MANAGEMENT RICHARD L. DAFT

Managerial Planning and Goal Setting Managerial Planning and Goal Setting CHAPTER 6

Learning Outcomes 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 types of goals an organization should have and how managers use strategy maps to align goals. Define the characteristics of effective goals. Describe the four essential steps in the management by objectives (MBO) process. Explain the difference between single-use plans and standing plans. Describe and explain the importance of contingency planning, scenario building, and crisis planning in today’s environment. Summarize the guidelines for high-performance planning in a fast-changing environment. Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

Does Goal Setting Fit Your Management Style? Managers must plan where the organization should go in the future Managers must plan for unexpected events The company establishes a basic mission and develops goals and objectives Plans should meet environmental changes and expectations of stakeholders Planning is fundamental to all organizations Everything stems from planning Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

Overview of Goals and Plans A goal is a desired future state that the organization attempts to realize A plan is a blueprint for goal achievement There are different levels of planning and goals in an organization Goals at each level of the organization guide the organization Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

Levels of Goals/Plans and their Importance Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

Characteristics of Goals and Plans Legitimacy Source of motivation and commitment Resource allocation Guides to action Rationale for decisions Standards of performance Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

The Organizational Planning Process Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

Organizational Mission The mission statement is the reason the organization exists Top of the goal hierarchy Describes the values, aspirations and reason for being A well-defined mission is the basis for all other goals Mission statements outline the stated purpose and values to stakeholders Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

Types of Goals and Plans Strategic Goals – official goals, broad statements about the organization Define the action steps the company intends to attain The blueprint that defines activities Tactical Goals – help execute major strategic plans Specific part of the company’s strategy Plans of the divisions and departments Operational Goals – results expected from departments, work groups, and individuals Lower levels of the organization Specific action steps Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

Aligning Goals with Strategy Maps Goals should be consistent and mutually supportive The achievement of goals at low levels permits the attainment of high-level goals Individuals, teams, and departments should be working in concert Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

Strategy Map for Aligning Goals Goals should be consistent and mutually supportive Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

Operational Planning Operational goals should direct employees and resources toward outcomes It is important to establish effective goals Management by objective Single-use plans Standing plans Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

Characteristics of Effective Goal Setting Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

Management by Objective Defined by management scholar Peter Drucker in his 1954 book, The Practice of Management Process of defining goals and monitoring progress Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

Model of the MBO Process Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

MBO Benefits and Problems Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

Single-Use and Standing Plans Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

Planning for a Turbulent Environment Contingency Planning – plans for emergencies, setbacks or unexpected conditions Building Scenarios – visualizing future possibilities Crisis Planning – preparing to cope with unexpected events Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

Essential Stages of Crisis Planning Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

Planning for High Performance Traditional Approach: Done by top executives (top down) Central planning departments Planning specialist High-Performance Approach: Decentralized planning Managers plan throughout the organization Now involves line-managers and employees Dynamic plans for fast-changing needs Stretch Goals and Big Hairy Audacious Goals (BHAG) are big and inspiring Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

Performance Dashboard for Planning Gauge progress toward goals Align and track goals All employees can track progress Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.