Organizational Planning

& Goal Setting

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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.

Plan

GoalA desired future state that the organization attempts to

realize.

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Levels of Goals/Plans

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Goals and Plans Purposes

Legitimacy/Mission Statement

Describes values, aspirations, and reason for being.Focuses 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 direction.Focus attention on specific targets.Direct efforts toward important outcomes.

What the organization stands for.

Standard of PerformanceServe as performance criteria.Provide a standard of assessment.

Inside Motorola

Peter Drucker’s Eight Content Areas in Developing Goals

Marketing.Innovation.Productivity.Physical and financial resources.Profitability.Managerial performance and development.Worker performance and attitude.Public responsibility.

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Overall Planning Process

Begins With: Mission statement Strategic goals

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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.• Blueprint that defines the organizational activities and

resource allocations.

Tactical Goals and Plans

Tactical Goals

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

Tactical PlansPlans designed to help execute major strategic plans.

Operational Goals and Plans

Operational GoalsSpecific, measurable results expected from

departments, work groups, and individuals.

Operational PlansOrganization’s lower levels that specify action

steps toward achieving operational goals.

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Planning Time Horizon

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Means End-Chain

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

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Characteristics ofEffective Goal Setting

Goal Characteristics

Specific and measurable.

Cover key result areas.

Challenging but realistic.

Defined time period.

Linked to rewards.

Model of the MBO ProcessStep 1: Setting Goals Step 2: Developing Action Plans

Step 3: Reviewing Progress

Corporate Strategic Goals Departmental Goals Individual 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 MBO1. 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.www.cfcsoftware.com

Plans

Single-UseStandingContingency

Crisis ManagementThree Stages

PreventionPreparationContainment

The New Planning Paradigm

Six Rules of Planning

Start with a Strong Mission

Set Stretch Goals

Create an Environment

that Encourages

Learning

Design New Roles

for Planning

Staff

Use Temporary Task Forces

Planning Still Starts and Stops at the Top

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Strategic Management Questions

What changing 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

Identify Strategic Factors•Strengths

•Weaknesses

Scan Internal Environment

•Core Competence

•Synergy

•Value Creation

Identify

Strategic:•Corporate

•Business

•Functional

Define New:•Mission

•Goals

•Grand Strategy

Evaluate Current:•Mission

•Goals

•Strategies

Scan External Environment•National

•Global

•Opportunities

•Threats

Identify Strategic Factors

SWOT

Implementing Strategy via Changes in:•Structure

•Human resources

•Information & control systems

Porter’s Competitive Forces

Potential new entrants

Bargaining power of buyers

Bargaining power of suppliers

Threat of substitute products

Rivalry among competitors

Beware

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The Five Forces Affecting Industry Competition

SOURCES: Based on Michael E. Porter, Competitive Strategy: Techniques for Analyzing Industries and Competitors (New York: Free Press, 1980); and Michael E. Porter, “Strategy and the Internet,” Harvard Business Review (March, 2001), 63-78.

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Competitive Strategies

1. Differentiation2. Cost Leadership3. Focus

Partnership Strategies“Collaboration”

High

Low

Organizational

Combination

Strategic

Alliance

Degree of Collaboration

Preferred Supplier Arrangements

Strategic Business Partnering

Joint Ventures

Mergers

Acquisitions

Source: Adapted from Roberta Maynard. “Striking the Right March,” Nation’s Business (May 1996), 18-28.

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Tools for Putting Strategy into Action

SOURCE: Adapted from Jay R. Galbraith and Robert K. Kazanjian, Strategy Implementation: Structure, Systems, and Process, 2d ed. (St. Paul, Minn.: West, 1986), 115. Used with permission. www.cfcsoftware.com