Corporate Goals means the annual performance objectives of the Company established for purposes of the Plan.
Corporate Goals means the annual financial goals, set forth in Appendix A attached hereto for 2002 and established by the Committee for 2003 and 2004, in order for a Participant to vest (at least in part) in the portion of his Award of Restricted Shares subject to such Corporate Goals. The Committee shall establish the specific measures for such Corporate Goal(s) before the beginning of the 2003 and 2004 Performance Periods. In creating these measures, the Committee shall use one or more of the following business criteria: per-Share FFO net operating income, return on assets, return on net assets, return on equity, return on capital, market price appreciation of Shares, economic value added, total shareholder return, net income, earnings per Share, operating profit margin, net income margin, cash flow, and/or sales growth. The business criteria may be expressed in absolute terms or relative to the performance of other companies or an index. In addition, the Committee shall receive recommendations on these criteria from a management committee formed for the purpose of providing such recommendations.
Increasing Market Share
Being content with your current market share is a great way to eventually kill your company. One important corporate goal is increasing your market share. If you have already locked up the 35 to 55 demographic, you can set a goal to start reaching a younger crowd. These goals should include ways to reach this particular younger demographic. One example would be through the use of social media and networking to attract younger buyers.
All corporations should seek to increase their profitability, if they want to remain in business. Whether it is through the development of new markets, finding new products to offer to clientele, raising profit margins and cutting unnecessary costs, companies need to find ways to increase their profitability both now and in the future. For example, a shoe company has built a solid customer base for their mid-level priced shoes. This company could increase its profitability by either finding a new manufacturer for the shoes that would offer lower pricing, or the company could release a new line of shoes at a higher price point.
Expanding Current Product Lines
Offering the same products without change for years creates stagnancy in the market. While wild expansion is never recommended, testing out new products and services to see what the market will bear is a good strategy for growth and a good corporate goal. For example, going back to the shoe company. This company produces casual shoes. In order to expand the product line, the company could begin producing high heeled shoes that are still comfortable. This not only expands the product line, but it also expands the market potential.
Improving Employee Retention Rates
Most corporate goals focus on expansion and profitability. However, attention must also be paid to infrastructure when setting corporate goals. If current employee retention rates are low, this means that productivity is suffering and as such, the goals of the company may not be met. Improving employee retention rates reduces the amount of money and time spent on training new hires which, in turn, helps profitability. An example of this corporate goal would be for a company with a current retention rate of 60 percent to work towards maintaining 80 percent of their current workforce through the next year. If changes are necessary to meet this goal, such as higher pay or better benefits, these items would need to be included in the goal.
A strategy gap refers to the gap between the current performance of an organisation and its desired performance as expressed in its mission, objectives, goals and the strategy for achieving them. Mckeown argues that a strategic gap may be transformed into a strategic stretch.
Often unseen, the strategy gap is a threat to the future performance and even survival of an organisation and is guaranteed to impact upon the efficiency and effectiveness of senior executives and their management teams. The strategy gap is considered to be real and exists within most organisations
There are various schools of thought on what causes the gap between vision and execution, and how the strategy gap might be avoided. In 2005, Paul R. Niven, a thought leader in performance management systems, pinpointed four sources for the gap between strategy and execution, namely lack of vision, people, management and resources. He argued that few understand the organisation’s strategy and as most employees’ pay is linked to short-term financial results, maximising short-term gains becomes the foremost priority which leads to less rational decision making. Management is spending little attention to the linkage between strategy and financial planning. Unless the strategic initiatives are properly funded and resourced, their failure is virtually assured.
A strategic gap analysis is one method that is used to help a company or any other organization determine whether it is getting the best return from its resources. It identifies the gap between the status quo and the best possible result. Performing a strategic gap analysis can point to potential areas for improvement and identify the resources that are required for an organization to achieve its strategic goals.
Strategic gap analysis emerges from a variety of performance assessments, most notably benchmarking. When the performance level of an industry or a project is known, that benchmark can be used to measure whether a company’s performance is acceptable or if it needs improvement. Such a comparison informs a strategic gap analysis.
Example of Strategic Gap Analysis
A small mom-and-pop restaurant in a seaside town has a loyal clientele of locals but its owners yearn to serve the summer vacation crowd as well. A strategic gap analysis identifies the changes required for the restaurant to meet its goals.
These changes might include relocating to a busier street, staying open later to appeal to vacationers, and updating the menu. The restaurant owners don’t have to take any of these recommendations. But it might do so if it wants to reach that higher level of business success.