5-1 Planning and Goal Setting Copyright © 2006 by South-Western, a division of Thomson Learning. All rights reserved. Chapter 5

5-1

Planning and Goal Setting

Copyright © 2006 by South-Western, a division of Thomson Learning. All rights reserved.

Chapter 5

© 2006 by South-Western, a division of Thomson Learning. All rights reserved. 5-2

Read “Benchmarking” p. 159

1. Is Nintendo successful?

2. How has Nintendo used innovative ideas to create new products?


Goals and Plans

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

Planning is considered the most fundamental management function – and the most controversial. Why?

Plan

GoalA desired future state that the organization attempts to

realize.


Are you an Effective Planner?1. Give an example of a personal goal.

2. Do you use a calendar/ scheduler/ appt. book?

3. Do you set priorities? Give an example.

4. Do you set deadlines? Give an example.

5. Are most your days hectic & disorderly?

6. Do you believe you are a good planner?


Ex. 5.1 Levels of Goals/Plans and Their Importance


Mission StatementWhat is a mission statement?

* What the organization stands for

* Describes values and aspirations

* Focuses on customers, values, product quality, and attitude toward employees.


Ben & Jerry’s Mission To make, distribute, & sell the finest quality

all natural ice cream & euphoric concoctions with continued commitment to incorporating wholesome, natural ingredients and promoting business practices that respect the Earth and the Environment.

What does this statement really tell you about the company?


Purposes of Goals and Plans Legitimacy/mission statement Source of motivation and commitment Rationale for decisions Guides to action Resource allocation Standard of performance


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 Plans

Plans designed to help execute major strategic plans.


Operational Goals and Plans

Operational GoalsSpecific, measurable results expected from

departments, work groups, and individuals.

Operational Plans

Organization’s lower levels that specify action steps toward achieving operational goals.


Ex. 5.4 Characteristics of Effective Goal Setting

Goal Characteristics

Specific and measurable.

Cover key result areas.

Challenging but realistic.

Defined time period.

Linked to rewards.


Planning Types Management by Objectives (MBO) Single Use Plans Standing Plans Contingency Plans


Ex. 5.5 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

Appraise Performance

Take Corrective Action

Review Progress

Action Plans


Ex. 5.6 MBO Benefits and ProblemsBenefits Manager and employee efforts are focused on

activities that will lead to goal attainment. Performance can be improved at all company levels. Employees are motivated. Departmental and individual goals are aligned with

company goals.


Ex. 5.6 MBO Benefits and Problems (contd.)

Problems Constant change prevents MBO from taking hold. An environment of poor employer-employee

relations reduces MBO effectiveness. Strategic goals may be displaced by operational

goals. Mechanistic organizations and values that

discourage participation can harm the MBO process. Too much paperwork saps MBO energy.


Plans – see Exhibit 5.7, page 165

Single-Use Standing Contingency

Crisis ManagementThree Stages

Prevention Preparation Containment


Strategic Management

Set of decisions and actions used to formulate and implement strategies that will provide a competitively superior fit between the organization and its environment so as to achieve organizational goals

Set of decisions and actions used to formulate and implement strategies that will provide a competitively superior fit between the organization and its environment so as to achieve organizational goals


Strategic Management Questions What changes and trends are occurring? Who are our customers? What do they want? What products/services should we offer? How can we offer these products/services

efficiently?

Did Nintendo do a good job with Strategic Management?


Strategic Management What does “competitive” mean? What is a “competitive advantage”? What is a “core competency”?


Ex. 5.10 The 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


Southwest Airlines – SWOT SWA is a low cost, short haul, point-to-point air

carrier.Primary Goal: LOW cost/customer serviceInternal Strengths_____________Internal Weaknesses ______________External Opportunities _____________External Threats _____________Resulting Strategies:


Kraft Foods - SWOTRead “Kraft Foods”, p. 177

1. List one Kraft strength: _____________

2. List one Kraft weakness: ____________

3. List one Kraft opportunity: _____________

4. List one Kraft threat: _______________

5. List one Kraft Strategy resulting from these events: _____________________________


Formulating Strategies How do we decide what strategies work best? Create strategies based on assessment of the

competitive forces that effect the business. Porter’s 5 Forces Model (See exhibit 5.12, pg.

178)


Porter’s Competitive Forces

Potential new entrants

Bargaining power of buyers

Bargaining power of suppliers

Threat of substitute products

Rivalry among competitors

Beware


Ex. 5.12 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.


Competitive Strategies (see exhibit 5.14, p. 180)

1. Differentiation: how will you make your product different from the competition? Ex. Auto industry.

2. Cost Leadership: how will you aggressively cut costs and produce more efficiently? Ex. Walmart

3. Focus: how can you concentrate on a specific market or group, adopting a Niche Strategy? Ex. SAS


Ex. 5.15 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.


Conclusion Why do we need goals? What do we need in addition to goals? What is strategic management? What is SWOT analysis? What are the 3 competitive strategies? How do companies “Win” in the

marketplace?

Documents

5-1 Planning and Goal Setting Copyright © 2006 by South-Western, a division of Thomson Learning. All rights reserved. Chapter 5