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Important Factors Affecting an Objective Formulation

Size of the organization:

Bigger size makes that objective formulation process complex.

Value system of top management :

  • The objective formulation is affective by the value system of top management. Their philosophy,attitudes,aspiration and needs influence objective.
  • Philosophy reflects the creed of the organization. It specific basic beliefs,values,aspiration and philosophical priorities of managers.

Level of management :

Organizational objectives are set by managers. Different levels of managers set different kinds of objectives.

  • Top level managers(board of director/general managers) :They are involved in determining vision,mission,strategy and overall objectives.

  • Middle level managers (SBU managers ):They are involved in setting key result area objectives for strategic business units.
  • Lower level managers (Functional heads):They are involved setting specific operational objectives for functions.

Organization culture :

Culture is a system of shared set of values,beliefs and norms that guide behavior.

Organization culture is indicated by autonomy,mutuality of interests,climate of trust,feeling of belongings,team work,open communication,collaboration,performance based reward system risk taking and human focus.

Objective formulation is affected by organizational culture.

Environment forces:

External environment forces affect objective formulation. They ca be:Political, such as government policies and regulation,lows. Economics,such as competition in the market place an economics polices Social-cultural, such as population forces and social cultural values. Technological,such as level of technology0gy and speed of technical change. Internal environmental forces that affect objective formulation are resources availability,competency and power relationship within the organization.

Past situation :

The objective formulation process is very much affective by situational variable.

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Objectives deffer according to situation. Situation keep on changing. So do objectives. Past situation of the organization serve as precedent for objective formulation.

There have been numerous papers written on the subject of firm specific resources and their link to sustainable competitive advantage for a firm. I will start by explaining some key terms that will be used in the analyses of firm-specific resources. I will then outline the internal factors, and their effect on an organisations performance. Finally I will focus on the resource-based view of the firm in order to critically evaluate the role of firm specific resources. Strategy Formulation Strategy formulation is a process in which an organisation must;

  • Evaluate current performance Review corporate governance
  • Scan the external environment • Scan the internal environment
  • Analyse internal and external factors
  • Generate, evaluate and select the best alternative strategy Strategy Implementation is the sum total of activities and choices required for the execution of a strategic plan. It is the process by which strategies are put into action through the development of programmes, budgets and procedures (Wheelen and Hunger 2004)

Internal Factors : Corporate Governance Internally, an organisation consists of Top Management and a Board of Directors who act as internal mechanisms.

Top management’s responsibilities are to provide executive leadership and vision and manage the strategic planning process. The Board of Directors on the other hand must monitor top management, evaluate them, and formulate strategy. Every board of directors has five responsibilities;

  1. Setting corporate strategy, overall direction, mission or vision
  2. Hiring and firing the CEO and top management
  3. Controlling, monitoring, or supervising top management
  4. Reviewing and approving the use of resources
  5. Caring for Shareholder interests…

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Important Factors Affecting an Objective Formulation. (2020, Jun 02). Retrieved from

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