Goal Setting: Purpose and Contribution to Organisational Success.
In 1953 a study took place at Harvard University that dramatically highlights the importance of goal setting in achieving and maximising potential (Graham, 1999). The study asked a group of students as they graduated about their goal setting behaviours, and then tracked these individuals over the next 20 years. In 1953, only five percent admitted to having clear, written, well-defined goals for their future careers and lives, but astonishingly by 1973 those five percent were worth more in financial terms and other areas than the other 95 percent put together (Graham, 1999). The above example shows that goal setting can have a huge effect on future performance, and this research essay will discuss the success of goal setting in organisations. Firstly this essay will outline the purpose of goal setting in organisations and the theory behind goals, and secondly will provide a discussion and examples of how goal setting can contribute to organisational success. .
Goal Setting Theory is largely associated with Edwin Locke, who defines a goal as "what an individual is trying to accomplish; it is the object or aim of an action" (Krietner & Kinicki, 2001, p. 253). Adapting this definition to fit with organisations, a goal can be seen as a specification of a future target or end result that the organisation is seeking to achieve (Mgmt 101 Lecture notes, 09/04/03) The purpose of goal setting in organisations is to plan by "stating in advance where your organisation intends to be at a specific point in the future" (Inkson & Kolb, 2002). By having goals organisations hope to increase motivation, efficiency and performance and therefore productivity. Businesses can create goals in eight main areas, which are market standing, innovation, human resources, financial resources, physical resources, productivity, social responsibility, and profit (Mgmt 101 Lecture notes, 09/04/03).