1. Copyright © Houghton Mifflin Company. All rights reserved.7–1 Elements of Planning

2. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.7–2 Organizational Goals Guidance and unified direction Promotion of good planning Source of motivation Evaluation and control Purposes of Goals

3. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.7–3 Kinds of Goals By Level Mission statement Strategic goals Tactical goals Operational goals By Area Operations Marketing Finance Production Time Frame Long-term goals Intermediate goals Short-term goals Explicit goals Open-ended goals Setting Organizational Goals

4. 7–4 Kinds of Organizational Goals for a Regional Fast- Food Chain

5. Creating S.M.A.R.T. Goals S pecific – Be clear about what you want to accomplish. M easurable – Put in quantifiable terms to track your progress. A ttainable – Make it challenging, but attainable. R ealistic – Be willing and able to work toward. T imely – Include a time frame, have due dates for milestones. Copyright © Houghton Mifflin Company. All rights reserved.7–5

6. Strategic Plans (Top Management) –Broadest set of plans – primary objectives –Mission statement Tactical Plans (Middle Management) –Smaller scale – used to implement a strategy –Typically 1-3 year period Operational Plans (Supervisory Management) –Designed to implement tactical plans –Typically 1 year or less –Deals with the “how” in accomplishing specific objectives Contingency Plans (Any management level) –Alternative courses of action Kinds of Organizational Plans

7. 7–7 The Time Dimension of Planning –Planning must provide sufficient time to fulfill the managerial commitments involved. Long-range (strategic) plans of 5 or more years Short-range (operational) action and contingency plans of 1 year or less Intermediate-range (tactical) plans of 1–5 years 1510

8. 7–8 Plan TypeDescription Single-use plans Developed to carry out a course of action not likely to be repeated in the future ProgramSingle-use plan for a large set of activities ProjectSingle-use plan of less scope and complexity than a program Standing plans Developed for activities that recur regularly over a period of time PolicyStanding plan specifying the organization’s general response to a designated problem or situation Standard operating procedure Standing plan outlining steps to be followed in particular circumstances Rules and regulationsStanding plans describing exactly how specific activities are to be carried out

9. Copyright © Houghton Mifflin Company. All rights reserved.7–9 Rule: (no exceptions) No returns over $50 without a managers signature Policy: (manager has some discretion) Accept customer returns Procedure: Outline steps to be followed in particular circumstances (SOPs- Standard Operating Procedures) Example of Policy, Rule, and Procedure

10. Copyright © Houghton Mifflin Company. All rights reserved.7–10 Major barriersInappropriate goals Improper reward system Dynamic and complex environment Reluctance to establish goals Resistance to change Constraints Overcoming the barriers Understanding the purposes of goals and planning Communication and participation Consistency, revision, and updating Effective reward system Barriers to Goal Setting and Planning

11. Copyright © Houghton Mifflin Company. All rights reserved.7–11 The Formal Goal-setting Process Management By Objectives (MBO) Goals are collaboratively set between managers and subordinates Evaluation and reward based on subordinate’s performance