Goal Programming: An Effective ToolIn Commercial Bank Management

Organization theorists tell us that all of the constituents of organizations have individual goals which they expect to be satisfied by organizational activity.They also tell us that the supporting environment has goals for the organization which must be satisfied if the organization is going to continue to receive environmental support in the form of scarce resources and utilization of its output. Also, taken all together, organizational goals, member goals, and environmental goals may be conflicting. In an attempt to control at least a portion of the melange, Goal Programming (GP) has been designed to attempt to deal with organizational goals. The assumption is that organizational decision makers can at least rank order their preferences of goal attain mentand, where goals may sometimes conflict, those conflicting goals may not be in direct opposition to each other and may vary in strength. This paper addresses the crucial problem which any bank faces in managing its portfolio. Further, the paper shows how GP can be an efficient tool in measuring the level of achievement of predetermined goals in commercial banks according to prioritized policies and regulations.