Novak, Ralph S.||Green, Gerald G.
M.S. (Master of Science)
Department of Management
The problem was a study to determine how business objectives were formulated in manufacturing companies. The major areas researched were: the determination o£ the original business objectives, the major reason for a change in the business objectives, the present business objectives, and the level of management which predominately determined the business objectives. In addition, other areas researched were: the number of people who determined the business objectives, and which level of management had the ultimate decision in regard to business objectives. The primary sources of data consisted of the questionnaire and the personal interview. The questionnaire was mailed to sixty manufacturing companies in the Chicago area. Of the sixty questionnaires mailed, there were twenty each representing the small, medium, and large-sized companies. The companies selected for the personal interviews were required to have the same qualifications as those companies which were mailed the questionnaire. The personal interviews provided additional information and insight into the responses later received from the questionnaire. In addition to these two primary sources, the literature in the library was used as a secondary source. The study found that almost fifty per cent of all the companies responding, stated profit as the original business objective. Increasing competition became the determining factor for companies to alter or modify their original business objectives. With the advent of social responsibility, service, and providing a quality product, the businessman had to change the business objectives in an effort to meet these new demands. The study found that profit was still the most important objective, but the business organization has changed its methods for achieving the goal. Instead of directly increasing profits, the established company is more actively engaged in public affairs to gain the monetary return. With regards to the level of management which determined the business objectives, the study found that the top levels of management were responsible for determining the objectives. These included the owner, board of directors, president, and line executives. The number of people who determined the business objectives was three. Because of its compact size, this group was very maneuverable and could easily adapt to changing conditions. Finally, the president in the majority of cases was the level of management which had the ultimate decision in formulating business objectives. Although these individuals were given the ultimate authority and responsibility for deciding future objectives, the president usually met with other top level executives. Further research needs to be conducted in the area of formulating business objectives if management is to have a sound program for making decisions.
Broggi, Michael J., "A study to determine how business objectives are formulated in a selected number of manufacturing companies" (1967). Graduate Research Theses & Dissertations. 797.
ii, 68 pages
Northern Illinois University
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