The Strategic Management Process: Setting Goals and Objectives
Overview Most modern businesses are quite complex and consequently need to develop and control strategies at several levels within their organisations; ranging from the overall corporate strategy at the top, down to the very detailed competitive strategies needed for each different product/market interface. The challenge for such groups is to ensure that each level in these structures makes a positive contribution towards creating shareholder value; achieving this may require changes to the organisational structure. The strategic management process should start with a vision statement
(‘what the business is’) and/or a mission statement (‘what the business wants to be’). These unquantified statements are made increasingly more specific by the development of goals and objectives for the organisation. However different groups of stakeholders may need specific goals and objectives which are directly relevant for them; it is clearly important that these goals and objectives are all mutually compatible, and all in line with the overall mission statement. For even simple, tightly focused businesses translating the mission statement
into practically usable objectives and strategies can become quite complicated. Normally specific functional objectives and strategies need to be established. For larger, more diverse groups, the challenges are correspondingly greater. Each group needs to consider how its organisational structure impacts on the achievement of its overall mission and corporate goals and objectives. The most relevant structure is often to break the group into strategic business units, where each such division has responsibility for external customers and/or a specific range of products. However many large groups have now adopted mixed structures, where market focused divisions are supported by functionally based centres and some internally driven businesses (such as IT, marketing research). These mixed structures often create as many problems as they solve, but the key objective is to obtain economies of scale in the more general groupwide activities and processes while achieving clear market focus where specifically required at the divisional level.