to South-East again and has worked for the last 12 years as a management consultant, university lecturer, corporate trainer, and international school administrator

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