1. Chapter 5 Organisational goals, plans and strategies
© 2006 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management Foundations: A Pacific Rim Focus by Bartol et al.

2. Lecture outline The overall planning process
The nature of organisational goals
How goals facilitate performance
Linking goals and plans
Management by objectives
Page 140
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3. Lecture outline The concept of strategic management
The role of competitive analysis in strategy formulation
Formulating functional-level strategy
Strategy implementation
Page 140
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4. The overall 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
It is important to an organisation’s success to have a good idea of its overall mission, as well as more specific, written goals and carefully developed plans.
Further discussion can be found on page 143.
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5. The overall planning process
Goal attainment
(organisational efficiency
& effectiveness)
mission
goals
plans
Page 143
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6. The overall planning process
‘Setting goals and developing plans leads to goal attainment and, ultimately, to organisational efficiency and effectiveness.’
Without planning, organisations are driven by the winds of environmental change, unable to use the currents to choose their own direction. Thus the management function of planning, setting goals and deciding how best to achieve them is crucial to organisational survival.
Further discussion can be found on page 143.
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7. Organisational mission
‘Essentially, planning builds on the organisation’s mission, the organisation’s purpose or fundamental reason for existence.’
A mission statement is a broad statement distinguishing the organisation from others of its type by its unique purpose and scope of operations.
Further discussion can be found on page 143.
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8. Organisational mission
A 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).
For managers, the mission statement is a benchmark to evaluate success. For employees, a mission statement defines common purpose, nurtures organisational loyalty, and fosters a sense of community.
Further discussion can be found on pages
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9. The 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)
Organisational goals are a major element in the overall planning process and differ by organisational level—operational, managerial and executive.
Further discussion can be found on pages
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10. Levels of goals Top managers Middle managers 1st level 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 ↔
Pages 145-7
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11. How goals facilitate performance
Key aspects:
Goal content
Goal commitment
Work behaviour
Other process components
Potential problems with goals
To use goals effectively, managers must understand how performance can be facilitated by goals (see Figure 5.4 on page 148).
Further discussion can be found on page
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12. How goals facilitate performance
Goal content
Should be:
Challenging
Attainable
Specific and measurable
Time-limited
Relevant
In channelling effort to achievement at strategic, tactical and operational levels, effective goals have the five major attributes shown in this slide.
Further discussion can be found on pages
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13. How goals facilitate performance
Goal commitment
Influenced by:
Supervisory authority
Peer and group pressure
Public display
Expectations of success
Incentives and rewards
Participation
A critical element in effective use of goals is getting individuals and/or work groups to be committed to the goals they must carry out. Goal commitment is one’s attachment to, or determination to reach, a goal.
Further discussion can be found on pages 149 and 151.
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14. How goals facilitate performance
Work behaviour
Goals and commitment affect work behaviour via:
Direction
Effort
Persistence
Planning.
Page 151
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15. How goals facilitate performance
Other process components
Job process components affect performance
through:
Job knowledge and ability
Task complexity
Situational constraints.
Pages 151-2
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16. How goals facilitate performance
Potential problems with goals:
Excessive risk-taking
Increased stress
Undermined self-confidence
Ignored non-goal areas
Excessive short-run thinking
Dishonesty and cheating
Although goal use in organisations can yield many positive results, pitfalls exist. These problems and their solutions are summarised in Figure 5.3 (on page 152).
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17. Linking goals and plans
Levels of plans
Plans according to extent of recurring use
Time horizons of goals and plans
Promoting innovation
Potential obstacles to planning
Goals and plans are closely related. An organisation may set strategic, tactical and operating goals that are meaningless unless the actual process is considered. While goals are desired ends, plans are the means to achieve them.
Further discussion can be found on pages
© 2006 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management Foundations: A Pacific Rim Focus 1e by Bartol et al.

18. Linking goals and plans
Levels of plans:
Strategic
Tactical
Operational
Plans according to extent of recurring
use:
Single-use
Standing plans: policies, procedures, rules
Pages 152-5
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19. Linking goals and plans
Time horizons of goals and plans:
Short
Intermediate
Long range
Promoting innovation using:
Mission statement
Goal content and process
Planning content and process
Pages 155 and 157
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20. Potential obstacles to planning
Environmental change
Manager hostility
Pressure of day-to-day work
Low levels of manager skill and knowledge
The ability to develop effective plans has several potential obstacles. These may originate in either (or both) the external and internal environment of the organisation.
Further discussion can be found on page 157.
Domination by specialists
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21. Reducing planning obstacles
Use of planning staff
Small group that assists managers in planning
Use contingency planning
Development of alternative plans
Page 157
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22. Management by objectives
‘A process where specific goals are set
collaboratively for the whole
organisation and every unit and
individual within it.
The goals are then used for planning,
managing organisational activities, and
assessing and rewarding contributions.’
Organisations use the Management By Objectives (MBO) process as a means to help link goals with plans. MBO has been used by many firms to aid coordination of goal-setting and planning processes at all levels so that members’ collective efforts ultimately support organisational goals.
Further discussion can be found on page 158.
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23. Management by objectives
Steps in the MBO process:
Develop organisational goals
Establish specific goals for departments
Formulate action plans
Implement and maintain self-control
Review progress periodically
Appraise performance
Pages 158-9
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24. Management by objectives
Strengths:
Helps link goals and plans
Clarifies priorities and 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
Pages
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25. Management by objectives
Assessing MBO:
Can heighten organisational performance
Short-term focus of US, Australian and NZ organisations limits application
20–25% success rate
By one estimate, almost half the Fortune 500 companies have used MBO, but only about 20-25% successfully. MBO system failures seem to stem from a lack of top-management support and poor goal-setting and communication skills among managers. Hence, how managers implement MBO impacts its effectiveness.
Further discussion can be found on page 160.
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26. The concept of strategic management
‘A process through which managers
formulate and implement strategies
geared to optimising strategic goal
achievement, given available
environmental and internal conditions.’
Strategic management is important because it helps management develop a competitive advantage, directs organisation members where to put their efforts, and shows the need for innovation.
Further discussion can be found on pages
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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
Pages 160-2
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28. Competitive analysis in strategy formulation
SWOT analysis–strengths (S), weaknesses (W), opportunities (O), threats (T)–relies upon:
Environmental assessment
Porter’s five competitive forces model
Organisational assessment
Organisational resources & capabilities
Distinctive competencies
Before an effective strategy for getting a competitive edge can be devised, managers must analyse a firm’s competitive situation. This means assessing environmental and organisational factors influencing ability to compete. This assessment can be done through SWOT analysis.
Further discussion can be found on page 163.
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29. Formulating functional-level strategy
Functional level strategies spell out
how functional areas can bolster
business-level strategy.
Example: An R&D department might accelerate innovation to provide new products before competitors.
Page 166
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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
While strategy formulation is important to strategic management, strategies will not have the intended impact unless implementation is effective. Strategy implementation involves management activities to put the strategy in place, set up strategic controls to monitor progress, and ultimately achieve organisational goals (see Figure 5.10 on page 166).
Further discussion can be found on page
© 2006 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management Foundations: A Pacific Rim Focus 1e by Bartol et al.

31. Lecture summary The nature of organisational goals
The planning process
Major components
Organisational mission statement
The nature of organisational goals
Benefits of goals
Levels of goals
Goals and performance
Goal content
Goal commitment
Work behaviour
Other work processes
Possible problems with goals
Page 172
© 2006 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management Foundations: A Pacific Rim Focus 1e by Bartol et al.

32. Lecture summary How goals facilitate performance
Direction, effort, persistence and planning
Linking goals and plans
Levels, recurrent use, time spans, promoting innovation
Possible obstacles to planning
Management by objectives (MBO)
The key steps in MBO process
Strengths and weaknesses
Page 172
© 2006 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management Foundations: A Pacific Rim Focus 1e by Bartol et al.

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
Page 172
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34. Lecture summary Formulating functional level strategy
Strategy implementation
Carrying out strategic plans
Maintaining strategic control
Page 172
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