1. Managerial Planning and Goal Setting
Chapter 6
Managerial Planning and Goal Setting

2. 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 fail
Flounder = struggle
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

3. Goals, Plans, Planning
A goal is a desired future state that the organization attempts to realize
PLANNING determining the goals and defining the means for achieving them.
A plan is a blueprint for goal achievement and specifies the necessary resource allocations, schedules, tasks, and other actions

4. 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
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

5. Strategic Goals, Plan, Planning
 Strategic goals - broad statements describing where the organization wants to be in the future. official goals; whole organization
Strategic plans define the action steps by which the company intends to attain strategic goals. A strategic plan is a blueprint that defines organizational activities and resource allocations.
Strategic planning tends to be long-term.

6. 7.2 The Organizational Planning Process
The overall planning process prevents managers from thinking merely in terms of day-to-day activities.

7. Tactical Goals, Plans
 Tactical goals are the results that major divisions and departments within the organization intend to achieve; middle management; describe what major subunits must do in order for the organization to achieve strategic goals.
Tactical plans define what major departments and organizational subunits will do to implement the organization’s strategic plan. They tend to be for a shorter time period. 

8. Operational Goals, Plans
 Operational goals are the specific results expected from departments, work groups, and individuals.
Operational plans are developed at the lower levels of the organization to specify action plans toward achieving operational goals and to support tactical plans.

9. 7.1 Levels of Goals and Plans

10. Why Aligning Goals?
Effectively designed organizational goals are aligned into a hierarchy in which the achievement of goals at lower levels permits the attainment of higher-level goals.
Operational goals lead to the achievement of tactical goals, which lead to the attainment of strategic goals.
Organizational performance is an outcome of how well these interdependent elements are aligned, so that individuals, teams, departments, and so forth are working in concert to attain specific goals that ultimately help the organization fulfill its mission.

11. Operational Planning
Use operational goals to direct employees and resources
Guide efficient and effective performance to achieve specific outcomes
Includes planning approaches such as:
Management by Objectives (MBO)
Single-Use Plans
Standing Plans

12. 7.5 Criteria for Effective Goal Setting
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

13. 7.6 Model of the MBO Process
Defined in 1954 by Peter Drucker
Method for defining and monitoring goals

14. 7.7 MBO Benefits

15. Single-Use Plans vs. Standing Plans
Achieve one-time goal
Program/Project: building a headquarters, converting paper files to digital, renovating the office, setting up a new company intranet
Standing Plans
Ongoing plans
Policies, rules, procedures

16. Benefits and Limitations of Planning
Goals and plans provide a source of motivation and commitment
Goals and plans guide resource allocation (budgeting)
Goals and plans are a guide to action (specific targets)
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

17. 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 visualize future possibilities
Crisis Planning
Sudden, devastating, unexpected events
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.