CHAPTER 10

TASK 3: SETTING
STRATEGIC OBJECTIVES
PRESENTED BY:
JAYVEE C. LOZADA BSE 3-A
After reading and studying the chapter, the learner should be able to:

 Explain the concept of strategic objectives;

 Describe the concept of strategic intent and strategic thrust
 Characterize what is considered strategic objectives
 Discuss the objectives at the functional and operating levels; and
 Characterize what is considered a good objective.
 10.1 THE NEED FOR STRATEGIC
OBJECTIVES
 After having scanned the macro or external and micro or internal
environments and having set the vision and mission statements, it is a must
to transform the qualitative context of vision and mission statements into
something quantifiable. While the vision and mission statements guide the
top management as to what to achieve and how to go about it, the strategic
objectives are expressed in specific quantifiable terms what is envisaged
behind the vision and mission statement. Operationally, this means strategic
objectives that the functional and operating units will be bothered with. It is
upon the attainment of such strategic objectives that the substance and
meaning of vision and mission statement are deemed appreciated. Without a
set of quantifiable of measurable strategic objectives, the vision and mission
statement becomes nothing but a dream of its leaders that will never se
fruition.
10.2 THE NATURE OF SETTING STRATEGIC OBJECTIVES

 Goals and objectives may sound ordinary and similar. In the

world of strategic management, however, both terms may be taken
as one but have to be associated with vision and statement. In
particular, strategic objective is considered a critical component of
the strategic management process. Whereas mission statement
addresses the question of who the company is and the reason for
its existence, goals represent the desired general end is towards
which efforts are directed. Objectives on the other hand are
specific and quantified versions of goals.
 10. 3
STRATEGIC INTENT VS. STRATEGIC
THRUST

 For one, advocates of strategic management must internalize, value or

imbibe the concept of strategic intent. Strategic intent connotes a
direction and burning desire that a firm or organization would like to
pursue with bulldog tenacity. Sussland (2002) uses the terms strategic
biases and strategic thrusts that are somehow similar or analogous to
strategic intent. The strategic thrust referred to by Sussland insinuates
a decision-making process biased by senior management view or what
is called or believed as paradigms. The same author looks at strategic
thrust as focusing management's attention on a particular area where it
wants to excel. This is where it wants to concentrate its resources so as
to develop the superior competencies and capabilities that will sustain
 Strategic Thrust
Strategic Intent is a decision-making
process that is biased
is an overarching by senior management
goal that an and focuses on a
organization pursues particular area that the
with tenacity. organization wants to
excel in.
10.4 Characteristics of Strategic Objectives
Guided by the aforementioned notions on strategic intent. strategic thrusts,
strategic types and the nature of strategic decisions as described earlier, one leads
to the concept of strategic objectives -which is essentially a concrete articulation of
the company's vision and mission. Strategic objectives are characterized by the
following:

a) converts vision and mission into specific performance targets;

b) they serve as yardsticks to track performance;
c) it pushes the firm to be inventive and focused on results
d) it helps prevent complacency;
e) and the objectives serve as pull or magnet towards common direction.
10.5 Objectives at Functional and Operating Levels
The nature of strategic objectives needs to be articulated to the fullest details as possible and well
distributed among functional or operating units. While development of policies and strategies may be
approached in a variety of ways, objectives setting is better off as a top-down approach rather than a
bottom-up approach or better yet, a top-bottom-top scenario.

As a top-down approach, objective setting can be done using the following as guide:
a) First, establish organization-wide objectives and performance targets.
b) Next, set business and product line objectives.
c) Then, establish functional and departmental objectives.
d) Individual objectives are established last (e.g., individual performance target or sales agent quotas).
10.6 Examples of Strategic Objectives
While it is preferred that strategic objectives should be very specific and quantified, certain
qualitative strategic objectives can be pursued and they may come in the form of the following:

a) increase firm's market share;

b) overtake key rivals on quality or customer service or product performance;
c) attain lower overall costs than rivals;
d) boost firm's reputation with customers;
e) attain stronger foothold in international markets;
f) achieve technological superiority:
g) become leader in new product introductions; and h) capture attractive growth
opportunities.
10.7 What Are Considered Good Objectives
The response to the question as to what are considered good objectives can be summed to a
common by word-SMART. The word SMART in this context is described as follows:

a) Specific. The objective must be concrete and specific the last detail and is quantifiable.
b) Measurable. The objective must be tied up or related to the mission statement and should
be measureable.
c) Achievable. The objective should not be a dream desire but should be something
achievable or attainable.
d) Realistic and resource-oriented. To achieve the vision-mission of the firm, the objective
must be realistic and based on the firm's resource capabilities both huma and other form
of capital or financial resources.
e) Time-bound. There must a time frame or period and limit as to how soon the objectives
can be achieved preferably soon enough.