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The Nature of Organization ( 12 to 17)
Meaning of Organization
Concept of organization;
Organizational goals: concept, purposes, and types;
Features of effective organizational goals;
Goal formulation: processes and approaches;
Goal succession and displacement:
Problems of goal formulation;
Changing perspectives of organization.
Meaning of Organization
Organization is human association, where two or more people come together with certain
common aim and desire to achieve certain common goals through joint efforts and team work.
Max weber defined an organization as "a coordinated social entity with a relatively stable
structure, designed to achieve specific goals and objectives by involving the allocation of tasks
and responsibilities among its members."
Note :- Group of people, common goal and joint efforts are common terms of every definition.
In the context of business and management, an organization can be a company, nonprofit,
government agency, or any other group with a shared purpose.
Tribe, ethnic groups, families are not organization.
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Features of Organization
• Structure: Organizations have a defined structure that outlines roles, responsibilities, and
reporting relationships. This structure can be hierarchical, matrix-based, or flat, depending on
the organization's size and complexity.
• Human Association : In organization, there is always involvement of human resource to
perform a variety of activities in goals achievement process.
• Group efforts : A group of people willingly contribute their time, energy, and resources to
collaborate to achieve a common goal, task, or project in organization•
• Common goal : Every organization has its own goals. It is a common purpose which binds all
the individuals and groups to contribute their efforts.
• Division of work : organizational goal achieved through various group of task, organization
divide task to group members by their expertise.
• Hierarchy of authority : organization has chain of command and control system determine
by hierarchy of authority. To achieve organizational goal effectively, organizational members
set their hierarchy of authority and responsibility on the basis of their jobs.•
• Stakeholders: Organizations interact with various stakeholders, including employees,
customers, investors, suppliers, and the community. Managing these relationships is important
for maintaining trust and support.
• Flexibility : Organizations work in a changing environment. An organization's actions and
strategies may change according to the environment.
• Management functions : : organization achieving its common objectives through managerial
function such as planning, organizing , directing, controlling and coordination of resources. •
• Coordination : organization make inter relationship between group members to make
common efforts.
• Artificial person : organization work as artificial person. It makes its transaction and deal with
its own name and it has its separate seal.
• Technology : Workforce of organization make their group efforts through means of
technology.
Conclusion: An organization or organization, is an entity—such as a company, an institution, or
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an association—comprising one or more people and having a particular purpose.
Meaning of Goal
A goal is an idea of future or desired result that a person or a group of people envision, plan and
commit to achieve.
Goal is expected outcomes from the activities in the organization. It is the reason behind
existence of the organization.
It provides a sense of direction and purpose, guiding actions and decisions toward its
attainment.
Goals can be short-term or long-term and can encompass various areas of life, such as
personal, professional, academic, or health-related objectives.
Purposes of Goal
Direction and Focus: Goals provide a clear sense of direction for the entire organization. They
help align efforts and resources toward a common objective, preventing individuals and teams
from working in isolation or pursuing conflicting priorities.
Motivation : Well-defined goals can be motivating for employees. When individuals have a clear
understanding of what they are working toward and how their efforts contribute to the larger
picture, they are often more engaged and committed to their work.
Measurement and Evaluation: Goals provide a basis for measuring performance and progress.
They enable organizations to track their success or identify areas that need improvement. This
measurement helps in assessing the effectiveness of strategies and making necessary
adjustments.
Resource Allocation: Setting goals helps organizations allocate resources, such as budget,
manpower, and time, more efficiently. It ensures that resources are directed toward initiatives
that are aligned with strategic priorities.
Innovation and Adaptation: Goals can drive innovation by encouraging employees to think
creatively in order to achieve them. Additionally, they can prompt organizations to adapt to
changing circumstances and market conditions to remain competitive.
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Stakeholder Confidence: Clearly articulated goals can enhance the confidence of stakeholders,
including investors, customers, and partners. When an organization demonstrates a
commitment to specific objectives, it can foster trust and loyalty.
In summary, organizational goals play a pivotal role in guiding, motivating, and evaluating the
actions of an organization.
Types of goal
1. Level wise goal
a. Corporate goal : Corporate goals are Board goals which over and direct overall activities of
organization. These types of goal formulated by top level management. They represent by
mission and strategy.
For eg. Mission: ''To provide quality and affordable mobile phone."
Strategy: ''Maximise the production by 3 times and achieve quality rating 4 Star"
b. Tactical goal: The tactical goals are set of goals which translates strategic goal into action.It
formulate by mid level managers.
Eg. '' cost reduce by 3 times, sell increase 40% annually''
c. Operational goal: Operational goals are unit sectional goal formulated by lower level manager.
Eg. To produce 100 units per day, Sells 2500 mobile phone each day.
2. Time Frame goal
a) Long term goal: It is expected outcomes over long period of time. It basically covers over 5
years time period.
b) Mid term goal : It is parallel to tactical goal. Its time period is more than 1 year and less than
5 years.
c) Short term goal): It covers below or up to 1 year.
3. Functional Goals
a) Marketing Goal : Marketing goal is an organization's promotional efforts to allocate its
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resources across a wide range of platforms, achieve sustainable competitive advantage within
its corresponding market.
(b) Production Goal : It related with how, where and how much quantity to be manufactured.
c) Financial Goal : It related with the acquisition of fund and effectively manage of these fund.
d) Human Resources Goal : It related with the acquisition, development and maintenance of
skilled workforce.
e) Research and Development Goal : It related with the acquisition, use and development of
technology and working system.
Conclusion: organization goal set by top Level management, but managers, employees and
workers set their goal with coordination to achieve organizational main goal.
Features of Organizational Goals (SMARTEST)
Specific : Organizational goals should be clear, precise and well-understandable by all
concerned peoples. They should not be unclear, vague, and abstract.
For instance, goal of attaining 10% return is quite clear, whereas goal of attaining higher return
is unclear and vague.
Measurable : An effective goal is one that is measurable in quantitative terms such as time,
cost, quantity, standard quality level, distance etc. Measurable goals are easy to evaluate and
control.
For example, the goal of getting 25% profit is easily measurable whereas, the goal of getting a
higher level of profit is non-measurable.
Acceptable : Organization goals must be acceptable to related parties who would be working
on achieving them. An active participation of both higher and lower management should be
their in goal setting-up process for reaching better understandability.Suppose, employer
determines the goal of cost reduction that results in reducing employee’s facilities, so here
employee may not accept goal and do not go into implementation.
Realistic : Goals should be realistic in nature, suited to the ground the reality of the
organization. Availability of required resources need to be considered while formulating the
organizational goals. Setting up of unrealistic and unachievable goals only adds expenses and
may even leads to collapse of company.
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Time bound : The goals should be linked with time or in other words, must be bound by a time
frame. A clear estimation of time needs to be done for accomplishing the goals in the
future.Like, a goal of reaching 20% profit level in 3 years has well-specified period of time to
achieve.
6. Evaluate : Goals must be evaluated timely such as weekly, monthly or annually. The
evaluation also allows learning from mistakes and optimize further goal setting process.
7. Support: Goals should be supported by organizational resources Without resources, they
cannot be achieved effectively.
8. Trust: Goals should promote trust within the organization. For this, they should be congruent
across departments and units of the organization. It helps to bring synergy and remove
unnecessary conflicts in the organization.
Process of Goal Formulation
1. Assigning a group: At first a group in which the involvement of all the level of mangers from
top, middle and lower level are assigned. The involvement of higher level ensures the utilization
of their expertise on environmental changes and effective allocation of resources; where as the
involvement of lower level ensures the formulation of realistic and achievable goal and
commitment towards the work.
2.Environmental Scanning : After the group is assigned the necessary and relevant information
of internal and external environment are gathered and analyzed. This helps to know the
changes occur in external environment like political changes, technological changes, socio-
cultural changes etc. and its possible impacts as well as, the strength and weakness of the
organization that can capitalize the opportunities and neutralize the threats.
3. Determining and listing the potential goals : After the rigorous analysis of environmental
factors and its impacts, potential goals are formulated and listed.
4. Brainstorming on potential goals : Once managers formulated the list of potential goals, it is
necessary to think deeply on each of them according to their importance. Managers discuss
these goals on their relevancy, strength, weakness and success in future.
5. Reach the consensus : Once the goals are carefully discussed, a best goal among the list is
choose. There must be acceptance of majority in goal selection. This not only helps to avoid
conflict but also helps in motivating the workers toward goal achievement.
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6. Determine the major area of responsibility : After finalizing the goal, the activities related to
its achievement are determined. In addition, the authority-responsibility relation of the activities
and individual are determined and assigned the task accordingly
Conclusion: Goal formulation is very purposive and complex task. Management should set goal
by proper study of all angle of goal.
Approaches of goal formulation
Top-Down approach: Top-down approach is a directive approach. Under this approach, top
executives first develop the corporate goals and disseminates them to middle and lower level
managers for implementation. Top level mangers use their knowledge and experiences to
formulate the goals.
Bottom-Up approach: Bottom-up approach is a participatory approach. Under this approach,
functional workers formulate goals for their positions and passes to the top level for final
revision and approval. Top level management finalizes the goals on the basis of mission
statement and disseminate to lower level for its implementation.
Management by objective (MBO) : MBO is initially suggested by Peter Druker in 1960.It is the
process under which both top level and lower level management jointly formulate the goals for
an organization. They determine each individual’s major area of responsibility in terms of goals
which gives employees a sense of ownership and motivates further. The collective effort of
both superior and subordinates in goal setting process is the major advantage of MBO.
Problems face by management in goal formation
Problems or Barriers to goal setting come in all shapes and sizes and hold managers back from
achieving goals. All of the barriers can be planned into organizational goals so it can avoid
them when they are presented. Following problems should be faced in goal formulation by
managers.
1.Inappropriate Goals: Goals should be appropriate for the internal factors of the organizations,
such as; financial condition, size, market share and more.The organization is headed for trouble
is they select goals which are beyond their grasp.
2. improper reward system : The improper reward system is a barrier to goal setting and
planning. Employees are motivated only when there is a good relation between goal formulation
and reward system.
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3. Dynamic and Complex Environment : The environment factors like technology, politics, etc.
Force the organization to change its policies and practices.If the nature of an organizations
environment is not work-friendly then it is also a barrier to effective goal setting and planning.
4. Reluctance to Establish Goals : Some managers are a reluctance to establish goals for
themselves.The reason for this reluctance may be lack of confidence, fear of failure, lack of
skill or lack of responsibility.
5. Resistance to Change : It is a big problem for goal setting and planning. Goal formulated to
achieve certain changes in present situation. However employees and even managers may
ignore the change because of the fear of job, low knowledge of technology, etc. This creates
problems in goal formulation.
6. Resources Constraints : Goal are formulated on the basis of backup resources available in
an organization. However, inadequacy of such resources may lead to unrealistic goals,
frustration and goal displacement.
Conclusion: When the organization sets the target, it should study the problems that may arise
and find ways to face such problems in time. This increases the chances of the target being
successful.
Goal Succession
Goal succession is the process of where the new, altered or modified goals are incorporated or
substituted for the existing goals in a manner that they are in coordination with existing goals
and do not change the spirit of goals.
Goal succession is the act of intentional review and modification of existing goal by the top-
level management. The purpose of goal succession is to identify and develop new goals core
place current incumbents due to changes in the external and internal environment.
Reasons for Goal Succession:
a) Achievement of current goal: Generally, goal succession takes place after the achievement
of the current goal. Organizations establish and operate their activities to achieve goals.
Therefore, without goals, there will be no meaning in the existence of an organization. Do, a new
goal must be defined. For example, if we have currently a goal of ‘increasing 30% markets
share’, after achieving this goal, we must set a new goal like ‘increasing 20% markets share’, it
is goal succession.
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b) Unachievement of a goal : If the current goal is impossible to achieve even after hard work
and proper utilization of resources, a current goal must be changed, and the goal succession
takes place. If the original goal of ‘reducing cost by 50%’ is impossible to achieve, a new goal as
‘reducing cost by 10%’ may be determined as a new goal.
c) Environmental changes : Environmental influences organization environment is ever-
changing. Therefore, forecasting future changes may not be accurate. If sudden changes in the
environment occur, an existing goal must be changed to adapt to the environment and goal
succession takes place.
d) Scarcity of resources : If currently available resources are not sufficient for achieving an
existing goal and are impossible, an original goal must be changed. Goal succession takes
place.
e) Changes in organizational needs and priorities : Goal succession also takes place when
organizational needs and priorities are shifting. With the change in organizational priorities,
goals are modified or changed.
Conclusion: Organizations should adapt its goal to the changes and development in the
environment.Goal succession is necessary to replace or change existing goals
Goal Displacement
Goal displacement, as originally defined by Robert Michele in 1911, is the phenomenon by
which the original and often radical or idealistic goals of an organization are displaced by the
inferior goals required to maintain the organization and keep its leadership in power.
According to Adam Jeffierys, “goal displacement is the tendency of organization to
substitute alternate goals for the goals the organization was established to serve. The new
goals often serve the interest of the organization’s employees or leaders.
Eg. An organization shifts its business firm manufacturing to import export business because
of establishment of many manufacturing organization and high competition.
a) Abstract and vague goal
If the current goal is abstract, vague, unclear, or ambiguous, a new goal must be formulated in
the place of the original goal. For example, a goal as ‘achieving maximum profit’ is an unclear
goal. There is a question like how much profit? But, goal as ‘achieving 10% profit’ is a clear goal.
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b) Attitude of employees: Sometimes employees may totally be negative towards the current
goal. If an employee’s attitude is negative, there will not be chances of implementation and
achievement of the current goal, and the goal must be changed.
c) Conflicting goal: Sometimes, individuals (employees) may give over attention and emphasis
on personal goals rather than organizational goals. Then, organizational goals conflict with
individual goals, In such a situation, goal displacement takes place.
d) Bureaucratic difficulties and strict rules : When priority to achieve is strict rules and
regulations in organization, employees give less priority to goal result of which goal
displacement takes place.
e) Incompatible organizational goal with subordinate goal: when organizational goals is
incompatible and conflicting with subordinates goal than organizational goal, goal
displacement takes place.
f) formulation of two sets( vague) goals: When managers formulate two sets goal ie. Real goal
and stated goal, they inclined to real goal. Hence, real stated goal is displaced.
Conclusion:Organizations should adapt its goal to the changes and development in the
environment.Goal displacement is necessary to displace or change existing goals
Changing prospectus of organization
Over the years, there have been major changes in the way organization are viewed and
managed. The changing prospectives of modern organization are discussed below.
1. Changing structure: The traditional structure centralized power and keeps control as the
organization grows. The modern structure reduces management layers and decentralisation
the power and authority to departments. It gives organization more flexibility, encourage co
operate , reduce communication barriers, effective control system and high satisfaction to
human resources.
2. Changing culture and values: organizations seeking to become more adaptive and
innovative. Traditionally, focused on operational excellence and efficiency. In modern
organization lay great emphasis to value such as customer satisfaction, the quality
improvement, human resources management, and social welfare.
3. Employees participation and teamwork: Today's organization focused on teamwork, and
provide chance to employees of different levels involvement in decision making and problem
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solving
4. Learning organization : Modern organization operate in a dynamic and complex
environment. The organization skilled at creating, acquiring and transferring knowledge and
modifying employees behaviour to reflect new knowledge insights are learning organization.
5. Workforce diversity : Workplaces nowadays have started to embrace diversity and inclusion
programs to enhance company culture.Modern organization focused on workforce is diverse
and inclusive as it promotes equality, enhances employee engagement, builds positive
workplace relationships, and employee job satisfaction.
6. Changes in national boundaries : Today's business is not limited to one country. They are
offering their goods and services in different countries. Due to a lot of competition, it is difficult
for the organization to provide its services to other countries. Modern organization is trend to
expand their business services beyond the national boundaries.
7. Technological change : Today's age is the age of technology. Technology in the world is
changing at a very fast pace. It reduces the operational costs of the organization and increases
the work efficiency. But, it has become very difficult to manage human resource in the
organization. Modern organizations develop strategies keeping technology change in mind.
8. Corporate social responsibilities : Corporate social responsibility (CSR) is a business
practice that considers the impact a company has on society, employees, and other
stakeholders. A CSR strategy is implemented by an organization to: minimize harm, practice fair
business, be responsible along a global supply chain, exercise philanthropy and create a self-
oriented human resource management system.
9. Corporate sustainability : corporate sustainability is a comprehensive approach to business
management that works to maximize long-term economic, social, and environmental value.
Sustainability aims to leave systems capable of continued existence.
Old question
Brief questions answer
1. What is organization? (2079)
2.What is goal displacement? ( 2078)
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3. What does effective goal mean? ( 2077)
4.Why original goals are displaced? (2076)
5.What is organizational goal? ( 2075)
6. In what situation the goal displacement is occurred? (2074)
7.State four problems of goal formulation. (2073)
8. State any four features of organization.(2072)
9. Point out four situations for the goal displacement to take place. (2071) .
Short answer questions
What is organization goal? Why goal succession and goal displacement required? Explain.
(2079)
What is organization? Explain the changing prospectus of organization. ( 2078)
What is goal succession ? Give an appropriate example of goal succession.(2077)
How goal displacement takes place ? Explain the condition responsible for goal succession.
(2075)
Define organization. Explain the features of Organizational goals. (2073)
Explain the problem faced by managers during goal formulation. 2072)
Elaborate the purposes of organizational goal. (2072)
What is goal succession? Explain the conditions under which goal succession occurs. (2071)
Long answer questions
The success of organization largely depends on proper formulation and implementation of
planning. In the light of this statement, discuss the tools for planning.
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