1. Understanding Management First Canadian Edition Slides prepared by
Janice Edwards
College of the Rockies
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2. Organizational Goal Setting and Planning
Chapter 5
Organizational Goal Setting and Planning

3. Copyright © 2009 Nelson Education Ltd.
Learning Objectives
Define goals and plans and explain the relationship between them.
Explain the concept of organizational mission and how it influences goal setting and planning.
Describe the goals an organization should have and why they resemble a hierarchy.
Define the characteristics of effective goals.
Describe the four essential steps in the MBO process.
Explain the difference between single-use plans and standing plans.
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4. Learning Objectives (Cont’d)
Learning Objectives (Cont’d)
Discuss how planning in a turbulent environment differs from traditional approaches to planning.
Describe and explain the importance of the three stages of crisis management planning.
Define the components of strategic management.
Explain the major considerations in formulating functional strategies.
Describe the strategic planning process and SWOT analysis.
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5. Learning Objectives (cont’d)
Learning Objectives (cont’d)
Describe business-level strategies, including Michael E. Porter’s competitive forces and strategies and partnership strategies.
Discuss the organizational dimensions used for implementing strategy.
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6. Overview of Goals and Plans
Overview of Goals and Plans
Goal
A desired future state that the organization attempts to realize.
Plan
A blueprint specifying the resource allocation, schedules, and other actions necessary for attaining goals.
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7. Ex. 5.1 Levels of Goals/Plans and Their Importance
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8. Purposes of Goals and Plans
Purposes of Goals and Plans
Legitimacy/mission statement.
Source of motivation and commitment.
Resource allocation.
Guides to action.
Rationale for decisions.
Standard of performance.
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9. Goals in Organizations
Mission:
The organization’s reason for existence.
Mission Statement:
A broadly stated definition of the organization’s basic business scope and operations that distinguishes it from similar types of organizations.
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10. Goals and Plans: Strategic
Goals and Plans: Strategic
Strategic Goals
Broad statements of where the organization wants to be in the future, pertaining to the organization as a whole rather than to specific divisions or departments.
Strategic Plans
The action steps by which an organization intends to attain strategic goals.
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11. Goals and Plans: Tactical
Goals and Plans: Tactical
Tactical Goals
Goals that define the outcomes that major divisions and departments must achieve for the organization to reach its overall goals.
Tactical Plans
Plans designed to help execute major strategic plans and to accomplish a specific part of the company’s strategy.
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12. Goals and Plans: Operational
Goals and Plans: Operational
Operational Goals
Specific, 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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13. Ex. 5.3 Characteristics of Effective Goal Setting
Ex 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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14. Ex. 5.4 Model of the MBO Process
Step 1: Setting Goals
Step 2: Developing Action Plans
Corporate Strategic Goals
Departmental Goals
Individual Goals
Action Plans
Review Progress
Step 3:
Reviewing Progress
Take Corrective Action
Appraise Performance
Step 4: Appraising Overall Performance
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15. Ex. 5.5 MBO Benefits and Problems
Ex MBO Benefits and Problems
Benefits:
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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16. Ex. 5.5 MBO Benefits and Problems (Cont’d)
Ex MBO Benefits and Problems (Cont’d)
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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17. Copyright © 2009 Nelson Education Ltd.
Types of Plans
Single-Use
Standing
Contingency
Crisis Management
Three 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.
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19. Ex. 5.9 The Strategic Management Process

20. Porter’s Competitive Forces
Porter’s Competitive Forces
Potential new entrants
Bargaining power of buyers
Bargaining power of suppliers
Threat of substitute products
Rivalry among competitors
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21. Ex. 5.11 The Five Forces Affecting Industry Competition

22. Competitive Strategies
Competitive Strategies
Differentiation
Cost Leadership
Focus
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23. Ex. 5.14 Tools for Putting Strategy into Action
Ex Tools for Putting Strategy into Action
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