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Peter Ducker, while working as a consultant for General Electric, identified eight key areas in which organizations would establish objectives. The areas were: (1) market standing, (2) productivity, (3) physical and financial resources, (4) profitability, (5) innovation, (6) manager performance and development, (7) worker performance and attitudes, and (8) public and social responsibility.

  1. 1.                 Market Standing 

Market standing and innovation are the foundation areas in management. Essentially an organization exists to obtain results in these areas only. Market standing is a question deciding on the optimum (not the maximum) of market share the firm is trying to capture ultimately. This requires a careful analysis of (i) customers and products or services; (ii) market segments (what groups are buying the product or service); and (iii) distribution channels (who is getting the product to the customers).

  1. 2.                 Innovation 

In every business there are three kinds of innovations: innovation in product or service; innovation in market place and consumer behavior and values; and innovation the various skills and activities needed to make the products and services and to being them to the market. The chief problem in setting innovation objectives is the difficulty of measuring the importance of various innovations. Management must, first of all, anticipate the innovation goals needed to reach marketing goals. It must also find out the technological developments in all areas of the business. For example, the survival of insurance company depends on: the development of new forms of insurance, the modification of existing policies, finding out cheaper ways of selling policies and settling claims etc. operating in a competitive world forces business firms to place emphasis on innovation goals.

  1. 3.                 Productivity 

Productivity is the ratio of an organization’s inputs to its outputs. All business has the same resources to work with; it is the quality of management that differentiates one business from another. It must decide as to what inputs of labor, equipment and finances are necessary to produce the firm’s outputs?

  1. 4.                 Physical and Financial Resources

 Every business must be able to attract resources – physical, financial and human – and put them to productive use to be able to perform well. Resource mobilization is a two-step process: anticipating the needs of the business and planning for obtaining the resources in an economical fashion . After mobilizing resources one also has to say “This is what is available; what do we have to be, how we have to behave, to get the fullest benefit?”

  1. 5.                 Manager Performance and Development 

In order to ‘stay in’ and remain profitable every business needs strong, innovative managers. So it is highly important, especially in the case of large organizations, to set objectives relating to the quality of management  performance, the development of managers at various levels in the organization.

  1. 6.                 Worker Performance and Attitudes 

Organizations must provide tangible benefits to the individuals working for its continued growth. Thus, workers want wages, managers want salaries, and owners want profits. These are the inducements that an organization must provide in order to obtain performance (contributions) from various groups . Most of the routine or normal work is performed by operative level employees in every organization. Unless goals are established in terms of output per employee, quality of product etc. the organizational activities may be disrupted by labor strife, union problems etc.

7.                 Profitability 

Profit objectives are important for accomplishing other objectives like covering risks in the business; (ii) ensuring supply of future capital for modernization and expansion; and (iii) satisfying customer needs. “A fundamental objective of the business firm is to produce and distribute products and services that the customer is willing to buy. Its reason for being is to create value. Utility must be created or consumers will spend their money elsewhere. Profits are essential to the survival and growth of the firm.” They are the rewards for the effective utilization of resources in creating values for consumers. Instead of trying to maximize profits, the firm must try to create utilities for consumers .

  1. 8.                 Public and Social Responsibility 

To achieve the economic objective, a firm must produce the goods the consumer wants. If a firm is not able to create economic value for society, it may not stay in business along enough to make a profit. In recent years social responsibility of business has become a matter of concern for many business undertakings. Here ‘responsibility’ implies a sense of obligation on the part of the business toward the general public.