Managerial Planning and Goal Setting Chapter 7 Managerial Planning and Goal Setting

Planning is Fundamental All of the other management functions stem from planning How do you plan for an undefined future? No plan is perfect Without plans and goals, organizations flounder

Goals and Plans A goal is a desired future state that the organization attempts to realize PLANNING A plan is a blueprint for goal achievement and specifies the necessary resource allocations, schedules, tasks, and other actions

7.1 Levels of Goals and Plans

7.2 The Organizational Planning Process

Goal-Setting in Organizations Organizational mission – the organization’s reason for existence Strategic goals – official goals, broad statements describing the organization’s future Strategic plans – define the action steps the company will take Goals should be aligned using a strategy map

7.4 A Strategy Map for Aligning Goals

Operational Planning Direct employees and resources Guide toward efficient and effective performance Includes planning approaches: Management-by-Objectives (MBO) Single-Use Plans Standing Plans

7.5 Characteristics of Effective Goal Setting

7.6 Model of the MBO Process Defined in 1954 by Peter Drucker Method for defining goals and monitoring performance

7.7 MBO Benefits

Single-Use and Standing Plans Single-Use Plans Achieve one-time goals Programs and projects Standing Plans Ongoing plans Policies, rules, procedures

Types of Single-Use and Standing Plans Single-Use Plans Program: building new headquarters, converting paper files to digital Project: renovating the office, setting up a new company intranet

Types of Single-Use and Standing Plans Policy: Sexual harassment policies, Internet and social media policies Rule: No eating rule in areas of company where employees are visible to public Procedure: Procedures for issuing refunds, Procedures for handling employee grievances

7.8 Major Types of Single Use and Standing Plans

Benefits and Limitations of Planning Goals and plans provide a source of motivation and commitment Goals and plans guide resource allocation Goals and plans are a guide to action Goals and plans set a standard of performance Goals and plans can create a false sense of certainty Goals and plans may cause rigidity in a turbulent environment Goals and plans can get in the way of intuition and creativity

Planning for a Turbulent Environment Contingency Planning Planning for emergencies, setbacks, or unexpected conditions Building Scenarios A forecasting technique to look at current trends and discontinuities and visualize future possibilities Crisis Planning Unexpected events that are sudden and devastating

7.9 Essential Stages of Crisis Planning

Set Stretch Goals for Excellence Stretch goals are highly ambitious Clear, compelling, and imaginative Require innovation Goals must be seen as achievable Like Big Hairy Audacious Goal (BHAG) from 1996 article on “Building Your Company’s Vision” As times move faster and become more turbulent, these are important

Use Performance Dashboards keep track of key performance metrics align and track goals can be applied throughout the company on the factory or sales floor.

7-10 A Performance Dashboard for Planning

Deploy Intelligence Teams cross-functional group of managers work together gain a deep understanding of a specific competitive issue offer insight and recommendations for planning