1. Planning and Goal Setting
Chapter 5
Planning and Goal Setting
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2. Read “Benchmarking” p. 159 Is Nintendo successful?
How has Nintendo used innovative ideas to create new products?
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3. 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.
Planning is considered the most fundamental management function – and the most controversial. Why?
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4. Are you an Effective Planner?
Give an example of a personal goal.
Do you use a calendar/ scheduler/ appt. book?
Do you set priorities? Give an example.
Do you set deadlines? Give an example.
Are most your days hectic & disorderly?
Do you believe you are a good planner?
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5. Ex. 5.1 Levels of Goals/Plans and Their Importance
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6. Mission Statement What is a mission statement?
* What the organization stands for
* Describes values and aspirations
* Focuses on customers, values, product quality, and attitude toward employees.
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7. Ben & Jerry’s Mission
To make, distribute, & sell the finest quality all natural ice cream & euphoric concoctions with continued commitment to incorporating wholesome, natural ingredients and promoting business practices that respect the Earth and the Environment.
What does this statement really tell you about the company?
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8. Purposes of Goals and Plans
Purposes of Goals and Plans
Legitimacy/mission statement
Source of motivation and commitment
Rationale for decisions
Guides to action
Resource allocation
Standard of performance
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9. Goals and Plans Strategic Goals
Goals and Plans
Strategic Goals
Where the organization wants to be in the future.
Pertain to the organization as a whole.
Strategic Plans
Action Steps.
Blueprint that defines the organizational activities and resource allocations.
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10. Tactical Goals and Plans
Tactical Goals and Plans
Tactical Goals
Goals that define the outcomes that major divisions and departments must achieve.
Tactical Plans
Plans designed to help execute major strategic plans.
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11. Operational Goals and Plans
Operational Goals and Plans
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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12. Ex. 5.4 Characteristics of Effective Goal Setting
Ex. 5.4 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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13. Planning Types Management by Objectives (MBO) Single Use Plans
Standing Plans
Contingency Plans
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14. Ex. 5.5 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. 5.6 MBO Benefits and Problems Benefits
Ex. 5.6 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. 5.6 MBO Benefits and Problems (contd.) Problems
Ex. 5.6 MBO Benefits and Problems (contd.) 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. Plans – see Exhibit 5.7, page 165
Plans – see Exhibit 5.7, page 165
Single-Use
Standing
Contingency
Crisis Management
Three Stages
Prevention
Preparation
Containment
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18. 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. Strategic Management Questions
What changes and trends are occurring?
Who are our customers? What do they want?
What products/services should we offer?
How can we offer these products/services efficiently?
Did Nintendo do a good job with Strategic Management?
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20. Strategic Management What does “competitive” mean?
What is a “competitive advantage”?
What is a “core competency”?
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21. Ex. 5.10 The Strategic Management Process
Identify Strategic Factors
Strengths
Weaknesses
Scan Internal Environment
Core Competence
Synergy
Value Creation
Identify
Strategic:
Corporate
Business
Functional
Define New:
Mission
Goals
Grand Strategy
Evaluate Current:
Strategies
Scan External Environment
National
Global
Opportunities
Threats
SWOT
Implementing Strategy via Changes in:
Structure
Human resources
Information & control systems
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22. Southwest Airlines – SWOT
SWA is a low cost, short haul, point-to-point air carrier.
Primary Goal: LOW cost/customer service
Internal Strengths_____________
Internal Weaknesses ______________
External Opportunities _____________
External Threats _____________
Resulting Strategies:
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23. Kraft Foods - SWOT Read “Kraft Foods”, p. 177
List one Kraft strength: _____________
List one Kraft weakness: ____________
List one Kraft opportunity: _____________
List one Kraft threat: _______________
List one Kraft Strategy resulting from these events: _____________________________
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24. Formulating Strategies
How do we decide what strategies work best?
Create strategies based on assessment of the competitive forces that effect the business.
Porter’s 5 Forces Model (See exhibit 5.12, pg. 178)
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25. Porter’s Competitive Forces
Porter’s Competitive Forces
Threat of substitute products
Potential new entrants
Rivalry among competitors
Bargaining power of buyers
Beware
Bargaining power of suppliers
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26. Ex. 5.12 The Five Forces Affecting Industry Competition
Ex The Five Forces Affecting Industry Competition
SOURCES: Based on Michael E. Porter, Competitive Strategy: Techniques for Analyzing Industries and Competitors (New York: Free Press, 1980); and Michael E. Porter, “Strategy and the Internet,” Harvard Business Review (March, 2001),
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27. Competitive Strategies (see exhibit 5.14, p. 180)
Competitive Strategies (see exhibit 5.14, p. 180)
1. Differentiation: how will you make your product different from the competition? Ex. Auto industry.
2. Cost Leadership: how will you aggressively cut costs and produce more efficiently? Ex. Walmart
3. Focus: how can you concentrate on a specific market or group, adopting a Niche Strategy? Ex. SAS
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28. Ex. 5.15 Tools for Putting Strategy into Action
Ex Tools for Putting Strategy into Action
SOURCE: Adapted from Jay R. Galbraith and Robert K. Kazanjian, Strategy Implementation: Structure, Systems, and Process, 2d ed. (St. Paul, Minn.: West, 1986), 115. Used with permission.
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29. Conclusion Why do we need goals? What do we need in addition to goals?
What is strategic management?
What is SWOT analysis?
What are the 3 competitive strategies?
How do companies “Win” in the marketplace?
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