1. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–1 CHAPTER 6 ESTABLISHING ORGANISATIONAL GOALS & PLANS, THEN DEVELOPING STRATEGY

2. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–2 LECTURE OUTLINE The planning process The nature of organisational goals How goals facilitate performance Linking goals & plans Management by objectives

3. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–3 LECTURE OUTLINE The concept of strategic management The role of competitive analysis in strategy formulation Formulating functional level strategy Strategy implementation

4. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–4 THE PLANNING PROCESS Mission The organisation’s purpose or fundamental reason for existence Goal Future target or end result an organisation wishes to achieve Plan Means devised for attempting to reach a goal

5. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–5 THE PLANNING PROCESS missiongoalsplans Goal attainment (organisational efficiency & effectiveness)

6. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–6 THE PLANNING PROCESS ‘Setting goals & developing plans leads to goal attainment and ultimately, to organisational efficiency & effectiveness.’

7. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–7 ORGANISATIONAL MISSION ‘Essentially, planning builds on the organisation’s mission, the organisation’s purpose or fundamental reason for existence.’

8. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–8 ORGANISATIONAL MISSION Mission statement may: be unwritten address customers, products/services, location, technology, concern for survival, philosophy, self-concept, concern for public image, concern for employees (David 1989)

9. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–9 NATURE OF ORGANISATIONAL GOALS Benefits of goals – Increase performance – Clarify expectations – Facilitate control – Increase motivation Levels of goals – Operational goals (base) – Tactical goals (mid) – Strategic goals (top)

10. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–10 LEVELS OF GOALS Top managers Organisational perspective Middle managers Departmental perspective 1st level managers Unit/individual perspective strategic goals strategic plans tactical goals tactical plans operational goals operational plans

11. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–11 GOALS AND PERFORMANCE Key aspects: Goal content Goal commitment Work behaviour Other process components Possible problems

12. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–12 GOALS AND PERFORMANCE GOAL CONTENT Should be: Challenging Attainable Specific & measurable Time-limited Relevant

13. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–13 GOALS AND PERFORMANCE GOAL COMMITTMENT Influenced by: Supervisory authority Peer & group pressure Public display Expectations of success Incentives & rewards Participation

14. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–14 GOALS AND PERFORMANCE WORK BEHAVIOUR Goals & commitment affect work behaviour: Direction Effort Persistence Planning

15. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–15 GOALS AND PERFORMANCE Job process components affect performance: Job knowledge & ability Task complexity Situational constraints

16. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–16 GOALS AND PERFORMANCE POTENTIAL PROBLEMS WITH GOALS Excessive risk-taking Increased stress Undermined self-confidence Ignored non-goal areas Excessive short-run thinking Dishonesty & cheating

17. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–17 LINKING GOALS & PLANS Levels of plans Extent of recurring use Time horizons of goals & plans Promoting innovation

18. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–18 LINKING GOALS & PLANS Levels of plans: Strategic Operational Tactical Recurring use: Single-use Standing plans: policies, procedures, rules

19. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–19 LINKING GOALS & PLANS Time horizons of goals/plans: Short Intermediate Long range Promoting innovation by : Mission statement Goal content & process Planning content & process

20. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–20 OBSTACLES TO PLANNING Domination by specialists Low levels of manager skill & knowledge Pressure of day-to-day work Manager hostility Environmental change

21. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–21 OBSTACLES TO PLANNING REDUCING PLANNING OBSTACLES Use of planning staff Small group who assist managers in planning Use contingency planning Development of alternative plans

22. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–22 MANAGEMENT BY OBJECTIVES Process through which specific goals are set collaboratively for the organisation as a whole and every unit within it; the goals are then used as a basis for planning, managing organisational activities, and assessing and rewarding contributions.

23. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–23 MANAGEMENT BY OBJECTIVES Steps in the MBO process: Develop organisational goals Establish specific goals for departments Formulate action plans Implement & maintain ‘self-control’ Review progress periodically Appraise performance

24. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–24 MANAGEMENT BY OBJECTIVES Strengths: Helps link goals & plans Clarifies priorities, expectations Fosters organisational communication Builds member motivation Weaknesses: Needs strong, enduring commitment Requires training of managers May be misused (i.e. for punishment) Risk of dominance of quantitative goals

25. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–25 MANAGEMENT BY OBJECTIVES Assessing MBO: Can heighten organisational performance Short-term focus of US, Australian & NZ organisations limits application 20–25% success rate

26. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–26 THE CONCEPT OF STRATEGIC MANAGEMENT ‘Process through which managers formulate and implement strategies geared to optimising strategic goal achievement, given available environmental and internal conditions.’ THE STRATEGIC MANAGEMENT PROCESS IMPORTANCE OF STRATEGIC MANAGEMENT LEVELS OF STRATEGY

27. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–27 THE CONCEPT OF STRATEGIC MANAGEMENT THE STRATEGIC MANAGEMENT PROCESS Strategy formulation Strategy implementation IMPORTANCE OF STRATEGIC MANAGEMENT Competitive advantage LEVELS OF STRATEGY Corporate level Business level Functional level Coordinating strategy levels

28. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–28 THE ROLE OF COMPETITIVE ANALYSIS IN STRATEGY FORMULATION SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) relies upon: ENVIRONMENTAL ASSESSMENT – Porter’s five competitive forces model ORGANISATIONAL ASSESSMENT – Organisational resources & capabilities – Distinctive competencies

29. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–29 FORMULATING FUNCTIONAL LEVEL STRATEGY Functional level strategies spell out how functional areas can bolster business-level strategy e.g. an R&D department might accelerate innovation to provide new products before competitors

30. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–30 STRATEGY IMPLEMENTATION Carrying out strategic plans Technology Human Resources Reward systems Decision processes Structure Maintaining strategic control Monitoring environment Assessing effects of actions Monitoring results

31. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–31 LECTURE SUMMARY The planning process – Major components – Organisational mission statement The nature of organisational goals – Benefits of goals – Levels of goals – Goals & performance – Work behaviour – Other work processes – Possible problems with goals

32. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–32 LECTURE SUMMARY How goals facilitate performance – Direction, effort, persistence & planning Linking goals & plans – Levels, recurrent use, time spans, promoting innovation – Possible obstacles to planning MBO (Management by objectives) – The key steps in MBO process – Strengths & weaknesses

33. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–33 LECTURE SUMMARY Concept of strategic management – The strategic management process – Importance of strategic management – Levels of strategy Role of competitive analysis in strategy formulation – SWOT analysis

34. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–34 LECTURE SUMMARY Formulating functional level strategy Strategy implementation – Carrying out strategic plans – Maintaining strategic control