4. Government Policy: Further goal of a company can be significantly affected by government policy. An MRTP company may not be allowed to expand its conventional low technology areas. A FERA company similarly may not be allowed to expand into low technology area without diluting its foreign equity holding to the required 40% level. Some industries, specifically identified and reserved for small scale sector, may not be available for large houses. These restrictions create serious constraints for large companies in setting higher goals. In most of these cases companies set their future goals approximately in accordance with their current corporate level, current market share and existing capacity.
5. Critical Input Supply: This is another factor affecting corporate goal. If critical inputs are in short supply, such short supply becomes the bottleneck factor. A cement manufacturing company which finds shortage in limestone deposits or finds difficulty in raising limestone, may tone down its production target and its sales and profit goals. Similarly, an aluminium company may expect power cut and electricity being one of the major inputs to aluminium industry, may decide to cut down its production and consequently sales. This may lead to lowering of profit goals.
6. Market: Even though price, product and market have been explained earlier as factors influencing corporate goal, because of market’s special importance it needs a special explanation. In fact the key issue here is the market segmentation and growth. If the market is growing, goal can be increased in accordance with such growth rate. If the market is expected to remain statement, the goal should be kept relatively at the previous level. As regards segmentation, the company should explore the possibility of product innovation for different segments and possibly sell such products at different prices. Sales goals and consequently profit goals should be consistent, with such innovations and differential prices.
7. Other Factors: There are in addition to the above, a host of other factors which can influence corporate goals. Factors which help in cost reductions (such as process improvement, quality improvement, technological development, new skills etc.) can directly lead to improvement in profit If a company expects that there are such areas of strength, profit, the goal may accordingly be set at a higher level.
Some objectives are like subordinates to others. Where there are multiple corporate objectives a problem of ranking can arise as there is never enough time or resources to achieve all of the desired objectives.
0.8. Discuss the various determinants of strategic advantages.
Ans. Strategic Advantages: Strategy is a process by which the strategists examine the various sources of funds and their application in an efficient manner, so that the resources are used efficient manner and no room is left for unnecessary lock-up of funds. The main aim of such analys is to study different outcomes and their respective challenges. The analysis provides a guard again risks Stevenson has suggested the following factors which should be carefully taken into account avoid losses and wastes.
|1.||Organisation||The capablilities and interest of top management. The prescribed (standard) procedure for action. The organizational planning framework. The various techniques of control. Organisational framework.|
|2.||Marketing||Status or reputation of product. Product size and quality.Life of the product. Consumer behavior – its needs, task and income group.Abilities of sales staff. Customers satisfaction by giving them services after sales.|
|3.||Personnel||Number of employees working in the organization. Experience of each emplouee. Technical ablilities required for each work. Attitude of employee.|
|4.||Technical||R & D programmes. Product improvement. Production development or improvement programme. Production Facilities.|