Establishing Goals Developing Plans

Overview Approaches to establishing goals Developing plans Contemporary issues in planning Chapter 4 Lesson 2

Quick Write If you are working in a group, is it important to you to have a say in setting its goals? Why or why not? Chapter 4 Lesson 2 Courtesy of Goodshoot Images

Approaches to Establishing Goals Chapter 4 Lesson 2 Courtesy of Clipart.com

The Purpose of Goals Provide direction for management decisions Form the criteria–—the yardsticks–—against which to measure performance Direct the action of workers and managers within an organization Chapter 4 Lesson 2 Courtesy of Comstock Images

Traditional Goal Setting Traditional goal setting is an approach in which goals are set at the top level of the organization and then broken into subgoals for each level of the organization Chapter 4 Lesson 2

Problems with Traditional Goal Setting Management may not see clearly what goals need to be Process of passing goals down the corporate ladder may not work Management may define goals too broadly Workers may misinterpret management goals Chapter 4 Lesson 2

Downside of Traditional Goal Setting “We need to improve the company’s performance.” “I want to see a significant improvement in this divisions’ profits.” “Increase profits regardless of the means.” “Don’t worry about quality; just work fast.” Chapter 4 Lesson 2 Adapted from Management, 9th Ed. By Robbins/Coulter p. 192 Pearson Prentice Hall, 2007

A Means-End Chain A means-end chain is an integrated network of goals The accomplishment of goals at one level serves as the means for achieving the goals, or ends, at the next Chapter 4 Lesson 2

Management by Objective Management by Objective (MBO) approach toward setting goals occurs when managers and workers meet together to establish objectives Chapter 4 Lesson 2 Courtesy of Clipart.com

Problems with MBO Goal Setting If goals must be reset every few weeks, no one will have time to measure progress made on the original goals Can lead to overemphasis on individual goals without regard to others in the work group Can turn into an annual exercise in paper shuffling that doesn’t really motivate anyone Chapter 4 Lesson 2 Courtesy of Clipart.com

Steps for MBO Goal Setting Formulate overall objectives and strategies Assign major objectives to top managers, divisional and departmental units Unit managers work with the supervisors below them to set their specific objectives Supervisors work with rank-and-file employees to set their specific objectives Chapter 4 Lesson 2 Courtesy of Clipart.com

Steps for MBO Goal Setting Managers and employees write and agree to action plans that define how to meet the goals Plans are carried out Managers up and down the corporate ladder review progress toward objectives and give feedback as needed Those who have helped achieve the goal share in some form of reward Chapter 4 Lesson 2 Courtesy of Clipart.com

Characteristics of Well-Thought-Out Goals Stated as outcomes (the desired results) rather than inputs (actions or efforts) Measurable and quantifiable Have a clear time frame Challenging but reachable – a stretch, but not an impossible one Written down Shared with everyone who needs to know about them Chapter 4 Lesson 2

Steps in Goal Setting Review the organization’s mission Evaluate your resources Determine your goals on your own and with input from others, as needed Write down the goals and communicate them to all who need to know them Review progress Chapter 4 Lesson 2

Optional Exercise Work together in teams of three to five to set three well-thought-out goals for community service for our JROTC Unit following the five steps of goal setting. Prepare to describe one of your goals for community service with the class and have your described goals evaluated based on the six characteristics of a well-thought-out goal. Chapter 4 Lesson 2

Developing Plans Chapter 4 Lesson 2 Courtesy of Goodshoot Images

Three Contingency Factors Level within the organization for the plan Degree of uncertainty in the environment Length of future commitments Chapter 4 Lesson 2

The Commitment Concept The commitment concept – the idea that plans should extend far enough ahead to meet those commitments made today Chapter 4 Lesson 2 Courtesy of Goodshoot Images

Formal Planning Departments Some organizations have a formal planning department – a group of specialists whose sole responsibility is helping to write organizational plans Chapter 4 Lesson 2

Traditional Planning Traditional planning, like traditional goal setting, involves handing things down from level to level within the organization Chapter 4 Lesson 2

Problems of Traditional Planning Often results in a lot of heavy ring binders sitting on shelves The “plan” in such circumstances never really guides anyone’s work Survey of managers at companies with top-down organizational planning found that 75 percent of them called their system unsatisfactory “Plans are documents that you prepare for the corporate planning staff and later forget,” is the way one manager put it Chapter 4 Lesson 2

One Common View of Traditional Planning “Plans are documents that you prepare for the corporate planning staff and later forget” Chapter 4 Lesson 2 Courtesy of Brand X Images

Benefits of a Modern Approach Involves everyone in the planning Becomes clear that plans are more than just something put down on paper Employees see managers use plans in directing and coordinating work Chapter 4 Lesson 2

Contemporary Issues in Planning Chapter 4 Lesson 2 Courtesy of Liquidlibrary Images

Two Contemporary Issues Is formal organizational planning really a good idea? How can managers possibly plan effectively in today’s often chaotic business environment? Chapter 4 Lesson 2

Contemporary Criticisms of Planning Planning is not relevant in today’s fast-changing environment Formal planning stifles creativity Planning is not enough – necessary to move from planning to doing Chapter 4 Lesson 2

Effective Planning in Dynamic Environments Wireless networking technology transforming industries Companies harnessing the power of the Internet in new ways Consumers keep eating out more and more Many countries of the European Union have adopted a new common currency, the Euro Experts believe that China and India will transform the global economy of the 21st century Chapter 4 Lesson 2

Planning in Dynamic Environments Plans need to be “specific but flexible” Managers have to learn to keep planning year after year – persistent planning allows managers to learn and improve Organizational hierarchies need to be flattened with fewer layers – managers must train their employees to set goals and make plans Chapter 4 Lesson 2

Optional Exercise Work together in teams of three to five to make plans for implementing one of the goals we have set for community service for our JROTC Unit. Prepare to describe one of your plans for implementing a community service goal and have other teams evaluate your described plan based on their consideration of three contingency factors and three characteristics of effective planning in dynamic environments. Chapter 4 Lesson 2

Steps to Becoming a Manager Practice setting goals in areas of your life such as your academic work, career preparation, and family life Write out plans for achieving those goals Be prepared to change your goals as circumstances change Write a personal mission statement If you have a job, talk to your managers about the planning they do and ask their advice on being a better planner Chapter 4 Lesson 2 Courtesy of Clipart.com

Review Goals provide direction for management decisions day by day and establish criteria for measuring performance Traditional goal setting is an approach in which goals are set at the top level of the organization and then broken into subgoals for each level of the organization Chapter 4 Lesson 2

Review The traditional goal setting approach assumes that top management sees clearly what the goals need to be and that the process of passing goals down the corporate ladder works, and works smoothly – but often these are not valid assumptions A means-end chain is an integrated network of goals in which the accomplishment of goals at one level serves as the means for achieving the goals, or ends, at the next Chapter 4 Lesson 2

Review Management by objective (MBO) is another approach toward setting goals in which managers and workers meet together to establish objectives Well-thought-out goals are stated as outcomes, are measurable, have a clear time frame, are challenging, but reachable, are written down, and are shared with everyone who needs to know about them Chapter 4 Lesson 2

Review The five steps of goal setting include (1) reviewing the organization’s mission, (2) evaluating resources, (3) determining your goals on your own and with input from others, as needed, (4) writing down the goals and communicating them to all who need to know them, and (5) reviewing progress Chapter 4 Lesson 2

Review Managers have to consider three contingency factors in planning – the level within the organization that they’re planning for, the degree of uncertainty in the environment, and the length of future commitments Chapter 4 Lesson 2

Review Traditional planning involves handing things down from level to level within the organization and often involves a formal planning department – a group of specialists whose sole responsibility is helping to write organizational plans Chapter 4 Lesson 2

Review A more modern approach is to involve everyone in the planning Effective planning in dynamic (rapidly changing) environments is one of the major contemporary issues of planning Effective plans in dynamic environments need to be specific, but flexible, evaluated and updated persistently, and developed as both managers and employees work together to set goals and make plans Chapter 4 Lesson 2

Review Learning to manage yourself involves setting personal goals, writing out plans to achieve those goals, and changing your goals as circumstances change Chapter 4 Lesson 2

Summary Approaches to establishing goals Developing plans Contemporary issues in planning Chapter 4 Lesson 2

What’s Next… Decision-Making Chapter 4 Lesson 2 Courtesy of Clipart.com