The Nature of Organizations | Principles of Management MGT 213

This unit covers the concept of organization, types of organizations, organizational goals (including SMART features), goal formulation approaches, goal succession and displacement, problems of goal formulation, and changing perspectives of organizations.

Concept of Organization

What is an organization?

An organization is a formal association of two or more people who come together to achieve a common goal through coordinated effort. It exists only when people are willing to contribute toward something they cannot achieve alone. Think of a local cooperative (sahakari) in your tole — individual savers join hands so that together they can lend, invest, and grow in ways no single person could manage on their own.

According to W.G. Scott: A formal organization is a system of coordinated activities of a group of people working cooperatively toward a common goal under authority or leadership.

An organization can be viewed in two senses. In the static sense, it is a structure — the arrangement of people working together (like the org chart of Nepal Telecom). In the dynamic sense, it is a process — combining and assigning functions to different people and fixing their responsibilities to get work done.

Characteristics of an organization

Association of people: An organization is made up of people who interact with each other at work. In a momo restaurant, the cook, the waiter, and the cashier all interact constantly, and their mutual cooperation keeps things running smoothly.
Common goal: People work individually or in groups to attain shared organizational goals. The common goal binds members together and motivates them — for a school, that shared goal is educating students well.
Division of work: Total work is divided into smaller tasks handled by different people, which builds specialization. In a bakery, one person kneads dough, another bakes, and another handles sales.
Coordination: Divided work must be linked back together so everyone focuses on the same objective. Coordination connects the activities of various departments, like how the kitchen and the delivery team in Foodmandu must sync to deliver hot food on time.
Environment specific: Organizations interact constantly with their environment, and their success depends on how well they respond to change. A business that ignored the shift to digital payments (eSewa, Khalti) would quickly fall behind.

Types of organizations

Business organizations: Established mainly to earn profit through producing and distributing goods and services. Examples include sole traders, partnerships, and companies like Dabur Nepal or a local kirana store.
Government organizations: Set up to provide service to the general public and ensure people's wellbeing. Examples include ministries, departments, public corporations, and Nepal Police.
Service organizations: Formed to provide social services rather than profit. Examples include schools, hospitals, and NGOs like a community health post in a village.
Unions / Professional associations: Mutual-benefit organizations that serve the common interests of their members. Examples include trade unions, the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), and community clubs.
International organizations: Associations of two or more countries that promote the interests of member nations. Examples include UNDP, World Bank, SAARC, and UNICEF.

Organizational Goals

Concept of organizational goals

Goals are the desired ends or outcomes toward which organizational activity is aimed — they are the results to be achieved. Every management function and process is directed toward achieving these goals, and the whole management process actually begins with setting them.

According to Koontz and Weihrich: Goals are the ends toward which activity is aimed; they are the results to be achieved.

A single goal is not enough for a modern organization. Multiple goals are needed to satisfy the interests of owners, customers, and society — these can include survival, growth, profit, efficiency, service, quality, leadership, and social responsibility. The most crucial and urgent goals are given first priority.

Purposes of organizational goals

Future guidance: Goals provide a unified direction and help everyone understand where the organization wants to go. Without a clear goal, a startup like a new café would have no sense of what it's working toward.
Promotes good planning: Goals are the primary stage of planning and provide the basis for decision-making and control. You can't plan resources or set targets without first knowing the goal.
Reveals priority and source of motivation: Goals show what matters most and push employees to work harder. A sales target of "sell 500 units this month" gives the team something concrete to chase.
Provides direction for evaluation and control: Goals act as standards against which actual performance is measured, so corrective action can be taken when results fall short.
Provides image and identity: Sound, realistic goals give an organization a distinct identity in the public eye, which helps attract competent employees and build trust.

Types of organizational goals

Based on level — Strategic, Tactical, Operational: Strategic goals are long-term and set by top management (e.g. "become Nepal's leading dairy brand"), tactical goals are set by middle management for departments, and operational goals are short-term targets for the lower level.
Based on time — Long-term, Medium-term, Short-term: A long-term goal might be expanding nationwide over five years, while a short-term goal might be opening one new outlet this year.
Based on nature — Economic, Social, Human: Economic goals focus on profit and production, social goals on serving and benefiting society, and human goals on the welfare and satisfaction of employees, customers, and shareholders.

Features of Effective Organizational Goals

The SMART features

Specific: Goals must be clearly defined, not vague. "Increase profit by 10% for the year 2082/83" is specific, whereas "make more money" is not. Clear goals make it easy for every department to know exactly what to do.
Measurable: Goals must be measurable through performance, whether in terms of profit, cost, quantity, or quality. For example, a factory may set a goal to produce a fixed number of units in the fiscal year.
Achievable: Goals should be realistic enough to actually accomplish. Unrealistic, overly ambitious goals demotivate people because no effort feels worth it when success is impossible.
Realistic: Goals must be based on the resources actually available to the organization. Setting a goal that requires money or staff you don't have only leads to frustration.
Time-bound: Every goal needs a deadline. "Increase market share by 5% within one year" is time-bound, which creates urgency and allows progress to be tracked.

Goal Formulation

Concept of goal formulation

Goal formulation is the process of setting goals in an organization. Since all management functions flow from goals, this is where the management process really begins — goals give the organization direction about what needs to be done.

While formulating goals, managers follow certain steps: first they scan the environment, then formulate overall organizational goals, and finally each departmental manager sets specific departmental goals. Because there are multiple goals, each one may require studying a different part of the environment.

Process of goal formulation

Scan the environment: Managers study both internal and external factors — the economy, competition, technology, and available resources — before deciding what is realistic.
Formulate overall goals: Top management sets the broad organizational goals that tie back to the mission, such as survival, growth, or market leadership.
Formulate departmental goals: Each department then sets specific goals that support the overall goals — the marketing team, production team, and finance team each get their own targets.
Prioritize goals: The most crucial and urgent goals are given first priority so that limited resources go where they matter most.

Approaches to goal formulation

Top-down approach: The traditional approach where top management sets goals without involving middle or lower levels, believing it already has all the needed information from experience and experts. These goals tend to be ambitious and challenging and demand high commitment from employees to achieve.
Bottom-up approach: A participatory approach that begins at the lower level — middle and lower management set departmental goals and pass them upward for refinement. Goals formed this way are usually more realistic and reflect the real needs of the organization.
Interactive / MBO approach: Goal setting through participation and consensus across all levels of management and employees. Because everyone from top to bottom is involved, the goals become realistic and earn strong commitment from all levels.

Goal Succession and Displacement

Goal succession

Goal succession is the intentional, planned modification or change of an existing goal by management — essentially a deliberate change of course to adopt a new goal. It happens when an organization either achieves its original goal or finds that goal no longer fits the situation.

A real Nepali example: many hotels and resorts shifted their goal from earning profit to simply surviving during the political instability and insurgency period (roughly 1999–2006), then shifted back to growth and profit once tourism recovered.

Forms of goal succession

Add new goals to existing goals: The old goals stay, and new ones are added to expand the organization. A clothing brand whose original goal was capturing market share might add a new goal of becoming a leader in social responsibility.
Replace existing goals with new goals: New goals take the place of old ones — done when existing goals can't be achieved, have become irrelevant, or have already been fulfilled.
Enlarge the scope of existing goals: The goal stays the same but its reach widens. A tuition center teaching only school courses might expand its scope to also offer vocational and skill training.

Reasons / conditions for goal succession

Achievement of original goal: Once the original goal is met, a new or wider goal is needed. A company that captured the domestic market might now aim to export internationally.
Non-achievement of original goal: If the goal can't be reached, it's reviewed and modified. A firm that failed at aggressive expansion might switch to simply maintaining its existing market share.
Change in environment: Modern organizations operate in a changing environment and must adjust their goals to survive — for instance, responding to new government regulations or new technology.
Organizational priority shifting: As the organization's needs and priorities change, its goals are modified or replaced accordingly.

Goal displacement

Goal displacement is an unintentional change in the original goal, where a new or secondary goal quietly replaces the one the organization was actually created for. It occurs when "sub-goals" become the primary goals, or when mere survival of the organization becomes more important than its original purpose.

According to Blau: Goal displacement can be understood as a shift in the structure of an organization by changing the weights within the structure or by adopting completely new goals.

A simple example: a charity that was started to feed poor children but, over time, spends most of its energy on fundraising events and protecting its own staff salaries — the original mission has been displaced by self-preservation.

Conditions in which goal displacement takes place

Substituting original goals: When an organization quietly swaps its original goals for some other goals.
Pursuing an unintended goal: When an organization chases a goal it was never established to serve.
Misallocated resources: When an organization pursues a goal for which resources were never actually allocated.
Serving an unknown goal: When an organization ends up serving a goal it doesn't even realize it has adopted.

Reasons why goals get displaced

Excessive delegation of authority: Too much delegation can let lower units drift toward their own sub-goals instead of the organization's main goal.
Non-attainable or vague goals: When goals are unrealistic or unclear, people latch onto easier, side goals instead.
Bureaucratic difficulties: Rigid rules and red tape make following procedures feel more important than achieving the real goal.
Subordination of organizational goal: Personal or departmental interests get placed above the organization's overall goal.
Uncertainty of business environment: A fast-changing environment can push an organization off its original track.
Employees' attitude: Lack of confidence, commitment, or competence among employees pulls focus away from the real goal.

Problems of Goal Formulation

Major problems managers face

Inappropriate goals: When a goal is unachievable or unattainable, it becomes inappropriate. Not all goals can be quantified, so there must be balance between qualitative and quantitative goals, otherwise managers face a dilemma.
Improper reward system: Goal achievement must be linked to promotions, good pay, and other rewards. If rewards are poor or unfair, employees won't dedicate effort to the goal — achieving it then means nothing to them.
Dynamic and complex environment: Forces like the national economy, the political system, rapid technological change, and intense competition make it harder to formulate stable goals.
Reluctance to establish goals: Some managers avoid setting goals because they fear being blamed for failure or don't want extra responsibility, so they stay away from the process entirely.
Resistance to change: Employees often resist new goals because of old work habits and lack of confidence, finding it hard to adapt to new technology or new organizational setups.
Other barriers (lack of resources): Inadequate resources — money, staff, materials — frustrate managers and block goal achievement. Management should ensure enough resources are available before setting goals.

Changing Perspectives of Organization

Organizations change over time due to rapid technology development, shifting social expectations, political influence, and economic change. These forces push organizations to operate in new ways and to keep up with customer demands. The main changing perspectives are:

Open system: Organizations now interact regularly with their environment, taking feedback from competition, technological change, and shifting government rules, then adjusting their dealings to match customer demands.
Organizations as culture: Every organization develops its own culture — its values, norms, traditions, and beliefs — and a strong, positive culture helps it maintain social prestige and status.
Globalization: Globalization has tied the world's people together and brought global competition right to the doorstep, so managers must now think with a global perspective even while running a local business.
Learning orientation: Organizations must continuously gather knowledge from employees and outside sources to meet rising customer expectations for new ideas, creativity, and innovation.
Workforce diversity: Modern organizations increasingly involve employees of diverse backgrounds, which builds understanding, empathy, and tolerance while requiring good policies, training, and culture.
Team empowerment: Teams are formed to handle varied jobs and are given authority to plan, allocate resources, coordinate, and control their own activities independently.
Work-time flexibility: Competition has pushed many organizations toward round-the-clock (24-hour) operation, which helps maximize productivity and make optimum use of resources.
Technological change: Ever-growing technology keeps raising the aspirations and expectations of customers, investors, competitors, and employees, making it a constant force every organization must manage.

Important Questions and Solutions

Exam-style questions with solutions for this unit.

1. Describe the changing perspective of organization. (2083)

Organizations do not stay the same over time. Rapid technological development, changing social expectations, political influence and economic change keep pushing them to work in new ways and keep up with customer demands.

The major changing perspectives of modern organizations are:

Open system: Modern organizations interact regularly with their environment instead of working in isolation. They take feedback on competition, technological change and new government rules, and then adjust their activities to match customer demands. For example, a firm that ignored the shift to digital payments would quickly fall behind.
Organization as culture: Every organization develops its own culture, made up of its values, norms, traditions and beliefs. A strong and positive culture shapes how employees behave. It also helps the organization keep its social prestige and status in the public eye.
Globalization: Globalization has linked people across the world and brought global competition to the doorstep of even local businesses. As a result, managers must think with a global perspective even when they run a local business in Nepal.
Learning orientation: Customers increasingly expect new ideas, creativity and innovation. To meet these rising expectations, organizations must keep gathering knowledge from their employees and from outside sources.
Workforce diversity: Modern organizations employ people from diverse backgrounds, such as different castes, genders, regions and cultures. Diversity builds understanding, empathy and tolerance among employees. However, it requires sound policies, training and an inclusive culture to manage well.
Team empowerment: Organizations form teams to handle varied jobs and give them real authority. Empowered teams plan, allocate resources, coordinate and control their own activities independently, which reduces dependence on top management.
Work-time flexibility: Competition has pushed many organizations toward round-the-clock (24-hour) operation. Flexible working hours help maximize productivity and make optimum use of resources, as seen in banks, hospitals and online delivery services.
Technological change: Technology keeps advancing, and it constantly raises the aspirations and expectations of customers, investors, competitors and employees. Every organization must therefore manage technology as a constant force in order to stay competitive.

The modern organization is an open, learning, diverse and technology-driven system. It must keep adapting to its environment to survive and grow.

2. Illustrate the emerging management concepts. (2083)

Emerging management concepts are the new ideas and practices that modern managers adopt to cope with rapid changes in technology, society, the economy and politics. They move management away from rigid, closed and traditional practices toward flexible, open and people-focused ones.

The major emerging concepts are:

Open system concept: Management treats the organization as a system that constantly interacts with its environment. It takes inputs and feedback, such as competition, technology and government rules, and adjusts its operations to customer demands.
Organizational culture: Managers now deliberately build a strong culture of shared values, norms, traditions and beliefs. A positive culture guides employee behaviour and gives the organization social prestige.
Global perspective: Globalization has brought international competition into local markets. Managers must therefore think and plan globally even while running a local business.
Learning organization: Organizations continuously gather knowledge from their employees and from outside sources. This helps them generate new ideas, creativity and innovation that meet rising customer expectations.
Managing workforce diversity: Employees from different backgrounds are brought together. Management supports this mix with suitable policies, training and an inclusive culture so that it builds understanding, empathy and tolerance.
Team empowerment: Self-managed teams receive authority to plan, allocate resources, coordinate and control their own work. This speeds up decisions and increases employee commitment.
Work-time flexibility: Organizations adopt flexible hours and 24-hour operations to cope with competition. This maximizes productivity and makes optimum use of resources.
Technology-driven management: Ever-growing technology raises the expectations of customers, investors, competitors and employees. Managers must adopt and manage it continuously, for example through digital payments and online services.
Total Quality Management (TQM): The whole organization focuses on continuous improvement of quality to satisfy customers.
Corporate social responsibility and ethics: Organizations are expected to serve society and act ethically, not just earn profit.

Thus, emerging management concepts help organizations stay competitive, innovative and responsive in a dynamic environment.

3. State the types of organizational goal. (2083)

Organizational goals are the desired results that organizational activity aims to achieve. They are classified on three bases:

Based on level: strategic goals are long-term goals set by top management, tactical goals are set by middle management for departments, and operational goals are short-term targets for the lower level.
Based on time and nature: by time, goals are long-term, medium-term or short-term. By nature, they are economic (profit and production), social (benefit to society) or human (welfare of employees, customers and shareholders).

4. Describe the changing perspectives of modern organizations. (2082)

The major changing perspectives of modern organizations are:

Open system: Modern organizations interact regularly with their environment instead of working in isolation. They take feedback on competition, technological change and new government rules, and then adjust their activities to match customer demands. For example, a firm that ignored the shift to digital payments would quickly fall behind.
Organization as culture: Every organization develops its own culture, made up of its values, norms, traditions and beliefs. A strong and positive culture shapes how employees behave. It also helps the organization keep its social prestige and status in the public eye.
Globalization: Globalization has linked people across the world and brought global competition to the doorstep of even local businesses. As a result, managers must think with a global perspective even when they run a local business in Nepal.
Learning orientation: Customers increasingly expect new ideas, creativity and innovation. To meet these rising expectations, organizations must keep gathering knowledge from their employees and from outside sources.
Workforce diversity: Modern organizations employ people from diverse backgrounds, such as different castes, genders, regions and cultures. Diversity builds understanding, empathy and tolerance among employees. However, it requires sound policies, training and an inclusive culture to manage well.
Team empowerment: Organizations form teams to handle varied jobs and give them real authority. Empowered teams plan, allocate resources, coordinate and control their own activities independently, which reduces dependence on top management.
Work-time flexibility: Competition has pushed many organizations toward round-the-clock (24-hour) operation. Flexible working hours help maximize productivity and make optimum use of resources, as seen in banks, hospitals and online delivery services.
Technological change: Technology keeps advancing, and it constantly raises the aspirations and expectations of customers, investors, competitors and employees. Every organization must therefore manage technology as a constant force in order to stay competitive.

The modern organization is an open, learning, diverse and technology-driven system. It must keep adapting to its environment to survive and grow.

5. Mention any four problems of goals formation. (2082)

Goal formation is the process of setting an organization’s goals, and managers face several problems in it. Four major problems are:

Inappropriate goals: goals that cannot be achieved, or that are not balanced between qualitative and quantitative targets, put managers in a dilemma.
Improper reward system: when achieving a goal is not linked to fair pay, promotion or other rewards, employees do not commit to it.
Dynamic and complex environment: changes in the economy, politics, technology and competition make it hard to set stable goals.
Resistance to change: employees with old work habits and low confidence resist new goals and new ways of working.

6. What do you mean by digital dimensioning? (2082)

Digital dimensioning means bringing digital technology into every part of an organization, including its operations, communication, customer service and decision-making, so that it can work faster and meet changing customer expectations.

Digital operations: work processes such as accounting, inventory and payments are handled through software and online systems, for example a business accepting eSewa or Khalti payments.
Digital customer interface: organizations reach and serve customers through websites, apps and social media, the way Foodmandu takes orders online.

7. Develop an organizational goal of an organization of your interest. (2081)

Organizational goals are the desired ends or outcomes toward which an organization's activity is aimed, that is, the results it wants to achieve. Taking a dairy company like Dairy Development Corporation (DDC) as the organization of interest, its goals can be developed as follows.

Economic goal: To earn a fair profit by producing and selling quality milk and dairy products, and to increase its annual sales by 10% in the fiscal year 2082/83.
Social and human goal: To supply pure, affordable milk to Nepali consumers, provide a stable market and fair price to local farmers, and ensure the welfare and satisfaction of its own employees.

8. What is goal formulation? Explain its approaches. (2081)

Goal formulation is the process of setting goals in an organization, and since all management functions flow from goals, this is where the management process really begins by giving the organization its direction about what needs to be done. While formulating goals, managers first scan the environment, then formulate the overall organizational goals, and finally each departmental manager sets specific departmental goals to support them. The approaches to goal formulation describe who in the organization is involved in the goal-setting process and how, and there are three main approaches.

Top-down approach: This is the traditional approach in which top management sets the goals on its own without involving the middle or lower levels.
a. Belief behind it: Top management believes it already has all the needed information, drawn from its own experience and from experts, so lower-level participation is seen as unnecessary.
b. Nature of the goals: The goals set this way tend to be ambitious and challenging, and they demand high commitment from employees to achieve.
c. Limitation: Because lower levels are excluded, the goals may be less realistic and may not reflect ground-level conditions.
Bottom-up approach: This is a participatory approach that begins at the lower level rather than the top.
a. How it works: Middle and lower management set the departmental goals first, then pass them upward to top management for refinement and approval.
b. Nature of the goals: Goals formed this way are usually more realistic because they come from the people closest to the actual work.
c. Advantage: They reflect the real needs of the organization and tend to earn better acceptance at the lower levels.
Interactive / MBO (Management by Objectives) approach: This approach sets goals through participation and consensus across all levels of management and employees.
a. How it works: Everyone from the top level down to the lower level takes part in the goal-setting process, so goals are agreed upon jointly rather than imposed.
b. Nature of the goals: Because all levels are involved, the goals become realistic and practical.
c. Advantage: This approach earns strong commitment from all levels, since employees feel ownership over goals they helped set.

9. Write two problems of goal formulation. (2080)

Goal formulation is the process of setting goals in an organization, and while doing so managers face several problems. Two of them are:

Inappropriate goals: When a goal is unachievable or unattainable, it becomes inappropriate. Since not all goals can be quantified, there must be a balance between qualitative and quantitative goals, otherwise managers face a dilemma in setting them.
Improper reward system: Goal achievement must be linked to promotions, good pay, and other rewards. If the rewards are poor or unfair, employees will not dedicate real effort to the goal, since achieving it then means nothing to them.

10. What is organization? (2079)

An organization is a formal association of two or more people who come together to achieve a common goal through coordinated effort, and it exists only when people are willing to contribute toward something they cannot achieve alone.

According to W.G. Scott, a formal organization is a system of coordinated activities of a group of people working cooperatively toward a common goal under authority or leadership. Organizations do not stay the same over time; they keep changing due to rapid technological development, shifting social expectations, political influence, and economic change, which push them to operate in new ways and keep up with customer demands.

11. What is organizational goal? Why goal succession and displacement is required? Explain. (2079)

An organizational goal is the desired end or outcome toward which an organization's activity is aimed, that is, the result it wants to achieve. According to Koontz and Weihrich, goals are the ends toward which activity is aimed and are the results to be achieved. Every management function and process is directed toward achieving these goals, and the whole management process actually begins with setting them. Over time, however, these goals do not stay fixed: they may be deliberately changed (succession) or may drift away unintentionally (displacement), as explained below.

Achievement of the original goal: Goal succession is required once the original goal has already been met, because a new or wider goal is then needed to keep the organization moving. For example, a company that has captured the domestic market may now aim to export internationally.
Non-achievement of the original goal: Succession is also required when the goal cannot be reached, so it must be reviewed and modified. A firm that failed at aggressive expansion might switch to simply maintaining its existing market share.
Change in the environment: Modern organizations operate in a changing environment and must adjust their goals to survive. Succession becomes necessary when responding to new government regulations, new technology, or shifting market conditions.
Shifting of organizational priorities: As the organization's own needs and priorities change, its goals are modified or replaced accordingly, which makes goal succession necessary to stay relevant.
Excessive delegation of authority: Turning to displacement, too much delegation lets lower units drift toward their own sub-goals instead of the organization's main goal, so the real goal quietly gets replaced.
Non-attainable or vague goals: When goals are unrealistic or unclear, employees latch onto easier side goals instead, and these secondary goals end up displacing the original one.
Bureaucratic difficulties: Rigid rules and red tape make following procedures feel more important than achieving the real goal, so means take the place of ends.
Subordination of the organizational goal: When personal or departmental interests are placed above the organization's overall goal, the original purpose is displaced by narrower interests.

12. What is goal displacement? (2078)

Goal displacement is an unintentional change in the original goal of an organization, in which a new or secondary goal quietly replaces the goal the organization was actually created for. It occurs when "sub-goals" gradually become the primary goals, or when the mere survival of the organization becomes more important than its original purpose.

According to Blau, goal displacement can be understood as a shift in the structure of an organization by changing the weights within the structure or by adopting completely new goals. For example, a charity started to feed poor children that ends up spending most of its energy on fundraising events and protecting staff salaries has let self-preservation displace its original mission.

13. What is organization? Explain changing perspective of organization. (2078)

An organization is a formal association of two or more people who come together to achieve a common goal through coordinated effort, and it exists only when people are willing to contribute toward something they cannot achieve alone. According to W.G. Scott, a formal organization is a system of coordinated activities of a group of people working cooperatively toward a common goal under authority or leadership. Organizations do not stay the same over time; they keep changing due to rapid technological development, shifting social expectations, political influence, and economic change, which push them to operate in new ways and keep up with customer demands. The main changing perspectives of organization are explained below.

Open system: Organizations now interact regularly with their environment rather than working in isolation. They take feedback from competition, technological change, and shifting government rules, and then adjust their dealings to match customer demands.
Organizations as culture: Every organization develops its own culture, made up of its values, norms, traditions, and beliefs. A strong and positive culture helps the organization maintain its social prestige and status.
Globalization: Globalization has tied the world's people together and brought global competition right to the doorstep. As a result, managers must now think with a global perspective even while running a local business.
Learning orientation: Organizations must continuously gather knowledge from their employees and from outside sources. This helps them meet the rising customer expectations for new ideas, creativity, and innovation.
Workforce diversity: Modern organizations increasingly involve employees of diverse backgrounds. This builds understanding, empathy, and tolerance, but it also requires good policies, training, and a supportive culture to manage well.
Team empowerment: Teams are now formed to handle varied jobs and are given real authority. They are allowed to plan, allocate resources, coordinate, and control their own activities independently.
Work-time flexibility: Competition has pushed many organizations toward round-the-clock (24-hour) operation. This helps maximize productivity and make the optimum use of available resources.
Technological change: Ever-growing technology keeps raising the aspirations and expectations of customers, investors, competitors, and employees. This makes technology a constant force that every organization must keep managing.

14. What does an effective goal mean? (2077)

An effective goal means a goal that is well-designed enough to actually guide and be achieved by the organization, and such a goal is commonly described by the SMART features. It must be Specific (clearly defined, not vague), Measurable (its achievement can be judged in terms of profit, cost, quantity, or quality), Achievable (realistic enough to actually accomplish), Realistic (based on the resources the organization actually has), and Time-bound (fixed within a clear deadline that creates urgency and allows progress to be tracked). For example, "increase market share by 5% within one year" is an effective goal because it meets all these features.

15. What is goal succession? Give an appropriate example of goal succession. (2077)

Goal succession is the intentional, planned modification or change of an existing goal by management, that is, a deliberate change of course to adopt a new goal. It happens when an organization either achieves its original goal or finds that the original goal no longer fits the situation. Unlike goal displacement, which is unintentional, goal succession is always a conscious and planned decision taken by management to keep the organization relevant and moving forward.

Example:
An appropriate example of goal succession is a Nepali hotel, say a mid-sized resort in Pokhara. During the political instability and insurgency period (roughly 1999 to 2006), when tourist arrivals collapsed, the resort deliberately shifted its goal from earning profit to simply surviving. Once peace returned and tourism recovered, it consciously shifted its goal back from mere survival to growth and profit. This planned change of goals in response to the changing situation is exactly what goal succession means, and the same resort's journey can illustrate every form and reason below.

The forms of goal succession are explained below.

Add new goals to existing goals: Here the old goals stay in place and new ones are added to expand the organization. As business recovered, the Pokhara resort kept its original goal of earning profit but added a new goal of becoming known for eco-friendly, responsible tourism, so both goals now run side by side.
Replace existing goals with new goals: Here new goals take the place of the old ones, done when existing goals cannot be achieved, have become irrelevant, or have already been fulfilled. During the insurgency, the resort's profit goal became impossible, so it was fully replaced by the goal of survival until conditions improved.
Enlarge the scope of existing goals: Here the goal stays the same but its reach is widened. After recovery, the resort widened its original goal of serving trekking tourists to also serving conference guests, wedding parties, and domestic holidaymakers, keeping the same profit goal but over a much larger market.

The reasons or conditions for goal succession are explained below.

Achievement of the original goal: Once the original goal has been met, a new or wider goal is needed. After the resort achieved a stable local reputation, it set a new, higher goal of attracting international tour groups.
Non-achievement of the original goal: If the goal cannot be reached, it is reviewed and modified. When the resort's early plan of aggressive expansion into new districts failed during the unrest, it modified this into simply maintaining its existing operations.
Change in the environment: Modern organizations must adjust their goals to survive in a changing environment. The shift from profit to survival and back to growth was driven entirely by the changing political and tourism environment around the resort.
Shifting of organizational priorities: As the organization's needs and priorities change over time, its goals are modified accordingly. As the resort grew after recovery, its priority shifted from short-term cash survival toward long-term brand building and quality service.

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