3. Performance Standards: Objectives provide standards against which performance of the organisation, 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 organisation. Such control measures not only ensure the achievement of organisational objectives by taking corrective actions, if needed, but also put a psychological pressure on those who are responsible for achieving the organisational objectives.
4. Basis for Decentralisation: Decentralisation includes assigning decision-making authority to lower-level people, thereby a subordinate is given considerable leeway in deciding to perform his work. Decentralisation is necessary for large-size organisations. However, independent decision-making authority to subordinates may lead to disintegration of the organisation unless there is a clear indication of the contributions of each unit towards the realisation of common objectives. Objectives indicate the contributions to be made by each unit for typing them effectively and allowing the managers concerned to exercise their individual skills and initiative.
5. Integrating Organisation, Group and Individual: Clearly specified objectives may provide integration of organisation and its various groups and individuals. An organisation cannot exist apart from its individuals, and various groups associated with it, such as creditors etc. If the objectives are clear, these will communicate the relationship between the organisation and various groups and individuals. Therefore, the individuals and groups can better be integrated because they have clear basis for dealing with the organisation.
Q.5. What do you mean by setting of objectives? (2015)
Ans. Objective Setting: Virtually all organisations have a formal, explicitly recognised, legally specified organ for setting the initial objectives or their amendments. Generally top management determines the overall objectives which the members of the organisation unite to achieve. In some organisations, the objectives may be set by the vote of the shareholders, in others, by a vote of the members, by a small number of trustees or by a few individuals who own and run the organisations. In large corporate entities, such bodies as board of directors, governing board, executive committee may set the objectives. These bodies may formulate or change the objectives according to the needs.
In practice, the objectives are set in a complicated power play involving various individuals and groups within and without the organisation, and by reference to the values which govern behaviour in general and the specific behaviour of the relevant individuals and groups in a particular society. There are many factors which enter into the struggle to determine the organisational objectives. From management point of view, these factors may be value system of managers, particularly at the top level, organisational strengths and weaknesses, and external environment. As such, while setting the organisational objectives, managers should take into account all these factors. On the basis of this interaction, management should set the general objectives. The general objectives are quite broad in nature and show the direction in which the organisation will like to proceed. For example, the general objectives of the business organisations may be survival, growth, contribution to the need of the society, profit earning etc. These objectives may not be mutually exclusive, rather these can be achieved simultaneously. It is the question of giving relative importance to these.
General objectives are too broad and sometimes intangible to be transformed into action. As such, within the framework of general objectives, managers determine the specific objectives which they and their units of the organisation will seek to attain. Most of these objectives tend to be of shorter range in character and have definite time limits within which the organisation has to achieve them. The specific objectives may prescribe the manner in which the general objectives may be achieved as there is always an end-means chain. These objectives may be in the form of diversification of the firm, liquidation of unprofitable divisions, reorganisation of the company etc. For example, a company has defined its specific objectives as expansion of present range of product, higher sale targets, import subtitution, reducing cost without affecting the quality of the product, and expanding range of markets. These specific objectives may fulfil two criteria. First, translating
Of general objectives into specific objectives should be tangible and meaningful. As far as possible. These objectives should be easily measurable as organisational performance is measured against these objectives. Second, short-term objectives should contribute to the long-term objectives. In fact, the time-bound objectives are set to make the achievement of long-term objectives more feasible. For example, long-term objectives involving plans for the distant future may fail to make individual objective tangible and meaningful standards for control. This can be overcome by setting short-term objectives as different steps or stages of long-term objectives.
Q.6. Give the responsibilities of top management.
Ans. Responsibilities of Top Management
Some of the major responsibilities of top management are given as follows:
1. Planning: Objectives are the goals that management wants to achieve and planning is the process to accomplish these objectives. It is a road map of improvement. Planning should be realistic based and framework within which a new strategy will be implemented. But it is evident that mostly top management considers planning as the starting point only not as the integral part of managing necessary tasks. Top management assigns the planning process to planning department yet it plays a vital role in recognising the hidden opportunities and clear understanding of goals, market and competition.
2. Finance Management: Managers at the top level look after the financial viability of the enterprise and are responsible for budgetary issues as well as resource handling and mobilisation. They are the ones in a position to assess the profitability of a business and are directly responsible to the shareholders of a business. Top management is expected to lead the organisation, and to help it to achieve growth. Certain executive powers such as decisions of mergers, acquisitions takeovers and loans are reserved for top management. Since top management holds decision-making powers, the success or failure of the business is the responsibility of the top management.
3. Resource Provider: Senior management shall determine the amount of resources necessary and provide the resources to carry out the activities of the organisation and to establish, implement, assess and continually improve the management system.
4. Organising: It is the act of arranging certain elements following some rules. The entire role of organising is to achieve the overall completion of organisation’s objectives. It is obligatory to organise all kind of resources including men, material, money and machine to make the optimum use in achieving certain specialisation. This specialisation can be achieved through employing different tasks to specific people who are specialists in that area. Top management’s ability to organise all resources well helps in expanding business.
5. Controlling: This is one of the foremost managerial functions like planning and organising but it is continuous, and can be entrenched at any of hierarchy. It is very important for the top management to check the errors, own mistakes and then take the corrective action so that deviation from standards should be visualised clearly and declared purposes will be attained in a preferred mode.
6 Policy Developer: Senior management shall develop the policies of the organisation. The policies shall be appropriate to the activities and facilities of the organisation.