People set personal goals for themselves all the time. These goals can be short term, such as finding a new apartment within a month. They can also be long-term, such as learning to speak a new language within two years.
The direction-setting process
Just as a person sets different types of personal goals, managers set business goals for their companies. A business goal is a statement of what the company wishes to achieve. It’s the end result that a company’s efforts are directed toward.
Business goals are an important part of the direction-setting process. A company must follow a certain path to achieve its goals. And managers must set goals to steer their companies toward the right path.
There are three types of business goals: strategic, tactical, and operational. Each type of goal is set by a different level of management and has its own time frame in which to be achieved.
Strategic goals relate to many different areas in a company. There are a few key areas.
- innovation — Establishing strategic goals in the area of innovation can enable a company to develop new products and remain at the cutting edge of its industry.
- productivity — Productivity-related strategic goals are set by managers to increase a company’s competitive advantage. Even a small increase in productivity can generate enormous savings in the long term as companies try to achieve greater outcomes with fewer inputs.
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