Managerial Planning and Goal Setting D:Chapter 7 Managerial Planning and Goal Setting

Chapter Outline Introduction Goals, plans, planning

Goals and Plans A Plan is the means devised to reach a goal. A goal is a desired future target or end result. A Plan is the means devised to reach a goal. Planning is the act of determining the goals and plans. 2

The Benefits of Goals and Plans Legitimacy to external audiences A source of motivation and commitment Guides to action Rationale for decisions Standard of performance and control 4

Chapter Outline Introduction Goals, plans, planning Planning hierarchy

Organizational Mission Reason for existence, the basic purpose Focus on items such as: Market and customers Desired types of activities Values, aspirations, and reason for being Product quality Location of facilities Attitude toward employees. 7

LEVELS OF GOALS Operational Goals Plans Tactical Strategic TM 6-3 LEVELS OF GOALS Operational Goals Plans Tactical Strategic Top Management Organizationwide perspective Middle Management Department perspective First Level Management Unit/Individual perspective Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 1998 3 3 3

Levels of Goals and Plans Strategic goals—broad statements describing where the organization wants to be in the future. Tactical goals—specific results for major divisions and departments. Operational goals—specific results expected from work groups, and individuals. 8

MEANS -- ENDS CHAIN Strategic Goals Tactical Operational TM 6-4 MEANS -- ENDS CHAIN Strategic Goals Tactical Operational Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 1998 4 4 4

Chapter Outline Introduction Planning hierarchy Planning time horizon Goals, plans, planning Planning hierarchy Planning time horizon

Planning Horizon Long term planning Intermediate-term planning Includes strategic goals and plans Up to five years Intermediate-term planning Includes tactical objectives One to two years Short-term planning Includes operational objectives for departments and individuals One year or less 22

Peter Drucker’s Eight Areas of Focus 1. Market standing relative to competitors 2. Innovation of new methods or products 3. Productivity or efficiency 4. Resources, both physical and financial 5. Profitability 6. Managerial performance and development 7. Worker performance and attitude 8. Public responsibility to customers and society. 9

Chapter Outline Introduction Planning hierarchy Planning time horizon Goals, plans, planning Planning hierarchy Planning time horizon Criteria for effective goals

Criteria for Effective Goals Be specific and measurable (When possible, goals should be expressed in quantitative terms) Cover key result areas Be challenging but realistic Be for a defined time period Be linked to rewards 12

Chapter Outline Introduction Planning hierarchy Planning time horizon Goals, plans, planning Planning hierarchy Planning time horizon Criteria for effective goals Planning types

PLANS ACCORDING TO USE PROGRAM PROJECT POLICIES PROCEDURES RULES TM 6-6 PLANS ACCORDING TO USE PROGRAM Single-Use Plans Aim at achieving a specific, non-recurring goal PROJECT POLICIES PROCEDURES RULES Standing Plans Providing ongoing guidance for recurring activities Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 1998 6 6 6

Single-Use Plans—For Goals Not Likely To Be Repeated A program is a complex set of objectives and plans to achieve an important, one-time organizational goal A project is similar to a program, but generally smaller in scope and complexity 17

Standing Plans A policy is a general guide to action and provides direction for people within the organization Procedures define a precise series of steps to be used in achieving a specific job Rules describe how a specific action is to be performed 18

Chapter Outline Introduction Planning hierarchy Planning time horizon Goals, plans, planning Planning hierarchy Planning time horizon Criteria for effective goals Planning types Planning in a turbulent environment Planning for high performance