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Goal Setting &Planning

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Goals and Plans

A blueprint of the actionsnecessary to reach the desired

goal.

Goal

A desired future state that the

organization wants to achieve.

Plan

What do we want?

How do we get there?

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Levels of Goals/Plans - NASA

MissionStatement

StrategicGoals

StrategicPlans

Senior Management

A Mission Statement describes our purpose.

Strategic level is the Big Picture.

Tactical Goals Tactical Plans

Middle Management

Operational Goals Operational Plans

Lower Management

Tactics break strategies into steps.

And smaller steps.

Everything we do is focused on getting there.

Take a man to the moon by 1970.

Build a rocket and launch pad.

Build part of a rocket.

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Mission Statement

MissionStatement

Answers the question: What drives us?

Beat GM!

A good Mission Statement:

Elicits an emotional, motivational response in company

employees.

Is easily understood and can be transferred into individual

action.

Points to a tangible and measurable goal.

Speaks to the competitive environment in which the

company operates.

Honda

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Mission Statement

MissionStatement

A Mission Statementpoints to goals that are

definable, measurable, actionable, and with emotional

appeal that everyone understands and can act upon.

Principles of Management

An Organizations Mission:

Reflects managements vision ofwho the firm serves.

Provides a clear vision ofwhatthe firm provides customers.

Directs managers where the firm should be staking out a

competitive position in the marketplace.

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MissionStatement

To provide any customer a means of moving people

and things up, down, and sideways over short

distances, with higher reliability than any similar

enterprise in the world.

Elevator

Mission Statement

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MissionStatement

To offer food prepared in the same high-quality

manner world-wide, tasty, reasonably priced, and

delivered in a consistent, low-key and friendlyatmosphere.

Mission Statement

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Mission

Statement

To offer all of the fine customers in our territories

all of their household needs in a manner in which

they continue to think of us fondly.

Mission Statement

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MissionStatement

To provide our customers with error-free financial

instruments delivered in a timely fashion. Error-free

means absolutely no errors. Timely means within48 hours.

Mission Statement

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StrategicGoals

StrategicPlans

Senior Management

Strategic level is the Big Picture.

Strategic Goals and Plans

An Organizations Strategic Goals:

Helps managers at lower levels focus. Avoids pitfall of them

trying to move in too many directions at once.

Lower level managers know where the firm is at present.

And know where the firm is headed.

Senior Management formulates Strategic Goals so:

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StrategicGoals

StrategicPlans

Senior Management

Strategic Goals and Plans

Protect and improve Nikes position as the number one athletic

brand in America.

Intensify the companys effort to develop products that women

want and need. Explore the market for products specifically designed for the

requirements of maturing Americans.

Continue the drive for increased margins through inventory

management and new product development.

Nike

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Tactical and OperationalGoals and Plans

Tactical Goals Tactical Plans

Middle Management

Operational Goals Operational Plans

Lower Management

Tactics break strategies into smaller

more specific steps .

And operational goals are

even more specific steps .

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Tactical and OperationalGoals and Plans

Strategic Goal: Build momentum in fitness market.

Marketing manager works with advertising manager and sales

manager to devise point-of-purchase displays for fitness

centers. Sales manager incorporates sales calls to fitness

centers in each salespersons sales plan.

Strategic Goal: Increase margins via inventory management.Purchasing managers evaluate production lead times and

tighten ROPs. Information Technology manager assigns

inventory analyst to task of updating with more current

software.

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Our Mission Statement:Our goal is to help our customers increase the publics awareness

of their names by providing them with premium bottled water

labeled with their own name.

Cool Bottled Water, Inc.

Cool Bottled Wateris a company that sells private label water

drawn from the Sammamish Slough near Woodinville, Washington

State. Private Label refers to the labeling of the bottles. Majorcompanies and restaurant chains that want to create brand

awareness order bottles to be labeled with their own custom

brand.

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Strategic Goal:

To develop a source of water, a bottling plant, and a marketing team

to develop and promote the product to large companies and

restaurant chains in Washington, Oregon, and California, and to

launch Day Zero on August 15th, 2002. To achieve ROI of 15%.

Strategic Level

Strategic Plan:

Product development will be the responsibility of the Research

and Development team, who are charged with maintaining purity

and clarity standards.

Production will be the responsibility of the Production and

Warehouse Team. Plant specifications to be suited to needs.

MarketingPlan developmentwill be the responsibility of theMarketing team.

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Tactical Goal Production Team

Produce bottled water per industry specifications for less than 35

cents per unit.

Tactical Plan Production Team

Water will be drawn from two locations along the Slough on

properties owned by the Clapping Hands Ranch. Water rights will be

secured starting Day Zero minus 90 for 99 years via a mineral rights

lease attached to the deed of the Ranch, which will be binding on

subsequent owners. The water will be tested monthly for purity, andbottled in the companys bottling plant in Woodinville adjacent to the

south source. The north-source water will be piped approximately

one mile to the bottling plant. Approximately 500 gallons are

available each day, and will be bottled in clear plastic 1/8th gallon

bottles with safety caps.

Tactical Level

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Operational Goal Bottling Team Sub-unit of Production Team

Acquire bottling equipment of sufficient capacity and technology to

maintain output and quality standards.

Operational Plan Bottling Team Sub-unit of Production Team

Prepare RFP for equipment called out in specifications from

Research and Development. Consider cost, ease of

operation, reliability, and productivity, and chooseappropriate equipment.

Install equipment per factory specifications by Day Zero 95.

Test output for 90 days prior to Day Zero.

Operational Level

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Cool Bottled Water, Inc.Cash Flow Analysis

12 Months Ending 12-31-03

May (2.25%) June (3.25%) July (5.25%) August (6.25%)September (7%) October (8%) November (9%) ecember (10% January (11%) February (12%)Revenue $16,734 $24,172 $39,047 $46,484 $52,063 $59,500 $66,938 $74,375 $81,813 $89,250

Cost of Goods SoldBeginning Inventory $20,573 $20,573 $20,573 $20,573 $20,573 $20,573 $20,573 $20,573 $20,573 $20,573+ Purchases $5,555 $8,023 $12,961 $15,430 $17,281 $19,750 $22,219 $24,688 $27,156 $29,625

= Total Goods Available for Sale $26,128 $28,596 $33,534 $36,003 $37,854 $40,323 $42,792 $45,261 $47,729 $50,198- Ending Inventory $20,573 $20,573 $20,573 $20,573 $20,573 $20,573 $20,573 $20,573 $20,573 $20,573Total Cost of Goods Sold $5,555 $8,023 $12,961 $15,430 $17,281 $19,750 $22,219 $24,688 $27,156 $29,625

Gross Profit $11,180 $16,148 $26,086 $31,055 $34,781 $39,750 $44,719 $49,688 $54,656 $59,625

Operating ExpensesExecutive Salaries ($50k each) $20,833 $20,833 $20,833 $20,833 $20,833 $20,833 $20,833 $20,833 $20,833 $20,833Payroll (20% of Sales) $3,347 $4,834 $7,809 $9,297 $10,413 $11,900 $13,388 $14,875 $16,363 $17,850Rent ($5k/mo) $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000

Advertising $15,250 $0 $0 $0 $0 $0 $0 $0 $0 $0Depreciation $250 $250 $250 $250 $250 $250 $250 $250 $250 $250Utilities $250 $250 $250 $250 $250 $250 $250 $250 $250 $250Professional Services $500 $0 $0 $500 $0 $0 $500 $0 $0 $500Insurance $1,500 $0 $0 $0 $0 $0 $0 $0 $0 $0Licenses $500 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Operating Expenses $47,430 $31,168 $34,143 $36,130 $36,746 $38,233 $40,221 $41,208 $42,696 $44,683

Net Income Before Federal Tax -$36,251 -$15,019 -$8,057 -$5,076 -$1,965 $1,517 $4,498 $8,479 $11,960 $14,942

Federal Income Tax (25%) -$9,063 -$3,755 -$2,014 -$1,269 -$491 $379 $1,124 $2,120 $2,990 $3,735

Net Profit -$27,188 -$11,264 -$6,043 -$3,807 -$1,473 $1,138 $3,373 $6,359 $8,970 $11,206

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Model of the MBO Process

Step 1: Setting Goals Step 2: Developing Action Plans

Step 3:

Reviewing Progress

Corporate Strategic GoalsDepartmental GoalsIndividual Goals

Step 4: Appraising Overall

Performance

Appraisal of Overall Performance

Corrective Action

Review Progress

Action Plans

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MBO Benefits and Problems

Benefits of MBO Problems with MBO

1. Manager and employee efforts

are focused on activities that

will lead to goal attainment.

2. Performance can be improved

at all company levels.

3. Employees are motivated

4. Departmental and individual

goals are aligned with company

goals.

1. Constant change prevents MBO

from taking hold.

2. An environment of poor employer-employee relations reduces MBO

effectiveness.

3. Strategic goals may be displaced by

operational goals.

4. Mechanistic organizations and

values that discourage participation

can harm the MBO process.

5. Too much paperwork saps MBO

energy.

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Single-Use Plansfor Goals not Likely to be Repeated

A program is a complex set of objectivesand plans to achieve an important, one-time

organizational goal.

A project is similar to a program, but

generally smaller in scope and complexity.

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Standing Plans

A policy is a general guide to action and providesdirection for people within the organization.

Rulesdescribe how a specific action is to be performed. Proceduresdefine a precise series of steps to be used in

achieving a specific job.

Total quality management (TQM) to improve quality andproduction.http://www.dbainc.com/public_html/dba2/library/tqm.html

6 SigmaContinuous evaluation and improvement.

http://www.isixsigma.com/sixsigma/six_sigma.asp

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http://www.dbainc.com/public_html/dba2/library/tqm.htmlhttp://www.dbainc.com/public_html/dba2/library/tqm.htmlhttp://www.isixsigma.com/sixsigma/six_sigma.asphttp://www.isixsigma.com/sixsigma/six_sigma.asphttp://www.dbainc.com/public_html/dba2/library/tqm.htmlhttp://www.dbainc.com/public_html/dba2/library/tqm.html

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Contingency Plans

May be defined as scenarios.Define company responses to be taken in case

of setbacks or unexpected conditions.

Is just rolling the

dice good enough?

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Strategic Planning

Strategy = The plan of action that describesresource allocation & activities for dealing

with the environment to attain organizational

goals.

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Strategic ManagementQuestions

What changes and trends are occurring?

Who are the customers?

What products or services should we offer?

How can we offer these products or services

efficiently?

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Strategic Management Process

Situation Analysis via SWOT

Identify StrategicFactors

Strengths

Weaknesses

Scan InternalEnvironment

Core

Competence

Synergy

Value Creation

IdentifyStrategic:

Corporate

Business

Functional

Define New:Mission

Goals

Grand Strategy

Evaluate Current:Mission

Goals

Grand Strategy

Scan ExternalEnvironment

National

Global

Opportunities

Threats

Identify StrategicFactors

SWOT

Implementing Strategy

via Changes in:Structure

Human resources

Information &

control systems

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External Opportunities and Threats

The Economy

Trends in Technology

Legal and Political Factors

Customerswhat will they want?

Competitorswhat will emerge?