Chapter 7 Planning and Goal Setting PDF

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. ❖ Planning is the most fundamental of the four management functions. ❖ No plan can be perfect, but without plans and goals, organizati...

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. ❖ Planning is the most fundamental of the four management functions. ❖ No plan can be perfect, but without plans and goals, organizations and employees flounder. ❖ Good managers understand that plans should grow and change to meet shifting conditions. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 2  A goal is a desired future Planning circumstance or condition that incorporates the organization attempts to both ideas realize & means determining the organization’s A plan is a blueprint for goal goals and achievement and specifies the defining the necessary resource allocations, means for schedules, tasks, and other achieving actions them. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 ❖ The planning process starts with a formal mission that defines the organization’s basic purpose, especially for external audiences. ❖ The mission is the basis for the strategic (company) level of goals and plans, which in turn shapes the tactical (divisional) level and the operational (departmental) level. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 4 © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 5 ❖ Strategic goals and plans are the responsibility of top managers, that reflect a commitment to both organizational efficiency and effectiveness. ❖ Tactical goals and plans are the responsibility of middle managers, such as the heads of major divisions or functional units, that focus on the major actions the division must take to fulfill its part in the strategic plan set by top management. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 6 ❖ Operational goals and plans are the responsibility of frontline managers and supervisors, that focus on specific tasks and processes and that help meet tactical and strategic goals. ❖ Planning at each level supports the other levels. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 7 © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 8 ❖ Planning starts with the organization’s purpose or reason for existence, which is called its mission. ❖ Organizational mission – the organization’s reason for existence. ❖ A well-defined mission is the basis for the development of all subsequent goals and plans. ❖ A mission statement is a broadly stated definition of the organization’s basic business scope and operations. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 9 ❖ Strategic goals sometimes called official goals, are broad statements describing where the organization wants to be in the future. ❖ Strategic plans define the action steps by which the company intends to attain strategic goals. The strategic plan is the blueprint that defines organizational activities and resource allocations. ❖ Strategic planning tends to be long-term (2- 5 years in the future. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 10 ❖ Tactical goals are the results that major divisions and departments (middle management ) within the organization intend to achieve. The goals describe what major subunits must do in order for the organization to achieve strategic goals. ❖ Tactical plans define what major departments and organizational subunits will do to implement the organization’s strategic plan. They tend to be for a shorter time period (over the next year or so). © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 11 ❖ Operational goals are the specific results expected from departments, work groups, and individuals. ❖ Operational plans are developed at the lower levels of the organization to specify action plans toward achieving operational goals and to support tactical plans. They tend to be for daily and weekly operations. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 12 ❖ Effectively designed organizational goals and plans need to be in alignment so that they are consistent and mutually supportive. The achievement of goals at lower levels permits the attainment of higher-level goals. ❖ Organizational performance is an outcome of how well these interdependent elements are aligned so that ultimately the organization achieves high performance and fulfills its mission. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 13 ❖ Strategy maps are visual representations of the key drivers of an organization’s success; showing how specific goals and plans in each area are linked. ❖ They provide a powerful way for managers to see the cause-and-effect relationships among goals and plans. ❖ All employees can see what part they play in helping the organization accomplish its mission. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14 © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 15 ❖ Operational goals direct employees and resources toward achieving specific outcomes that enable the organization to perform efficiently and effectively. ❖ One consideration is how to establish effective goals. ❖ Managers use planning approaches such as: ❖ Management-by-objectives (MBO) ❖ Single-use plans ❖ Standing plans. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 16 © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 ❖ Specific and measurable - goals should be precise to allow for measurable progress, such as increasing profits by 2 percent, or increasing average teacher effectiveness ratings from 3.5 to 3.7. ❖ Defined time period - specifies the date on which goal attainment will be measured, such as setting a deadline for improving teacher effectiveness ratings by the end of the 2022 school term. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 18 ❖ Key result areas - managers must establish goals based on the idea of measurement and clarity. Choosing goals with clear measures of success can focus organizational attention, energy, and resources. ❖Key performance indicators (KPIs) are measures that reflect how well lower-level goals are helping the organization progress toward attaining its strategic goal. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 19 ❖ Challenging but realistic - When goals are unrealistic, they set employees up for failure and lead to a decrease in employee morale. However, if goals are too easy, employees may not feel motivated. ❖ Linked to rewards - goals achievement depends on salary increases, promotions, and awards. Employees pay attention to what gets noticed and rewarded in the organization. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 20 © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 21 ❖ Defined in 1954 by Peter Drucker, Management-by objectives (MBO) is a system whereby managers and employees define goals for every department, project, and person and use them to monitor subsequent performance. ❖ MBO includes the steps of (1) setting goals, (2) developing action plans, (3) reviewing progress, and (4) appraising performance. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 22 © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 23 © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 24 ❖ Focuses managers and employee efforts on activities that will lead to goal attainment. ❖ Employees feel a sense of ownership and commitment when they see how their performance contributes to the business. ❖ Employees are motivated. ❖ Improved performance at all company levels. ❖ Goals at lower levels are aligned and enable the attainment of higher-level goals. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 25 ❖ People may cut corners, ignore potential problems, or behave unethically just to meet the targets. ❖ Management by means (MBM) is a systematic approach, which focuses attention on the methods and processes used to achieve goals, rather than on the results. When managers pursue their activities in the right way, positive outcomes will result. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 26 ❖ Single-use plans are developed to achieve one-time goals that are not likely to be repeated in the future, such as programs and projects. ❖ Standing plans are ongoing plans that provide guidance for tasks or situations that occur repeatedly within the organization, organizational policies, rules, and procedures. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 27 ❖ Single-Use Plans ❖Program: building new headquarters, converting paper files to digital ❖Project: renovating the office, setting up a new company intranet © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 28 ❖ Standing Plans ❖Policy: Sexual harassment policies, Internet and social media policies ❖Rule: No eating rule in areas of company where employees are visible to public ❖Procedure: Procedures for issuing refunds, Procedures for handling employee grievances ❖ Standing plans generally pertain to matters such as employee illness, absences, smoking, discipline, hiring, and dismissal. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 29 © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 30 Benefits Goals and plans provide a source of motivation and commitment Goals and plans guide resource allocation Goals and plans are a guide to action Goals and plans set a standard of performance Limitations Goals and plans can create a false sense of certainty Goals and plans may cause rigidity in a turbulent environment Goals and plans can get in the way of intuition and creativity © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 31 ❖ Contingency Planning ❖Planning for emergencies, setbacks, or unexpected conditions ❖ Building Scenarios ❖A forecasting technique to look at current trends and discontinuities and visualize future possibilities ❖ Crisis Planning ❖Unexpected events that are sudden and devastating © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 32 © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 33 ❖ Crisis prevention - involves activities that managers undertake to try to prevent crises from occurring: ❖Building open, trusting relationships with key stakeholders (employees, customers, suppliers, governments, unions, and the community) ❖Detect warning signs from the environment of potential crises © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 34 ❖ Crisis preparation - includes all the detailed planning to handle a crisis when it occurs. ❖ Three steps in the preparation stage are: ❖(1) designating a crisis management team and spokesperson ❖(2) creating a detailed crisis management plan ❖(3) setting up an effective communications system © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 35 ❖ Crisis Management Team - a cross- functional group of people who are designated to swing into action if a crisis occurs. ❖ Crisis Management Plan (CMP) is a detailed, written plan that specifies the steps to be taken, and by whom, if a crisis occurs. ❖ Natural disasters like fires or earthquakes; ❖ Normal accidents like economic crises, industrial accidents, or product and service failures ❖ Abnormal events such as product tampering or acts of terrorism © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 36 ❖ Approaches to planning change with the times. ❖ Decentralized planning means that top executives or planning experts work with managers in major divisions or departments, line managers, and front-line employees to develop their own dynamic goals and plans that meet fast-changing needs. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 37 ❖ Stretch goals are reasonable yet highly ambitious, compelling, and imaginative goals that energize employees and inspire excellence. ❖ Stretch goals require people to be innovative to find ways to reach them. ❖ Goals must be seen as achievable or employees will be discouraged and demotivated, or resort to unethical measures to meet the targets. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 38 ❖ Like Big Hairy Audacious Goal (BHAG) from the 1996 article “Building Your Company’s Vision” describe any goal that is so big, inspiring, and outside the prevailing paradigm that it shifts employees thinking and can lead to bold, innovative breakthroughs. ❖ Stretch goals and BHAGS have become extremely important as times move faster and become more turbulent © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 39 ❖ Dashboards ❖keep track and deliver real-time key performance metrics ❖align and track goals across the enterprise ❖can be applied throughout the company on the factory or sales floor. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 40  41 © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. ❖ An intelligence team is a cross-functional group of managers, working together to gain a deep understanding of a specific competitive issue with the aim of presenting insights, possibilities, and recommendations about goals and plans related to the issue. ❖ Intelligence teams are useful when the organization confronts a major intelligence challenge. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 42 ❖ Strategic Planning serves a good starting point: ❖ Strategic Planning such as MBO, etc. may not be perfect in the real world. ❖ However, we have to get started with something. ❖ A manager must be flexible: ❖ Be willing to adapt the strategic plan to new environment: new competition, new law, new customers, new technologies, etc. ❖ Strategic planning must not discourage employees’ creativity and imagination. ❖ A manager must develop a contingency plan in conjunction with the strategic plan; expect the unexpected outcome; be willing to admit a possibility of failure. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 43