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CHAPTER FIVE Strategies in Action

Submitted to: Dr.NoeQuinanola, CPA Submitted by: Leonora E. Paradela

SUM MA RY Long Term Objectives Represents the results expected from pursuing certain strategies. Strategies represent the actions to be taken to accomplish long term objectives. The time frame for objectives and strategies should be consistent, usually from two to five years. The Nature of Long-Term Objectives Objective should be quantitative, measurable, realistic, understandable, challenging, hierarchical, obtainable, and congruent among organizational units. Each objective should also be associated with a timeline. Objectives are commonly stated in terms such as growth in assets, sales, profitability, market share, degree and nature of diversification, degree and nature of vertical integration, earnings per share, and social responsibility. Objectives provide a basis for consistent decision making by managers whose values and attitudes differ. Without long-term objectives, an organization would drift aimlessly toward some unknown end. Benefits of having a clear objectives; 1. Provide direction by revealing expectations 2. Allow synergy 3. Aid in evaluation by serving as standards 4. Establish priorities 5. Reduce uncertainty 6. Minimize conflicts

CHAPTER FIVE Strategies in Action


Submitted to: Dr.NoeQuinanola, CPA Submitted by: Leonora E. Paradela

7. Stimulate exertions 8. Aid in allocation of resources 9. Aid in designing of jobs 10. Provide basis for consistent decision making

The Balanced Scorecard Balanced scorecard concept is consistent with the notions of continous improvement in management (CIM) and total quality management (TQM). Balanced scorecard concept relates to evaluating strategies, note here that firms should establish objectives and evaluate strategies on items other than financial measures. This is the basic tenet of the balanced scorecard. Financial measures and ratios are vitally important. However, of equal importance are factors such as customer service, employee morale, product quality, pollution abatement, business ethics, social responsibility, community involvement, and other such items.