Strategic and Tactical Goals
Strategic and Tactical Goals
"There is one and only one social responsibility of business - to use its resources and engage in activities designed to increase its profits."
Milton Friedman, Nobel Prize recipient in EconomicsWhile this view emphasizes profit maximization, modern businesses often balance this with other objectives such as ethical and social responsibilities.
In the realm of business management, setting clear objectives and developing strategies to achieve them is crucial for success. This guide explores the concepts of strategic and tactical objectives, their relationship to business strategies and tactics, and how they can be effectively formulated using the SMART framework.
Business objectives serve multiple purposes:
Provide direction and purpose for employees and managers
Motivate employees and increase productivity
Align organizational efforts towards common goals
Business objectives can be categorized into two main types:
Long-term goals for the entire organization
Align with the overall vision or mission of the business
Require significant investment in human and financial resources
Often focus on growth, profit maximization, shareholder value, or ethical considerations
Responsibility of executive directors (senior management)
Results-oriented
Example: Improving market share by expanding product portfolio in a specific market
Short-term, specific goals for functional areas of the organization
Have definitive timelines, usually less than a year
Easier to change or reverse than strategic objectives
Delegated to lower levels of the organizational hierarchy
Focus on performance targets within departments
Example: Improving labor productivity or reducing operational waste in specific departments
Actions planned to reach long-term organizational aims and corporate-wide objectives
Decided by senior leadership or board of directors
Examples include diversification, overseas expansion, mergers, or takeovers
Affect and are affected by functional areas: human resources, finance, marketing, and operations management
Shorter-term approaches to achieving tactical and operational objectives
Methods used to meet specific, measurable goals
Implemented by the workforce to work towards strategic objectives
To ensure objectives (both strategic and tactical) are effective, businesses often use the SMART framework:
What exactly needs to be accomplished?
Who is involved?
Where will it be implemented?
How much or how many?
What metrics will be used?
Are the necessary skills, resources, and time available?
What obstacles might be encountered?
Does it support the overall mission?
Is it appropriate given the current situation?
When will the objective be achieved?
How can the timeline be broken down into manageable chunks?
By effectively aligning strategic and tactical objectives with well-thought-out strategies and tactics, businesses can create a clear roadmap for success, motivate their workforce, and drive meaningful progress towards their long-term goals.