5-1
Planning and Goal Setting
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Chapter 5
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Read “Benchmarking” p. 159
1. Is Nintendo successful?
2. How has Nintendo used innovative ideas to create new products?
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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 management function – and the most controversial. Why?
Plan
GoalA desired future state that the organization attempts to
realize.
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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?
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Ex. 5.1 Levels of Goals/Plans and Their Importance
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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.
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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?
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Purposes of Goals and Plans Legitimacy/mission statement Source of motivation and commitment Rationale for decisions Guides to action Resource allocation Standard of performance
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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.
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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.
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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.
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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.
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Planning Types Management by Objectives (MBO) Single Use Plans Standing Plans Contingency Plans
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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
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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.
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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.
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Plans – see Exhibit 5.7, page 165
Single-Use Standing Contingency
Crisis ManagementThree Stages
Prevention Preparation Containment
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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
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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?
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Strategic Management What does “competitive” mean? What is a “competitive advantage”? What is a “core competency”?
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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
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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:
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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: _____________________________
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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)
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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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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.
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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
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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.