What is the importance of management setting strategy and objectives?

The significance of management setting strategy and objectives primarily lies in the ability to maximize value by effectively balancing growth, return goals, and risks. This involves establishing clear, defined goals that align with the overall vision of the organization. By doing so, management can make informed decisions that drive the company forward, ensuring that there is a coherent direction for all departments and activities.

Balancing growth and return goals with risks involves understanding the marketplace and navigating uncertainties, which is crucial for sustainable performance. A well-defined strategy helps in resource allocation, prioritizing initiatives that contribute to long-term success while mitigating risks that could jeopardize those objectives. This not only enhances the potential for profitability but also secures a competitive advantage in the industry, contributing to the overall resilience of the organization.

In contrast, while eliminating competition, creating a hierarchical structure, and ensuring compliance are important aspects of organizational management, they don't capture the core purpose of setting strategy and objectives. The focus on value maximization through strategic coherence is foundational for guiding all other efforts within the organization.