BMGT 300 – ORGANISATION THEORY

TOPIC FOUR: ORGANISATIONAL DESIGN, EFFECTIVENESS AND GOALS

This Topic will discuss 3 concepts that are important in ensuring efficiency in organisations.
These are Organisational design; organisational effectiveness and organisational goals.

ORGANISATIONAL DESIGN
Meaning
i. An organisational design is the process by which a manager selects and manages
elements of structure so that an organisation can control the activities necessary to
achieve its goals.
ii. Organisational structure is the formal system of task and activity relationship so as to be
clear to how people coordinate their actions and use resources to achieve organisational
goals.
iii. Organisational design is the process of aligning the structure of an organisation with its
objectives, with the ultimate aim of improving efficiency and effectiveness. Organisation
design can be triggered by the need to improve service delivery or specific business
processes, or as a result of a new mandate/changes.
iv. Organization Design is a process for shaping the way organizations are structured and
run. It involves many different aspects of life at work, including team formations, shifts
in lines of reporting, decision-making procedures, communication channels, and more.
Organization Design – and redesign – can help any type of organization to achieve its goals.
Sometimes, major re-organization is necessary. At other points, slight shifts in structures and
systems can ensure that an organization continues to thrive.

The impact of Organization Design on organisation performance

An organization's design must be right for it to operate efficiently and effectively, and its
structures and systems need to be aligned with its core strategies. There are many potential
benefits to having a design that suits the business and its people, and the environment in which it
operates. For example:
 Increased efficiency.
 Faster and more effective decision making.
 Improved quality of goods and services.
 Higher profits.
 Better customer relations.
 Safer working conditions.
 A happier, healthier and more motivated workforce.
 Greater preparedness for future challenges.

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However, if there are errors in its design, an organization can suffer serious problems, including:
 Ineffective problem solving.
 Wasted time.
 Lack of coordination between different parts of the business.
 Inconsistent quality of work.
 Failures of legal compliance.
 Reputational damage.
 Low morale, leading to high staff turnover.
 Below-target business-level results.

Objectives of organisational design

The objectives of organisational design are as follows:
i. Responding to change: Organisational design is triggered by the need to change. For a
firm to remain competitive, it must respond to changes in the environment as a result of
competition, technology, global economy, consumer needs, etc as well as the changes
from the internal environment of the organisation.
ii. Integrating new elements: As organisations grow, evolve, expand and respond to
changes, many new positions and departments will have to be added to deal with factors
in the external environment or with new strategic needs within the organisation. These
new elements will have to be integrated into the overall structure of the organisation
which means practically restructuring the organisation. For instance, the strategic need to
enhance quality of customer service may need dismantling of functional departments,
creating teams and re-delegating authority.
iii. Coordinating new components: After creating new departments, managers need to find
a way to tie all the departments together to ensure coordination and collaboration across
the departments. The departments have to work together either through reporting
relationships, cross-functional teams (teams made up of people from different
departments) or task forces in order to avoid conflicts and problems and to meet customer
needs.
iv. Encouraging flexibility: Organisational designers want to build into the organisation –
with all its authority, chains of command, bases of departmentalisation – flexibility for
decision making, for responding and redirecting resources and for focusing employee’s
talents towards achieving goals of the organisation. These will be achieved through
organisation design.

Importance of organisational design

Organisation design is important in organisations for various reasons:
i. Dealing with Contingencies: A contingency can be explained as an event that might
occur without any expectation, and the management should properly plan to meet such
contingencies. One such contingency is the changing business environment. The design
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 of an organization determines how efficiently it can control various factors in its
environment. Ability of an organization to attract and skilled employees, permanent
customers and government contracts are the examples of the degree to which it can
control those three environmental factors. The structure of an organization should be
designed in such a manner so as to increase control over its environment.
ii. Competitive Advantage: In the modern competitive age, every organisation wants to
design its structure in such a way as to have the maximum sustained competitive
advantage. Competition allows a company to develop a business strategy to out-perform
competitors by producing better products and services. The method of designing an
organisational structure is the important determinant in the implementation of an
organisation’s strategy.
iii. Innovation and Efficiency: Organisations that produce goods and services as per the
expectations of the people are successful. The design and use of new and more efficient
organisational structure is equally important in producing quality goods and services.
iv. Clarity: Adopting a sound organizational design is important for every business
regardless of the scale. It not only provides clarity in day-to-day operations but also in
making key decisions and other activities.
A well-crafted organization design outlines the role of each key player in the
organisation. As such, employees know their duties, who they should reach out to for
help, the timeframe for completing projects, the tasks that need to be prioritized, etc.
v. Growth: Creating a well-designed organization structure makes it easier for the
organisation to take advantage of growth opportunities, as compared to a firm that is
loosely organized. A good organization design incorporates technological infrastructure.
This way, if the company manager thinks of adding a new employee, there will already
be certain measures to follow in recruiting new people. An organization lacking solid
design will find it difficult to undertake such activities.
vi. Adaptability: A key feature of effective organization design is the capability to respond
to the constantly changing marketplace and industry conditions. While most leaders
prefer to focus on the business’ existing operations, the best organization design is one
that leaves room for new market trends. Ideally, the design should be flexible enough to
allow for any adjustments needed.

Principles of organisational design

Changes are happening all around us and at a rapid pace. All the drastic adjustments have left
very little room for complacency. Considering how inevitable changes have become, managers
need to focus on designing their organizations now more than ever. This way, they can transform
their companies to better meet the needs of their clients, employees, and other stakeholders.
1. The principle of definition: Organisation is basically concerned with defining the total
task involved, its grouping and establishment of relations in terms of responsibilities and
authorities. What is more important is that the divided duties and authorities are to be
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 clearly defined so that the role of each person in the organisation is made clear. This
avoids undermining of authority, confusion and chaos.
2. The principle of span of control: Span of control refers to span of supervision or
management or authority and responsibility. It stands for the number of subordinates
seeking direction, guidance and supervision from their immediate superior. It also refers
to the number of subordinates being supervised by one (1) superior. It is difficult to spell
out the exact number of persons reporting to a superior. The optimum number depends on
factors like ability of subordinates, ability of superior, extent and nature of delegation of
authority, clarity of plans and policies, communication and control techniques, etc.
3. The principle of informal relations: Strictly speaking, any organisational structure
defines official relations both horizontal and vertical, between the people. However,
successful organisation structure is one that recognizes not only official but also
unofficial or informal relations. These informal relations represent an invisible network
of alliances or the spheres of influence among the employees working in the organisation.
4. The role of informal relations in passing on the information up and down the levels of
organisation cannot be underestimated. In fact informal relations which build team-spirit
and good-will should be recognised and formalized; however the informal relations
recognised should not be undermine the formal structure.
5. The principle of flexibility: Organisation is the structure of relations a system of
working rapport. Such an arrangement cannot afford to be rigid and water-tight.
Organisation should not be assumed to be static or immovable. The organisation should
be adaptable to the changing conditions to facilitate responses to competitive and
customer moves. Flexibility in organisation is indicated in its procedure which is easy to
understand, follow and change; in its managerial proneness to planning and accepting the
challenges of change.
6. The principle of information flow: Information is the life-blood of any organisation.
Thus, organisation structure should facilitate two-way flow of information from top to the
bottom and back in the organisation. In addition, the flow of information is expected to
be authentic, adequate and timely.
7. The principle of cost-effectiveness: The organisation so structured must be cost
effective to avoid undue duplication of efforts or excesses of staff. Therefore, the merits
of specialisation by functions, products and markets should be clearly evaluated.
8. The principle of coordination: Coordination is opposite of conflict. Coordination of
activities is essential to the successful implementation of plans, among all the functional
areas/departments in the organisation. As organisations expand and gets highly
specialised, the problems of coordination and communication becomes more complex.
9. Specialization principle: This principle states that boundaries should exist to encourage
the development of specialist skills.
10. Knowledge and competence principle: This principle states that responsibilities should be
allocated to the person or team best fit to do them. This means that tasks are retained by
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 higher levels based on their knowledge and competitive advantage. If this is not the case,
they should be positioned lower in the organization. This means that the CEO should not
be involved in every decision – especially not decisions that involve specialists with
much more subject-matter knowledge. The CEO is there for the big picture and to
balance complex decisions that impact the organization and strategy.
11. Innovation and adaptation principle: This principle states that organizational structures
should be sufficiently flexible to adapt to an ever-changing world. The test here is that the
organizational design will help the development of new strategies and to adapt to future
changes.

Factors Affecting Organizational Design

Although many things can affect the choice of an appropriate structure for an organization, the
following five factors are the most common: size, life cycle, strategy, environment, and
technology.
1. Organizational size: The larger an organization becomes, the more complicated its
structure. When an organization is small — such as a single retail store, an MPesa shop,
or a restaurant, etc — its structure can be simple.
In reality, if the organization is very small, it may not even have a formal structure.
Instead of following an organizational chart or specified job functions, individuals simply
perform tasks based on their likes, dislikes, ability, and/or need. Rules and guidelines are
not prevalent and may exist only to provide the parameters within which organizational
members can make decisions. Small organizations are very often organic systems.

As an organization grows, however, it becomes increasingly difficult to manage without

more formal work assignments and some delegation of authority. Therefore, large
organizations develop formal structures. Tasks are highly specialized, and detailed rules
and guidelines dictate work procedures. Inter-organizational communication flows
primarily from superior to subordinate, and hierarchical relationships serve as the
foundation for authority, responsibility, and control. The type of structure that develops
will be one that provides the organization with the ability to operate effectively. This
explains why larger organizations are often mechanistic—mechanistic systems are
usually designed to maximize specialization and improve efficiency.
2. Organization life cycle: Organizations, like humans, tend to progress through stages
known as a life cycle. Like humans, most organizations go through the following four
stages: birth, youth, midlife, and maturity. Each stage has characteristics that have
implications for the structure of the firm.
 Birth: In the birth state, a firm is just beginning. An organization in the birth
stage does not yet have a formal structure. In a young organization, there is not
much delegation of authority. The founder usually “calls the shots.”

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  Youth: In this phase, the organization is trying to grow. The emphasis in this
stage is on becoming larger. The company shifts its attention from the wishes of
the founder to the wishes of the customer. The organization becomes more
organic in structure during this phase. It is during this phase that the formal
structure is designed, and some delegation of authority occurs.
 Midlife: This phase occurs when the organization has achieved a high level of
success. An organization in midlife is larger, with a more complex and
increasingly formal structure. More levels appear in the chain of command, and
the founder may have difficulty remaining in control. As the organization
becomes older, it may also become more mechanistic in structure.
 Maturity: Once a firm has reached the maturity phase, it tends to become less
innovative, less interested in expanding, and more interested in maintaining itself
in a stable, secure environment. The emphasis is on improving efficiency and
profitability. However, in an attempt to improve efficiency and profitability, the
firm often tends to become less innovative. Stale products result in sales declines
and reduced profitability. Organizations in this stage are slowly dying. However,
maturity is not an inevitable stage. Firms experiencing the decline of maturity
may institute the changes necessary to revitalize.

As the life‐cycle concept implies, a relationship exists between an organization's size and
age. As organizations age, they tend to get larger; thus, the structural changes a firm
experiences as it gets larger and the changes it experiences as it progresses through the
life cycle are parallel. Therefore, the older the organization and the larger the
organization, the greater it’s need for more structure, more specialization of tasks, and
more rules. As a result, the older and larger the organization becomes, the greater the
likelihood that it will move from an organic structure to a mechanistic structure.

3. Strategy: How an organization is going to position itself in the market in terms of its
product is considered its strategy. A company may decide to be always the first on the
market with the newest and best product (differentiation strategy), or it may decide that it
will produce a product already on the market more efficiently and more cost effectively
(cost‐leadership strategy). Each of these strategies requires a structure that helps the
organization reach its objectives. In other words, the structure must fit the strategy.
Companies that want to be the first on the market with the newest and best product
probably are organic, because organic structures permit organizations to respond quickly
to changes. Companies that elect to produce the same products more efficiently and
effectively will probably be mechanistic.
4. Environment: The environment is the world in which the organization operates, and
includes conditions that influence the organization such as economic, social‐cultural,

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 legal‐political, technological, and natural environment conditions. Environments are
often described as either stable or dynamic.
 In a stable environment, the customers' desires are well understood and probably
will remain consistent for a relatively long time. Examples of organizations that
face relatively stable environments include manufacturers of staple items such as
detergent, cleaning supplies, and paper products.
 In a dynamic environment, the customers' desires are continuously changing—
the opposite of a stable environment. This condition is often thought of as
turbulent. In addition, the technology that a company uses while in this
environment may need to be continuously improved and updated. An example of
an industry functioning in a dynamic environment is electronics. Technology
changes create competitive pressures for all electronics industries, because as
technology changes, so do the desires of consumers.

In general, organizations that operate in stable external environments find mechanistic structures
to be advantageous. This system provides a level of efficiency that enhances the long‐term
performances of organizations that enjoy relatively stable operating environments.
In contrast, organizations that operate in volatile and frequently changing environments are more
likely to find that an organic structure provides the greatest benefits. This structure allows the
organization to respond to environment change more proactively.

Advances in technology are the most frequent cause of change in organizations since they
generally result in greater efficiency and lower costs for the firm. Technology is the way tasks
are accomplished using tools, equipment, techniques, and human know‐how.

ORGANISATIONAL EFFECTIVENESS
Organizational effectiveness is defined as an extent to which an organization achieves its
predetermined objectives with the given amount of resources and means without placing undue
strain on its members.
Organizational effectiveness is defined as a concept to measure the efficiency of an organization
in meeting its objectives with the help of given resources without putting undue strain on its
employees. It is about how the company can produce the target quota of products, how efficient
its process is, and how much waste is produced.

Factors affecting organizational effectiveness

The factors that influence organizational efficiencies are
i. Casual variables – These are independent variables that can be altered by the
organization and its management, for instance, its policies, skills and behavior and

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 leadership and business strategies. The casual variables can determine the course of
development within an organization
ii. Intervening variables – These are motivation, performance goals, attitude, loyalty and
perception of the employees and their capacity for efficient decision-making,
communication, and interaction. The intervening variables show the health of an
organization.
iii. End-result variables – These are loss, costs, earnings, and productivity. The end-result
variables reflect the achievements of an organization.

Determinants of Organizational Effectiveness

There are many factors that contribute to an organization’s effectiveness and success. They
include:
1. People: Employees operate and manage organizations, so it is only natural that their
performance will affect an organization’s effectiveness. These areas can include:
 Skills: Skilled employees are faster, more productive, and more effective.
 Behavior: Organizational behavior can improve employee productivity or distract
from it. Employees that are cooperative, motivated and driven, for instance, will work
better together and produce better results than employees who are demotivated
 Culture: The culture of an organization is related to behavior. It includes the values,
beliefs, and assumptions of an organization. And it affects how they interact, work
together, and perform their jobs, among other things.
2. Processes and Systems: Business processes can be efficient, inefficient, slow, profitable,
or a mixture of all of these. Such processes can include:
 Workflows: An individual employee’s workflow can be efficient, inefficient, or
somewhere in between. How efficient that workflow is will affect their contribution
to the organization.
 Procedures: Established procedures, such as customer service interactions or internal
business procedures, can also be either effective or ineffective.
 Processes: A business process – a set of tasks, procedures, or activities – will also
affect the performance of a given business function.
Each organization is unique. This means that every organization should discover which
processes are the most profitable and effective for their unique situation.
3. Tools and Technology: Another determinant of organizational effectiveness is
technology. The right tools and technology can improve efficiency and results across
virtually every business function. But the wrong tools – or improper use of those tools –
can be ineffective and costly.
Examples of tools and technology include:
 Software: The right software, especially at the organisation level, can make a big
impact on business efficiency and effectiveness.

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  IT infrastructure: Modern IT systems, such as cloud computing or the IT hardware
used, can also affect the speed, efficiency, and effectiveness of many business
processes.
 Productivity and training programs: Digital tools/hardware can be very beneficial
but only if employees know how to use them properly. Employee training is an
essential contributor to business effectiveness.
4. Vision, Mission, and Strategy: Also, an organization’s high-level mission and strategy
will determine its effectiveness. These can include:
 The philosophy of an organization: What does the organization value? Is it strictly
focused on profit and competition? Or does it aim to add value to society or its local
community?
 Its market positioning: Market positioning – an organization’s strategic position
relative to competitors – will also affect organizational efficiency and profitability.
 Organizational strategy: Also, an organization’s high-level strategy will affect how
well the company performs within its market, its industry, and among its customers.
 All of the above will determine and contribute to many other areas of a business, from
its culture to the organizational structure.
5. Organizational Structure: How an organization is structured will also impact its
effectiveness. Common organizational structures include:
 Top-down/Mechanistic structures: Most of us are familiar with top-down
hierarchies and business structures. These include layers such as senior management,
middle management, and frontline employees. This structure contributes to
inefficiencies and resistance to change.
 Flat/Organic structures: Flat hierarchies reduce or remove the role of middle
management. These structures offer more autonomy and decision-making power to
frontline employees.
 Other structures: There are other types of organizational structures, such as matrix
structures or multi-divisional structures.

Approaches to Organizational Effectiveness

The concept of organizational effectiveness is not simple because there are many approaches in
conceptualizing this term. Such approaches can be grouped into following three approaches:
i. Goal Approach: Goal attainment is the most widely used criterion of organizational
effectiveness. In goal approach, effectiveness refers to maximization of profits by
providing an efficient service that leads to high productivity and good employee morale.
Several factors such as quality, productivity, efficiency, profit, turnover, accident rates,
morale, motivation and satisfaction, help in measuring organizational effectiveness.
ii. Internal Functioning Approach: This approach deals more narrowly with the internal
mechanisms of the organisation. The focus is on minimising strain, integrating
individuals and the organisation and conducting smooth and efficient operations. An
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 organisation that focuses primarily on maintaining employee satisfaction and morale,
minimising conflict and being efficient subscribes to this view.
iii. System Resource Approach: System-resource approach of organizational effectiveness
emphasizes on inter-dependency of processes that relate the organization to its
environment. The interdependence takes the form of input-output transactions and
includes scarce and valued resources such as physical, economic and human for which
every organization competes. This means that organisation effectiveness is dependent on
ability to acquire necessary resources from the environment.

Thus, discussion of organizational effectiveness leads to the conclusion that there is no

single indicator of effectiveness. Instead, the approach should focus on operative goals
that would serve as a basis for assessment of effectiveness.

ORGANIZATION GOALS
Meaning
i. Organizational goals are those ends that an organization seeks to achieve by its existence
and operation.
ii. Organizational goals are what an organization wants to achieve shortly. Goal
achievement is the destination of an organization. The goals of the organization help
every member of an organization to understand where the organization is going.
iii. Goals are objectives or aims for which an organization has formed. Setting the goals of
an organization is the initial function of the management. Goals are what an organization
comes into existence.
iv. According to Steers, Ungson, and Mowday, “Organization goal is a desired state of
affairs that indicates where the organization is going; a frame of reference for
understanding and evaluating what an organization does.”
v. According to Kast and Rosenzwing, “Goals represent the desire future conditions that
individuals, groups, and organizations strive to achieve.”
Goals are predetermined and describe future results toward which present efforts are directed.
Organizational goals are derived from the mission, corporate strategy is derived from the
organizational goals. Goals must specify the end results that are desired, that are measurable and
within a particular time frame. They must be (SMAC) goals; Specific, Measurable, achievable
and consistent

Meaning of Objectives:
Objectives refer to specific, measurable ends. They are identifiable goals towards which all
organisational activities are directed. They are the end results of the organisation’s operations.
Objectives are the specific targets or standards against which actual performance can be
measured

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Organizational objectives are short-term and medium-term goals that an organization seeks to
accomplish. An organization's objectives will play a large part in developing organizational
policies and determining the allocation of organizational resources. Achievement of objectives
helps an organization reach its overall strategic goals.

Differences between Goals and Objectives

Goals are the outcomes you intend to achieve, whereas objectives are the specific actions and
measurable steps that you need to take to achieve a goal. Goals and objectives work in tandem to
achieve success. If you create goals without clear objectives, you run the risk of not
accomplishing your goals.

The following are some major differences between goals and objectives:
i. Alignment and order: Goals are set to achieve the mission of an organization or
individual, while objectives are set for the accomplishment of goals. Goals are thus
higher in order than objectives.
ii. Scope: Goals are broad intentions and are often incapable of being measured in
quantifiable units. Objectives are narrower than goals and are described in terms of
specific tasks.
iii. Specificity: Goals are general statements of what is to be achieved. They do not specify
the tasks that need to be performed to accomplish them. Objectives, on the other hand,
are specific actions one takes within a certain timeframe.
iv. Tangibility: Goals can be intangible and non-measurable, but objectives are defined in
terms of tangible targets. For example, the goal to “provide excellent customer service” is
intangible, but the objective to “reduce customer wait time to one minute” is tangible and
helps in achieving the main goal.
v. Timeframe: Goals are set to be achieved over a long period, while objectives are meant
for a shorter time frame. A goal is usually divided into several objectives spread over
multiple time frames.
vi. Language: The language used in describing goals is more focused on conceptual
thinking, whereas that used in objectives is more on the creative side

Types of Goals
i. Official goals: These are the general aims of an organization as expressed in the
corporate charter, annual reports, public statements and mission statements. Their
purpose is to give the organization a favourable public image, provide legitimacy, and
justify its activities.
ii. Strategic Goals or Corporate Goals: These are long-term goals focusing on broad
terms. This goal is developed by top-level management. A strategic goal is a fundamental
goal of an organization, based on this goal, various short-term goals are developed to
achieve organizational missions.
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 iii. Tactical Goals: Generally, tactical goals are set by the middle-level managers but
sometimes it is also set by the top-level managers. This goal is developed to achieve the
strategic goals of an organization and the time frame of this goal is between 12-24
months depending on organizational goals.
iv. Operational Goals: Operational goals are very short-term goals. These goals are set by
lower-level managers as well as developed by middle-level managers for operational-
level employees (low cadre employees). It deals with short-term issues to achieve tactical
goals.

Importance of Organizational Goals

Every organization sets goals to achieve the desired destinations. Goals are the basis for
functioning the organizations. Following are the main purposes/importance of organizational
goals;
i. To Provide Guidance and Unified Direction: Goals are the basis for the future
performance of an organization. Managers of organizations provide proper guidance and
unified direction to their employees by considering their goals. This may help every
employee/member of an organization to understand where the organization is heading
for.
ii. To Promote Good Planning: Goals are the basis for planning. Good planning focuses on
goals. The manager formulates corporate, tactical, and operational plans by considering
organizational goals. Organizational resources are allocated based on goals. And, it also
helps in decision making.
iii. To serve as a Source of Motivation: Specific, realistic, and challenging goals serve as a
source of motivation for employees. Such goals are the basis of motivation for efficient,
skilled, and hardworking employees. Realistic goals can be achieved within a definite
time frame which will provide a reward to employees.
iv. To provide an effective mechanism for Evaluation and Control: Goals provide an
efficient way for evaluation and control of employee’s performance. They help to set a
standard of performance for an organization. When standard goals are achieved it is
assumed that performance is efficient. But, if actual performance is below the required
standard, it is essential to take corrective measures to improve future performance.
v. To provide distinct Image and Identity: Sound and realistic goals provide a distinct
image and identity to an organization among the public. This facilitates the attraction of
efficient and competent employees in organizations. The involvement of skilled
employees helps maximize productivity and improves the quality of goods and services
of an organization
vi. Focus attention of individuals and groups to specific activities and efforts of
organisations: When organisation’s goals are known to individuals and group, it will
help them in channel their activities towards attaining organisation’s goals.

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vii. Provide a source of legitimacy to action by members: Once goals have been decided
for individuals and the groups, they will promote legitimacy and justification to
individual’s or group’s actions and decisions.
viii. Serve as a Standard of Performance: Goals provide a measure of individual’s or
group’s performance. They may help the organisation employees to evaluate the level of
their performance in the perspective of organisation’s goals.

Characteristics of organisation goals

Goals are part of every aspect of business/life and provide a sense of direction, motivation, a
clear focus, and clarify importance. By setting goals, you are providing yourself with a target to
aim for. A SMART goal is used to help guide goal setting. SMART is an acronym that stands for
Specific, Measurable, Achievable, Realistic, and Timely. Therefore, a SMART goal incorporates
all of these criteria to help focus your efforts and increase the chances of achieving your goal.

SMART goals are:

Specific: Well defined, clear, and unambiguous
Measurable: With specific criteria that measure your progress toward the accomplishment of the
goal
Achievable: Attainable and not impossible to achieve
Realistic: Within reach, realistic, and relevant to your life purpose
Timely: With a clearly defined timeline, including a starting date and a target date. The purpose
is to create urgency.

Specific SMART Goals

Goals that are specific have a significantly greater chance of being accomplished. To make a
goal specific, the five “W” questions must be considered:
 Who: Who is involved in this goal?
 What: What do I want to accomplish?
 Where: Where is this goal to be achieved?
 When: When do I want to achieve this goal?
 Why: Why do I want to achieve this goal?

For example: I will increase revenue while cutting down on expenditure by moving to a more
affordable premise that will cut my rent by 7% thus reduce operational costs.

Measurable SMART Goals

A SMART goal must have criteria for measuring progress. If there are no criteria, employees
will not be able to determine their progress and whether they are on track to reach their goals. To
make goals measurable, employees should be able to ask themselves the following:
 How many/much?
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  How do I know if I have reached my goal?
 What is my indicator of progress?

For example: I will increase sales over the next 3 months by signing in 5 more potential clients.

Achievable SMART Goals

A SMART goal must be achievable and attainable. This will help employees to figure out ways
they can achieve that goal and work towards it. The achievability of the goal should be stretched
to make employees feel challenged, but defined well enough so that they can actually achieve it.
Employees should ask themselves::
 Do we have the resources and capabilities to achieve the goal? If not, what are we
missing?
 Have others done it successfully before?

For example: I will improve my current customer relationships and promote the business through
referrals, networking and through social networks. This will help me find more leads and
therefore see to an increase in revenue for the business.

Realistic SMART Goals

A SMART goal must be realistic in that the goal can be realistically achieved given the available
resources and time. A SMART goal is likely realistic if employees believe that it can be
accomplished. Employees should ask themselves:
 Are the goals realistic and within reach?
 Are the goals reachable, given the time and resources?
 Are they able to commit to achieving the goal?

For example: Plans to increase sales by 25% in 2022 (Realistic) as opposed to increase by 60%

Timely SMART Goals

A SMART goal must be time-bound in that it has a start and finish date. If the goal is not time-
constrained, there will be no sense of urgency and, therefore, less motivation to achieve the goal.
Employees should ask themselves:
 Do our goals have a deadline?
 By when do we want to achieve our goals?

For example: I will start my business by January 2022

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