Purposes of Organizational Goals

Purposes of organizational goals are to provide direction to employees of the organization. Strategic goals are set by and for top management of the organization. Tactical goals are for middle managers to focus on the actions necessary to achieve goals. An organization with a clear purpose or mission is one that is easy to understand and manage. A common purpose unifies employees and helps them understand the organization’s direction. From a manager’s perspective, operations will be successful if a common purpose is made clear across the organization to create a coordinated effort of resources. Edgar Schein, a prominent organizational psychologist, identified four key elements of an organization’s structure: common purpose, coordinated effort, division of labor, and the hierarchy of authority. Each of the four elements represents an essential component of an effective structure. Hierarchy determines the formal, position-based reporting lines and expresses who reports to whom.

Organizational goals inform employees where the organization is going and how it plans to get there. When employees need to make difficult decisions, they can refer to the organization’s goals for guidance. Goals promote planning to determine how goals will be achieved. Employees often set goals in order to satisfy a need; thus, goals can be motivational and increase performance. Evaluation and control allow an organization to compare its actual performance to its goals and then make any necessary adjustments.

According to Locke and Latham, goals affect individual performance through four mechanisms;

• goals direct action and effort toward goal-related activities and away from unrelated activities.
• goals energize employees. Challenging goals lead to higher employee effort than easy goals.
• goals affect persistence. Employees exert more effort to achieve high goals.
• goals motivate employees to use their existing knowledge to attain a goal or to acquire the knowledge needed to do so.