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PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6±1
CHAPTER 6
ESTABLISHING
ORGANISATIONALGOALS & PLANS, THEN
DEVELOPING
STRATEGY
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THE PLANNING PROCESS
MissionThe organisation¶s purpose or fundamentalreason for existence
GoalFuture target or end result an organisation wishesto achieve
PlanMeans devised for attempting to reach a goal
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THE PLANNING PROCESS
mission goals plans
Goal attainment(organisational
efficiency
& effectiveness)
Setting goals & developing plansleads to goal attainment and ultimately,
to organisational efficiency & effectiveness
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ORGANISATIONAL MISSION
µEssentially, planning builds onthe organisation¶s mission, the
organisation¶s purpose or fundamental reason for existence.¶
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ORGANISATIONAL MISSION
The basic purposes that a mission statement serves: For managers it serves as a bench mark against which to evaluate
success
For employees, a mission statement defines a common purpose,nurtures organizational loyalty, & fosters a sense of communityamong workers.
For external parties it helps to provide a unique insight into theorganization¶s values and future directions.
9 Major Components of a Mission Statement:
Customers, Products & Services, Markets,T
ech
nology, Concern for Survival, Growth
&Profitability, Philosophy, Self Concept, Concern for Public Image, Concern for Employees.
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EXAMPLE«
AMOCO (Corp)
Mission Statement
Amoco is a world wide integrated petroleum and
chemical company. We find and develop petroleum
resources and provide quality products and services
to our customers. We conduct our business
responsibly to achieve superior financial returnbalanced with our long-term growth, benefiting
shareholders and fulfilling our commitment to our
community and environment
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NATURE OF
ORGANISATIONAL GOALS
Benefits of goals ± Increase performance
± Clarify expectations
± Facilitate control ± Increase motivation
Levels of goals ± Operational goals (base)
± Tactical goals (mid)
± Strategic goals (top)
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Strategic Goal
³ Double company revenues in 2 years through marketdevelopment and market penetration (current revenues are $2million)´
Tactical Goal
³ Increase the northern division¶s revenue by 50% this year and 50% next year´
Operational Goal ³ Develop two new products this year that are successfully
marketed´ ³Increase Production efficiency by 30% this year´ ³Increase number of salespeople by 40 this year´ ³Reduce Employee absenteeism from 10% to 5% this year´
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GOALS AND PERFORMANCE
Key aspects:
Goal content (channelling effort
towards achievement) Goal commitment
Work behaviour
Other process components
Possible problems
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GOAL CONTENT: Challenging
Attainable
Specific & measurable Time-limited
Relevant
GOAL
COMMITMENT:
Influenced by:Supervisory authority
Peer & group pressure
Public display
Expectations of success
Incentives & rewardsParticipation
WORK BEHAVIOUR :Goals & commitment affect work
behaviour
DirectionEffort
Persistence
Planning
Job process components affect
performance:Job knowledge & ability
Task complexity
Situational constraints(tools, materials,
equipment)
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LINKING GOALS & PLANS
Levels of plans: Strategic
Operational
Tactical
Recurring use: Single-use: programs and projects
Standing plans: policies, procedures, rules
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Programs: comprehensive plan coordinating a setof activities for a major non recurring goal.
Involves different organizational units, compriseseveral projects
Over a year to complete
Project is a plan coordinating a set of limited scopeactivities not needing to be divided into major
components to reach an important non-recurringgoal.
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Standing plans
Policy: general guide specifying broad parameterswithin which organizational member operate
Do not dictate specific actions, provide generaboundaries
Procedure: set of series of steps to be taken incertain recurring circumstances. E.g. SOP
These are detailed and step by step instructionsare spelled out
Rule is a statement spelling out specific actions tobe taken or not taken in a situation.
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LINKING GOALS & PLANS
Time horizons of goals/plans: Short
Intermediate
Long range
Promoting innovation by: Mission statement:
Goal content & process
1. Within 5 years, the organisation will be #1 provider of thestate of art semi conductor chips.
2. Within 2 years the programmable logic devises division willintroduce 20 new products
Planning content & process
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OBSTACLES TO PLANNING
Domination by specialists
Low levels of manager skill & knowledge
Pressure of day-to-day work
Manager hostility
Environmental change
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OBSTACLES TO PLANNING
REDUCING PLANNING OBSTACLES
Use of planning staff
Small group who assist managers in planning
Use contingency planning
Development of alternative plans
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MANAGEMENT BY OBJECTIVES
Process through which specific goalsare set collaboratively for theorganisation as a whole and every
unit within it; the goals are then usedas a basis for planning, managingorganisational activities, andassessing and rewardingcontributions.
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MANAGEMENT BY OBJECTIVES
Steps in the MBO process:
Develop organisational goals
E
stablish specific goals for departments Formulate action plans
Implement & maintain µself-control¶
Review progress periodically
Appraise performance
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MANAGEMENT BY OBJECTIVES
Strengths: Helps link goals & plans
Clarifies priorities, expectations
Fosters organisational communication
Builds member motivation
Weaknesses: Needs strong, enduring commitment
Requires training of managers
May be misused(i.e. for punishment)
Risk of dominance of quantitative goals