Planning compiled

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Organizational Planning and Goal Setting


Planning/Goals

• Of the four management functions, planning, organizing, leading, and controlling, planning is the most important.

• An organization exists for a single purpose, known as its mission, which is the basis for strategic goals and plans.


The Importance of Goals and Plans

Guides to action

Rationale for decisions Standard of performance

Goals and Plans


Goals and Plans

• A blueprint specifying the resource allocation, schedules, and other actions necessary for attaining goals.

• Planning is considered the most fundamental function.• Planning is the most controversial management function.

Plans

GoalA desired future state that the organization attempts to

realize.


Goals, plans and the relationship between them

• Goals are the targets that will get the organization to the vision’s achievement

• Plans are the “how-to” or strategy that achieves the goals.


Who Does the Planning?

• Traditional Approach– Top management or central planning department

• Modern Approach– Decentralized planning staff– Interdepartmental task force composed of line managers.

• Planning under the New Paradigm– Plans developed from the bottom up– Managers are facilitators, helping workers to develop plans to

achieve goals


Define Vision and Mission

• MissionMission- The reason a company or organization exists.

• The starting point for the planning process.• It is oriented in the present• VisionVision-Where an organization sees itself in the

future.• A picture of the future that comes from organizational

imagination


Goals and plans within the organization are defined in a hierarchical fashion:

Strategic, Tactical Operational.


Mission Statement

Strategic Goals/Plans Senior Management

(Organization as a whole)

Tactical Goals/Plans Middle Management

(Major divisions, functions)

Operational Goals/Plans Lower Management

(Departments, individuals)

Internal Message Legitimacy,

motivation, guides, rationale,

standards

External Message Legitimacy for

investors, customers, suppliers, community

Levels of Goals/Plans & Their Importance


Kinds of Goals for a Regional Fast-Food

Chain

Accounting manager

ï Split accounts receivable/payable functions from other areas within two yearsï Computerize payroll system for each restaurant this yearï Pay all invoices within thirty days

Advertising director

ï Develop regional advertising campaigns within one yearï Negotiate 5 percent lower advertising rates next yearï Implement this yearís promotional strategy

Restaurant manager

ï Implement employee incentive system within one yearï Decrease waste by 5 percent this yearï Hire and train new assistant manager

Vice president ñfinance

ï Keep corporate debt to no more than 20 percent of liquid assets for next ten yearsï Revise computerized accounting system within five yearsï Earn 9 percent on excess cash this year

President and CEO

ï Provide 14 percent return to investors for at least ten yearsï Start or purchase new restaurant chain within five yearsï Negotiate new labor contract this year

Mission: Our mission is to operatea chain of restaurants that willprepare and serve high-qualityfood on a timely basis and atreasonable prices.

Vice president ñmarketing

ï Increase per store sales 5 percent per year for ten yearsï Target and attract two new market segments during next five yearsï Develop new promotional strategy for next year

Vice president ñoperations

ï Open 150 new restaurants during next ten yearsï Decrease food-container costs by 15 percent during next five yearsï Decrease average customer wait by thirty seconds this year

Strategic Goals

Tactical Goals

Operational Goals

Figure 7.2


Goals and Plans for External and Internal Audiences

Legitimacy

Symbolizes legitimacyDescribes values, aspirations, and reason for beingFocuses on, customers, corporate values, product quality, and attitude toward employees

Source of Motivation and CommitmentFacilitate employees’ identification with the organization

Guides to ActionProvide a sense of directionFocus attention on specific targetsDirect efforts toward important outcomes

What the organization stands forStandard of PerformanceServe as performance criteria

Provide a standard of assessment

Inside Motorola: Motorola is a global leader in providing integrated communications

solutions and embedded electronic solutions.

http://www.motorola.com/content/0,1037,1,00.html


Strategic Goals and Plans

Strategic Goals• Where the organization wants to be in the future

• Pertain to the organization as a whole

• Strategic Plans• Action Steps used to attain strategic goals• Blueprint that defines the organizational activities and resource

allocations• Tends to be long term


Tactical Goals and Plans

Tactical GoalsApply to middle management

Goals that define the outcomes that major divisions and departments must achieve

Tactical PlansPlans designed to help execute major strategic plans

Shorter than time frame than strategic plans


Developing and Executing Tactical Plans

Developing tactical plans• Recognize and understand

overarching strategic plansand tactical goals

• Specify relevant resource andtime issues

• Recognize and identify humanresource commitments

Executing tactical plans• Evaluate each course of action

in light of its goal• Obtain and distribute

information and resources• Monitor horizontal and vertical

communication and integrationof activities

• Monitor ongoing activities forgoal achievement

Figure 7.4


Operational Goals and Plans

Operational Goals Specific, measurable results expected from

departments, work groups, and individuals

Operational PlansOrganization’s lower levels that specify action

steps toward achieving operational goals

Tool for daily and weekly operations

Schedules are an important component


Types of Operational Plans

Plan Description

Single-use plan Developed to carry out a course of action not likely to be repeated in the future

Program Single-use plan for a large set of activities Project Single-use plan of less scope and complexity than a

program

Standing plan Developed for activities that recur regularly over a pe-riod of time

Policy Standing plan specifying the organization’s general response to a designated problem or situation

Standard operating procedure Standing plan outlining steps to be followed in particu-lar circumstances

Rules and regulations Standing plans describing exactly how specific activi-ties are to be carried out

Table 7.1


Single-Use PlansFor Goals Not Likely To Be Repeated

A program is a complex set of objectives and plans to achieve an important, one-time organizational goal

A project is similar to a program, but generally smaller in scope and complexity


Standing Plans

A policy is a general guide to action and provides direction for people within the organization

Rules describe how a specific action is to be performed

Procedures define a precise series of steps to be used in achieving a specific job


Contingency Planning

Ongoing planning process

Action point 1 Action point 2 Action point 3 Action point 4Develop plan,consideringcontingency events

Implement plan andformally identifycontingency events

Specify indicatorsfor the contingencyevents and developcontingency plans foreach possible event

Successfully completeplan or contingencyplan

Monitor contingency event indicators andimplement contingency plan if necessary

Figure 7.3


Considerations For Contingency Planning

• Identify uncontrollable factors;– recession– inflation– technological developments

• Minimizing Impact of Uncontrollable Factors– forecast for worst-case scenarios


Criteria for effective Goals

• Specific• Measurable• Time Constrained• Achievable• Relate to something important


Characteristics of EffectiveGoal Setting

Goal Characteristics

Specific and measurable

Cover key result areas

Challenging but realistic

Defined time period

Linked to rewards


Barriers to Goal Setting and Planning

Major Barriers Inappropriate goals Improper reward system Dynamic and complex environment Reluctance to establish goals Resistance to change Constraints

Overcoming the Barriers Understanding the purposes of goals and planning Communication and participation Consistency, revision, and updating Effective reward systems

Table 7.2

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