Edinburgh Business School MBA Strategic Planning Module 3 Company Objectives Instructor: Moataz Darwish, MBA Contents 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. Setting Objectives From Vision to Mission to Objectives The Gap Concept Credible Objectives Quantifiable and Non-Quantifiable Objectives Aggregate Objectives Disaggregated Objectives The Principal / Agent Problem Means and Ends Behavioural versus Economic and Financial Objectives Economic Objectives Financial Objectives Social Objectives Stakeholders Ethical Considerations Are Objectives SMART? 2 The Model 3 Setting Objectives What are we trying to achieve??? 4 Setting Objectives Any strategic plan is based on the achievement of specified objectives; devising a plan without objectives is a meaningless exercise. Confusion between plans and objectives pervades many areas of activity. Some managers become so involved in the planning process that they overlook what it is meant to achieve; There is a danger that managers confuse the means by which ends are to be achieved with the ends themselves. What is to be achieved ought to be differentiated from How it is to be achieved; 5 Setting Objectives Since strategy is at least partly concerned with confrontation with competitors, it may not always be advisable for a company to be explicit about its objectives. Ex: a company may identify an increased market share in a particular market segment as a major policy objective. However, if competitors became aware of this they could preempt the company’s moves by reducing prices, with the result that the company becomes worse off than before. There is clearly a balance to be struck between informing managers about objectives and ensuring that competitors cannot preempt strategic moves. It is also likely that in the early stages of strategy formulation it is not possible to identify more than the general thrust of strategy, and at this stage it is not possible to be specific.