What do you mean by goal setting
A goal hierarchy represents a ranking of the goals to be striven for in a company. It is characterized by the formulation of main, intermediate and sub-goals. The relationships between the individual goals should be complementary (goal complementarity) so that the achievement of one goal does not endanger or even exclude the achievement of another goal. Complementary target relationships are less common in practice than competing (CE target conflict, target competition) or indifferent target setting (CE target indifference, target neutrality).
The goal-means analysis or ends-means analysis is about a hierarchical order of goals and means. One does not limit oneself to the isolated consideration of a goal-means-relationship, but tries to fathom causal goal-means-chains, in which it then depends on the level of observation whether a link is interpreted as an end or as a means. Means can consequently also be understood as sub-goals for the achievement of over-arching goals, so that a goal hierarchy results. A well-known example of such a target hierarchy is the ROI key figure system. When using the goal hierarchy, it should be noted that there is often incomplete information about the goals to be achieved. So one only has uncertain expectations about which goals should be striven for or how goals can be achieved with a means. Furthermore, attention must be paid to the time element. Targets must also be taken into account, the later realization of which is restricted or excluded. Thirdly, it should be noted that existing resources strive to be used. This gives you an intrinsic value that is independent of any set goals.
Ranking and accordingly Structure that the goals of banks have in their target systems.
This means that goals of higher-level decision-making levels ("overall goals") shape both the selection of means at these levels and the selection of goals at a lower level ("sub-goals"). In other words: the goal of a decision-making level is the means at the next higher decision-making level (goal-means hierarchy). The target hierarchy represents the backbone of all marketing planning. The sequence of the individual planning and control activities defined in the target hierarchy is in reality mostly not processed in a continuous flow, but in a multitude of loops.
The totality of the goals pursued by a company, whereby the goals of the middle and lower corporate levels are in a means-end relationship to the highest corporate goals, i.e. they form a goal hierarchy.
In a complex corporate organization, a clear hierarchy of corporate goals is important, which is characterized by increasing concretization and detailing on the one hand and by decreasing deadlines for target achievement on the other. A clear hierarchy of objectives ensures that the individual objectives as a whole are aligned with the overarching objectives. At the same time, it motivates the subordinate planning and decision-making levels, which can thus identify their sub-goals within the framework of the overall goal setting.
The goals set for a company must be achievable under the given circumstances (available resources, development of the environment, behavior of the competition). On the other hand, they should represent a challenge for the company, its management and its employees. The goals must also be sufficiently specified and measurable so that their achievement can be monitored. After all, the various corporate goals must be compatible with one another.
Since in the end sufficient profit making is decisive for the existence of the company, the growth and product goals are not the only dominant goals. Just as sensible planning is a combination of a top-down and bottom-up approach, the various planned goals must also be linked with one another.
The targets with which the company management has to deal specifically are characterized by the fact that they do not presuppose any direct product-market relationships. If the corporate parent company does not appear directly on the market with its own products, it will only deal globally with objectives for product-market combinations and concentrate more on the financially oriented objectives of returns and debt levels. They represent important requirements for further strategic planning of the company.
It is the task of the company management to define the company philosophy and the corporate policy model. The company policy defines generally applicable, mostly unrestricted, overarching objectives, which are reflected in the company's purpose as well as in corporate policy guidelines. Such corporate principles, which are not directly related to specific situations, are intended to provide guidance for business policy and thus also for planning.
The starting point for formulating corporate policy and corporate strategy is an analysis of the social environment, the socio-political framework and the values of the members of the company's management. The legal restrictions resulting from company law and the right of co-determination play a special role.
While the product goals are largely the responsibility of the operational company, the company management has to be more involved in the growth goals. From the company's point of view, growth appears necessary so that the company can maintain or even expand its market position in order to secure sufficient earnings potential in the context of the expected economic and market growth. In the case of highly diversified companies, the market position of the company can only be inadequately derived from the addition of the market position of the company companies in their relevant markets. In this context, the company's financial standing and its relative importance on the relevant financial markets are of particular importance.
The growth targets are specifically about diversification through the acquisition of companies or sub-businesses, the inclusion of new product groups, the development of new markets and the achievement of higher market shares. Growth targets to be specified by the company management can also be defined by correspondingly increasing return targets.
In the further process, the financially effective strategies are particularly interesting from the company's point of view, namely all goals and measures in connection with investments, capital resources and liquidity. The objectives for strategic planning to be set by management in each case relate to the group as a whole and to the individual
Corporate companies target return and the requirement for a financial framework to be adhered to.
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