Ch#9 Decision

ObjectivePresented to: Dr NaveedPresented by: Rabia Qamar

What is Objectives??

0A path-way that leads towards goals….

Decision Objectives

oManagers cannot possibly judge how far the preferred option will go towards achieving their objective.

oWithout the indication of extent to which each option fulfills the objectives of decision

Types of objectives

0Primary objective0Strategic objective0Operational objective

Primary Objective

0Reflects the fundamental reason for the organization's being.

0Objectives are likely to include survival of company, independence from outside control, profit and desire for growth.

Strategic Objective

0Guide the organizations long term direction towards the achievement of primary objective.

0 It could include developing innovative products, fund projects only from internally generated profits and so on….

Operational Objective

0 Interpret an organization’s strategic objectives into manageable terms for shorter term decision making.

0 It includes such things as controlling budgets tightly, keeping unit cost low, giving good delivery…..

Whose Objectives??

0Who is chosen to articulate those objectives??0 Is it organization’s manager who best reflects its goal

and if so manager?0 Is it company’s board of directors?

The Characteristics of Decision Objectives

0Strategic and operational decision0Multiple objectives0 Implicit & explicit objectives0Efficiency & effectiveness0Changing objectives0 Intrinsic & extrinsic objectives

Strategic & Operational Objectives

Primary Objectives

Appropriate

Strategic Objectives

Appropriate & consistent?

Operational Objectives

The Means- Ends Chain

0Objectives exists at different levels in an organization, then, what is an objective to one decision maker will be a means of achieving a higher objective to a higher decision maker.

Multiple Objectives

0An organization’s objectives are not always immediately apparent or clear to an outsider

0Organization goals are ambiguous and contradictory because organization have more than one objective

Implicit and Explicit Objectives

0Objectives may form an ‘invisible hand’ which shapes decision towards ultimate goals in quiet and non-obvious way

0Objectives can be clearly stated ‘signposts’ which are seen by all decision makers pointing the way in an unambiguous manner towards the company goals

Important points for explicit objectives

0Do objectives state what the organization does not want to do?

0Are the objectives a useful guide to action?0Are the objectives reasonably comprehensive?

Efficiency and Effectiveness

The organizational

unit

EfficiencyOutput per

unit

Out put(Goods

or services)

Input resources

(PeopleMaterials)

Organizational UnitInput

Efficiency

OutputEffectiveness

characteristics of output and

efficiency of its creation

Efficiency and Effectiveness

Changing Objectives

0Change occurring in the organization’s environment0Change occurring in the organization itself

Setting Decision Objectives

0Objective should be clear0Objectives should be consistent0Objectives should be agreed0Formulation of objectives State clearly and ambiguouslyFully understood by all decision makers

Criteria For Sensible Objective

0Necessity0Practicability 0Relevance0Measurability