You can divide organisations into two main types:
COMMERCIAL ORGANISATIONS - whose main aim is to make a profit
SERVICE ORGANISATIONS - whose main aim is to provide a service
Commercial organisations, as their name suggests, indulge in commerce. At the end of the day, their success is mainly judged by profitability. Put simply, their income must be bigger than their expenses. If they do not make a profit, they do not survive. Two main ways of increasing profit is to conduct more business and to reduce costs through greater efficiency. Commercial organisations include BHP, Microsoft and your local milk bar.
Service organisations ("Not for profit") are not intended to generate profits. Often, if a profit is made, it is re-invested to improve the quality of their service. Of course a service organisation does not want to waste money, but it would be quite happy if it barely broke even at the end of the financial year because profit is not its reason for being. Its success is judged by the quality of the service it provides. Service organisations include churches, public hospitals, state schools, the Red Cross, community groups, your local fishing club, governments.
Of course commercial organisations are rarely (one hopes) driven purely by the profit motive. They contribute to the community and to charity. Of course such seemingly profitless acts do help the organisation: goodwill improves, the public views them more favourably, and of course it is rare for an organisation to contribute anonymously: it is a way of getting publicity. Do you think McDonalds would have their "Happy Day" if their name didn't get prominent exposure in the ads?
Equally, the services offered by service organisations are rarely completely free to their clients. Even public transport companies charge for tickets. For a service organisation to work, they must have funds to provide their services and these funds must come from somewhere. Some income comes from contributions (to charities, for example) and other income comes from fees (e.g. fishing club membership dues). The funds are used to cover expenses so they can continue providing their service, not to make money for the sake of making money.
Each organisation has its own main aims. Often, the aims of an organisation can define its identity and differentiate it from other similar organisations. Take two chain stores. One might aim for low cost, limited choice, reasonable quality. Another might aim for wide choice and excellent quality. A shoe store in Fitzroy may have quite different aims to one in Toorak.
The aims of an organisation - the things it strives for and prides itself on - are its organisation goals.
These goals are often written down in a mission statement: a brief philosophical statement that defines what is important to the organisation. Customers often select one organisation over another based on what it works hard to achieve. You can tell an organisation's genuine organisational goals when they have to make a decision: if, for example, a store had to choose between raising prices or sacking staff its decision can reflect its organisational goals. If store 'A' raised prices, it implies that it values the provision of good customer service and is not willing to cut staff if it can help it. If store 'B' cut staff, you might be able to assume that the store is more concerned with keeping prices down, even if service suffers. Organisational goals are important to know when tough decisions need to be made.
Some organisations goals are pretty easy to work out. Hospitals would, you'd hope, have excellent medical outcomes as their main organisational goals. Schools would aim primarily for providing quality education. A shop might aim for personalised and courteous service. Another shop might aim to provide the best prices.
Conflicts can occur when goals collide: what if a private school that valued the quality of its education had to cut costs? Would a private hospital start using second-hand scalpels to save money in tough times? It's pretty common to hear of company directors or staff resigning because they believe their company has started ignoring its primary organisation goals.
When you are given a case study in ITA, you are often told what the organisation goals are. It might say, "Fred's Moving Company" prides itself on..." or "ABC Printing aims to..." or "Giraffe Restumping Co. is concerned that..." These are clues to what the organisations consider important. The fact the the Giraffe Restumping Co. is "concerned" suggests that one of their organisational goals is being threatened.
Apart from the organisational goals given to you in a case study, there are some standard ones you can assume for any organisation:
FOR COMMERCIAL ORGANISATIONS: profit. Whatever they do, in the end, should eventually lead to increased profit. Some actions may not be immediately obvious as profitable. Sponsoring charities, as mentioned above, may seem like throwing money away, but if it gets them publicity and "warm fuzzies" from the community, they will increase their number of customers and their competitiveness against rivals. Spending big money on new technology may seem foolish until you realise that the expense will be recouped after a while from better productivity (producing more stuff in a given time), reduced costs or better quality products (which will attract customers away from rivals.)
FOR SERVICE ORGANISATIONS: service. Whatever they do, in the end, should eventually lead to providing a better service to their clients. Any profits are re-invested in the organisation.
FOR ANY ORGANISATION:
efficiency: Every organisation wants to be efficient: they don't want to waste time, money or effort.
good decision making: Every organisation wants to make informed and wise decisions to help them achieve their organisation goals.
effectiveness. Every organisation wants to do their work well. How well they are prepared to do it, of course, will be affected by organisational goals. The manager of a company making the dinky little toys in K-Mart Christmas Crackers is probably not going to lie awake at night worrying that his plastic jewellery does not look realistic enough (he certainly doesn't seem to lose sleep about the quality of the jokes and riddles in those horrid things. And don't get me started on the pathetic quality of the paper hats in them.) He is more likely to value cost over quality. On the other hand, the designer of an antimissile system is not likely to try to get much business by offering countries a cut-price missile defence shield that only intercepts 50% of incoming nuclear missiles.
good reputation: no organisation aims to look stupid or incompetent (well, it seems some must but I don't think they really aim to do it). Every organisation wants to be regarded as competent in whatever they do, whether it is quality, price, speed or any other factor. Companies will often go to extreme lengths to build or hold on to a reputation because their reputation is their biggest asset. If, in a store that prided itself on customer service, a sales assistant insulted a customer you could expect the management to be horrified and bend over backwards to make amends. If "Pronto Printing" was renowned for its accuracy and quick results and its production suddenly got late and sloppy, you'd expect the management to very quickly find the causes of the problems and eliminate them.
good customer service: one hopes most organisations would value this!
Believe it or not, organisations come in different sizes. Ranging from your local milk bar with Bert and Alice to multinational conglomerates with incomes greater than Australia's gross domestic product, all organisations structures. Bert and Alice at the corner shop are likely to have a flat, simple organisational structure. Bert (Chief Executive Officer) and Alice (Vice President in charge of salad sandwiches) are not likely to have a lot of problems with data management and board meetings.
However the well-known national Company X, would be typical of the pyramidal corporate structure. This company owns supermarkets across the country..
A few (well paid) high level managers form the strategic management. They deal with the "big picture", long-term, expensive plans of the organisation. They usually do not worry about trivial details of implementation. They determine the organisation's direction and its organisational goals. They would deal with problems such as "Our profits are static.These new hot bread shops are stealing customers away from our sliced bread shelves. We've got to get into the hot bread business." They consider the issue and decide they will build bakeries into their major supermarkets and sell their own home-baked specialty breads. Strategic management may be looking at time frames of years or decades before their goals are accomplished.
After formulating the plan, they pass orders down to the tactical management level. These people deal with shorter term goals intended to bring about the outcome dictated from above. In other words, decisions at the tactical level aim to implement the goals determined at the strategic level. Their time frame may be measured in months. They look at how to implement the broad plan passed down from their bosses in strategic management. They would organise the contractors who will build the bakeries in the supermarkets, put out tenders for ovens, and organise the employment of bakers. They formulate specific instructions to be passed down to the operational managers.
The operational managers deal directly with the workers who will actually do the work to accomplish the plans. Think of operational managers like factory foremen - they deal with day-to-day problems at a very concrete level. They actually see to it that work is done. They would put ads in the paper and interview bakers. They would supervise carpenters, plumbers, shopfitters and electricians who are doing the supermarket renovations. The operational managers deal with practical problems such as "Bill's got lost and he's got the oxy-acetylene unit in his ute" and "This oven's not going to fit in that space, boss. What do you want us to do?" and "This bloke's turned up asking if he can be an apprentice baker. What do I tell him?"
Just as orders flow from the top, data and information flow towards the top. Top level managers would be flooded if every piece of data arrived on their desks, such as the shortage of sesame seeds at the Wonthaggi store, or the fact the Harry burnt his hand on the oven at the Swan Hill store. Data is collected at the lower levels and filtered upwards, getting more and more processed as it travels. By the time the top level managers get it, the data has been processed into highly summarised information, such as "statewide loaf production this month" and "top selling specialty breads".
Middle managers would be dealing with more specific information such as the number of ovens needing repair, quantities of bread-making ingredients required for the month ahead, and the problem of getting qualified bakers in rural New South Wales.
Operational managers, such as supermarket managers, would be concerned with day-to-day data such as employees' time cards, illnesses and injuries, the problem with sourdough loaves not rising, lack of soap in the staff washrooms etc.