Goals serve as the aim of one’s actions and motivate people towards attainment of a desired results. Goals and motivation are inter wined as it has been observed that people are motivated to work when they are given a certain goal to achieve rather than dictating them and constantly telling them to give their best. In case of an organization, it is important to set goals to guide the organizational activities and make sure that all the efforts are concentrated towards same direction (Turkay, 2014).
Strategic goals are related with overall business operations. They provide direction and vision towards which the company should move to get the desired results that may be increased profitability, reduced cost, increased market share or increased customer base. They provide answer to why the company is existing and operating. The strategic goals cannot be set on the basis of particular department or unit. They are based on the overall organizational scenario and are prepared for comparatively longer time period. The strategic goals may address the issue of market standing, innovation, human resources, financial resources, physical resources, productivity, responsibility of profit requirement (Essays, 2015).
Unlike strategic goals, financial goals address only the financial goals. They are mainly related with increasing profit and decreasing costs. Financial goals are more concrete, specific and measurable than strategic goals. Because of the quantifiable, visibility and tangibility, the financial goals often become the focal point for dispute and tension at higher levels of organization (Donalson, 1985). Cash flow, credit worthiness, growth on earning, return on investment, dividend growth etc. are the areas covered by financial goals.
For example: The strategic goal of an organization is diversifying the revenue stream. The financial goal to support this strategic goal is to increase the revenue by 20% by introducing new products targeted to a newly identified market segment. From this example, we can see that the strategic goals and financial goals are related with each other. The financial goals help in the attainment of strategic goals. Strategic goals set what the company ultimately wants to achieve and financial goals set the short and long-term financial targets the company needs to meet in order to attain the strategic goals. Strategic goals provide vision and financial goals provide a mechanism to check whether the efforts are moving towards the right direction or not and take corrective measures in case of deviation. Thus it is important to set both strategic and financial goals.
References
Donalson, G. (1985). Financial Goals and Strategic Consequences. Harvard Business Review . Retrieved from hbr.org/1985/05/financial-goals-an...
Essays. (2015, November 27). The Difference Between Financial Objectives and Strategic Objectives. Retrieved from essays.pw/essay/the-difference-bet...
Goals serve as the aim of one’s actions and motivate people towards attainment of a desired results. Goals and motivation are inter wined as it has been observed that people are motivated to work when they are given a certain goal to achieve rather than dictating them and constantly telling them to give their best. In case of an organization, it is important to set goals to guide the organizational activities and make sure that all the efforts are concentrated towards same direction (Turkay, 2014).
Strategic goals are related with overall business operations. They provide direction and vision towards which the company should move to get the desired results that may be increased profitability, reduced cost, increased market share or increased customer base. They provide answer to why the company is existing and operating. The strategic goals cannot be set on the basis of particular department or unit. They are based on the overall organizational scenario and are prepared for comparatively longer time period. The strategic goals may address the issue of market standing, innovation, human resources, financial resources, physical resources, productivity, responsibility of profit requirement (Essays, 2015).
Unlike strategic goals, financial goals address only the financial goals. They are mainly related with increasing profit and decreasing costs. Financial goals are more concrete, specific and measurable than strategic goals. Because of the quantifiable, visibility and tangibility, the financial goals often become the focal point for dispute and tension at higher levels of organization (Donalson, 1985). Cash flow, credit worthiness, growth on earning, return on investment, dividend growth etc. are the areas covered by financial goals.
For example: The strategic goal of an organization is diversifying the revenue stream. The financial goal to support this strategic goal is to increase the revenue by 20% by introducing new products targeted to a newly identified market segment. From this example, we can see that the strategic goals and financial goals are related with each other. The financial goals help in the attainment of strategic goals. Strategic goals set what the company ultimately wants to achieve and financial goals set the short and long-term financial targets the company needs to meet in order to attain the strategic goals. Strategic goals provide vision and financial goals provide a mechanism to check whether the efforts are moving towards the right direction or not and take corrective measures in case of deviation. Thus it is important to set both strategic and financial goals.
References
Donalson, G. (1985). Financial Goals and Strategic Consequences. Harvard Business Review . Retrieved from hbr.org/1985/05/financial-goals-an...
Essays. (2015, November 27). The Difference Between Financial Objectives and Strategic Objectives. Retrieved from essays.pw/essay/the-difference-bet...
Turkay, S. (2014). Setting Goals: Who, Why, How? Retrieved from Harvard University: vpal.harvard.edu/publications/sett...