Lec5 chp6

Managerial Planning and Goal Setting

CHAPTER 6

chapter6

Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

2

• Define goals and plans and explain the relationship between them.

• Explain the concept of organizational mission and how it influences goal setting and planning.

• Describe the types of goals an organization should have and how managers use strategy maps to align goals.

• Define the characteristics of effective goals.

• Describe the four essential steps in the management by objectives (MBO) process.

• Explain the difference between single-use plans and standing plans.

• Describe and explain the importance of contingency planning, scenario building, and crisis planning in today’s environment.

• Summarize the guidelines for high-performance planning in a fast-changing environment.

Learning Outcomes

chapter6


3

Overview of Goals and Plans

• A goal is a desired future state that the organization attempts to realize

• A plan is a blueprint for goal achievement

• There are different levels of planning and goals in an organization

• Goals at each level of the organization guide the organization

chapter6


4

Levels of Goals/Plans and their Importance

chapter6


5

Characteristics of Goals and Plans

Legitimacy

Source of motivation and commitment

Resource allocation

Guides to action

Rationale for decisions

Standards of performance

chapter6


6

The Organizational Planning Process

chapter6


7

Organizational Mission

• The mission statement is the reason the organization exists– Top of the goal hierarchy– Describes the values, aspirations and reason

for being– A well-defined mission is the basis for all

other goals

• Mission statements outline the stated purpose and values to stakeholders

chapter6


8

Types of Goals and Plans

• Strategic Goals – official goals, broad statements about the organization– Define the action steps the company intends to attain– The blueprint that defines activities

• Tactical Goals – help execute major strategic plans– Specific part of the company’s strategy– Plans of the divisions and departments

• Operational Goals – results expected from departments, work groups, and individuals– Lower levels of the organization– Specific action steps

chapter6


9

Aligning Goals with Strategy Maps

• Goals should be consistent and mutually supportive

• The achievement of goals at low levels permits the attainment of high-level goals

• Individuals, teams, and departments should be working in concert

chapter6


10

Strategy Map for Aligning Goals

Goals should be consistent

and mutually

supportive

chapter6


11

Operational Planning

• Operational goals should direct employees and resources toward outcomes

• It is important to establish effective goals– Management by objective– Single-use plans– Standing plans

chapter6


12

Characteristics of Effective Goal Setting

chapter6


13

Management by Objective

Defined by management scholar Peter Drucker in his 1954 book, The Practice of Management

Process of defining goals and monitoring progress

chapter6


14

Model of the MBO Process

chapter6


15

MBO Benefits and Problems

chapter6


16

Single-Use and Standing Plans

chapter6


17

Planning for a Turbulent Environment

• Contingency Planning – plans for emergencies, setbacks or unexpected conditions

• Building Scenarios – visualizing future possibilities

• Crisis Planning – preparing to cope with unexpected events

chapter6


18

Essential Stages of Crisis Planning

chapter6


19

Planning for High Performance

Traditional Approach:• Done by top

executives (top down)• Central planning

departments• Planning specialist

High-Performance Approach:

• Decentralized planning• Managers plan

throughout the organization

• Now involves line-managers and employees

• Dynamic plans for fast-changing needs

Stretch Goals and Big Hairy Audacious

Goals (BHAG) are big and inspiring

chapter6


20

Performance Dashboard for Planning

• Gauge progress toward goals

• Align and track goals

• All employees can track progress

Lec5 chp6

Business

division ofcengage learning

organization goals

organization copyright

achievement of goals

strategic goals official

overview of goals

learning outcomes

importance copyright