Every organization has some objectives, either specified or unspecified. Clearly defined objectives govern behavior of organization members, and as such, every organisation should specify its objectives clearly. However, contingency approach recognizes that in some situations, either it may not be possible to set specific objectives or it is not desirable to set objectives. For example, contingency approach suggests that: “In some situations, it is difficult or impossible to set goals. In fact, many managers realize that some of their most important planning takes place without even explicitly considering specific goals.
Such situations require directional objective setting which identifies preferred style of action for the organization or individual and an arena for activities. The emphasis switches from carefully formulating what objective is to be accomplished to consideration of a manager’s thrust. This approach is more flexible than traditional objective-setting approach and suggests that under three conditions, it is not desirable or possible to set objectives: (i) in the formative period of an organization’s development when it is too early to set objectives; (ii) when the environment in which the organization operates is unstable or uncertain owing to fast social, economic, technological, legal, or other changes; and (iii) when members cannot build enough trust or agreement to decide upon a common objective.
No doubt, in these situations, it may not be very desirable or possible to set objectives, but not all situations are like this. Specific objectives are appropriate in cases marked by the following conditions:
- Managers want to narrow the focus and efforts of organizational members;
- The environment is relatively stable and certain;
- There are severe time and resource limitations; and
- Organizational members require more specific conditions as a result of low tolerance for ambiguity and uncertainty.
Objectives should be specified because they perform a number of functions. For example, Drucker maintains that objectives are essential in all key areas where performance and results directly contribute to the growth and survival of business for enabling managers to:
- organize and explain the whole range of business phenomena by such objectives;
- verify the objective in actual business operation;
- predict employee behavior;
- vouchsafe the soundness of decisions; and
- Improve their performance.
