Function or Role of Objective
The major functions and contributions of objectives are as follows:
1 defining an organization: every organization works in an environment consisting of several forces. These forces provide both opportunities and threats. In order to take the best possible from the environment it must define itself that is what kind of company it is or what kind of business it is in. This relates the organization with its environment. For example the following descriptions provide the kind of company each is or the business it is in.
- modern food industries limited: manufacturing and marketing of nutritional foods to the public.
- India photographic company limited: a quality oriented photographic system appealing to the consumer who desires instant photography.
- Weston electronics limited: the provision of high quality product in the area of electronic entertainment. Such a definition of the company in relation to its environment provides a clear thinking for the types of efforts the company should make so that it achieves its objectives. The failure to define the nature of the company based on its objectives and environment leads to confusion about the way in which the company wants to move.
2 Directions for decision making: objectives provide the directions for decision making in various areas of the organization operation. The objectives set the limits and prescribe the areas in which the managers can make decision. Since there is no ambiguity about the ends to be achieved managers are quite clear about the expectations which the organization has from its functions. From this point of view clearly specified objectives serve a number of purposes.
- clear definition of objectives encourages unified planning. Objectives embody the basic idea and fundamental theories as to what the organization is trying to achieve. This is necessary to give the meaning and direction to the work of the people associated with the organization. Such objectives are the focus for different individuals and unifying effect Aries when various plans prepared by several people are adjusted to a common objective.
- objectives work as a motivating force by providing direction to organizational members. Individuals have frame work to fit their personal needs with organizational objectives. A sense of accomplishment of meeting objectives is desired by all individuals. Thus fulfilling of objectives itself is a source of motivation for the people in the organization.
- voluntary coordination as an essential feature of the organizational objectives is achieved easily if the objectives are clearly specified and mutually agreed upon. People tend to work within their own areas of discretion and adjust according to the needs of others if they know their own and other objectives.
3 performance standards: objectives provide standards against which performance of the organization its units sub units and individuals can be measured. Without performance standards which are derived from the objectives there cannot be any meaningful control activities in the organization. Such control measures not only ensure the achievement of organizational objectives by taking corrective actions if needed but also put a psychological pressure on those who are responsible for achieving the organizational objectives.
4 bases for decentralization: decentralization includes assigning decision making authority to lower level people there by a subordinate is given considerable leeway in deciding to perform his work. Decentralization is necessary for large size organizations. However independent decision making authority to subordinates may lead to disintegration of the organization unless there is a clear indication of the contributions of each unit towards the realization of common objectives. Objectives indicate the contributions to be made by each unit for trying them effectively and allowing the managers concerned to exercise their individual skills and initiative.
5 integrating organization group and individual: clearly specified objectives may provide integration of the organization and it varies groups and individuals. An organization cannot exist apart from its individuals, and various groups associated with it, such as creditors, customers etc. if the objectives are clear, these will communicate the relationship between the organization and various groups and individuals. Therefore, the individual and groups can better be integrated because they have clear basis for dealing with the organization.