6. How Do Managers Plan? Elements of Planning Goals (also objectives)
Desired outcomes for individuals, groups, or entire organizations
Provide direction and performance evaluation criteria
Plans
Documents that outline how goals are to be accomplished
Describe how resources are to be allocated and establish activity schedules
Learning Objective #2
Chapter 6, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition
Copyright © 2009 Pearson Education Canada

7. Approaches to Establishing Goals
Traditional Goal Setting
Broad goals are set at the top of the organization
Goals are then broken into sub-goals for each organizational level
Goals are intended to direct, guide, and constrain from above
Goals lose clarity and focus as lower-level managers attempt to interpret and define the goals for their areas of responsibility
Chapter 6, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition
Copyright © 2009 Pearson Education Canada

8. Exhibit 6.1 Traditional Objective Setting”
We need to improve the
company ’
s performance. ” ”
I want to see a
significant improvement
Top
in this division ’
s profits. ”
Management ’ s
Objective ”
Increase profits
Division
regardless of the means. ”
Manager ’
s Objective ”
Don ’
t worry about
quality; just work fast. ”
Department
Manager ’
s Objective
Individual
Employee ’
s Objective
Chapter 6, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition
Copyright © 2009 Pearson Education Canada

9. Approaches to Establishing Goals
Maintaining the Hierarchy of Goals
Means-Ends Chain
The integrated network of goals that results from establishing a clearly defined hierarchy of organizational goals
Achievement of lower-level goals is the means by which to reach higher-level goals (ends)
Chapter 6, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition
Copyright © 2009 Pearson Education Canada

10. Approaches to Establishing Goals
Management By Objectives (MBO)
Specific performance goals are jointly determined by employees and managers.
Progress toward accomplishing goals is periodically reviewed.
Rewards are allocated on the basis of progress toward the goals.
Key elements of MBO:
Goal specificity, participative decision making, an explicit performance/evaluation period, feedback
Chapter 6, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition
Copyright © 2009 Pearson Education Canada

11. Exhibit 6.2 Steps in a Typical MBO Program
Develop Action Plans
Review Objectives and
Give Rewards for
Jointly Set Objectives
to Achieve Objectives
Provide Feedback
Achieved Objectives
Overall objectives
Managers and
and strategies of
employees work on
organization
action plans together
Objectives allocated to
Action plans
divisional and
implemented
departmental units
Specific objectives
collaboratively set
with employees
Chapter 6, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition
Copyright © 2009 Pearson Education Canada

12. Does MBO Work? Reason for MBO Success
Top management commitment and involvement
Potential Problems with MBO Programs
Not as effective in dynamic environments that require constant resetting of goals
Overemphasis on individual accomplishment may create problems with teamwork
Allowing the MBO program to become an annual paperwork shuffle
Chapter 6, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition
Copyright © 2009 Pearson Education Canada

13. Exhibit 6.3 Characteristics of Well-Designed Goals
Written in terms of outcomes rather than actions
Measurable and quantifiable
Clear time frame
Challenging yet attainable
Written down
Communicated to all necessary organizational members
Chapter 6, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition
Copyright © 2009 Pearson Education Canada

14. Steps in Goal Setting Review the organization’s mission statement
Do goals reflect the mission?
Evaluate available resources
Are resources sufficient to accomplish the mission?
Determine goals individually or with others
Are goals specific, measurable, and timely?
Write down the goals and communicate them
Is everybody on the same page?
Review results and whether goals are being met
What changes are needed in mission, resources, or goals?
Chapter 6, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition
Copyright © 2009 Pearson Education Canada

15. Exhibit 6.4 Types of Plans Types of Plans Breadth Time Frame
Specificity
Frequency of Use
Strategic
Long term
Directional
Single use •
Should we expand
into overseas
markets? •
Should we develop
new products? •
How large would we
like the company to
be in five years?
Operational
Short term
Specific
Standing •
Should we order new
equipment to produce   
our number-one   
product more   
efficiently? •
How many extra   
employees should we   
hire for the year-end   
sales rush? •
How can we improve   
quality control on the   
production line?
Chapter 6, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition
Copyright © 2009 Pearson Education Canada

16. Types of Plans BREADTH Strategic Plans Operational Plans
Apply to the entire organization
Establish the organization’s overall goals
Seek to position the organization in terms of its environment
Cover extended periods of time
Operational Plans
Specify the details of how the overall goals are to be achieved
Cover short time period
Chapter 6, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition
Copyright © 2009 Pearson Education Canada

17. Types of Plans TIME FRAME Long-Term Plans
Time frames extending beyond three years
Short-Term Plans
Time frames of one year or less
SPECIFICITY
Specific Plans
Clearly defined and leave no room for interpretation
Directional Plans
Flexible plans that set out general guidelines, provide focus, yet allow discretion in implementation
Chapter 6, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition
Copyright © 2009 Pearson Education Canada

18. Types of Plans FREQUENCY OF USE Single-use Plan Standing Plans
A one-time plan specifically designed to meet the needs of a unique situation
Standing Plans
Ongoing plans that provide guidance for activities performed repeatedly
Chapter 6, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition
Copyright © 2009 Pearson Education Canada

19. Exhibit 6.5 Specific Vs. Directional Plans
Chapter 6, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition
Copyright © 2009 Pearson Education Canada

20. Developing Plans Contingency Factors in Planning
Manager’s level in the organization
Strategic plans at higher levels
Operational plans at lower levels
Degree of environmental uncertainty
Stable environment: specific plans
Dynamic environment: specific but flexible plans
Length of future commitments
Current plans affecting future commitments must be sufficiently long-term to meet the commitments
Chapter 6, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition
Copyright © 2009 Pearson Education Canada

21. Exhibit 6.6 Planning in the Hierarchy of Organizations
Chapter 6, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition
Copyright © 2009 Pearson Education Canada

22. Approaches to Planning
Establishing a formal planning department
A group of planning specialists who help managers write organizational plans
Planning is a function of management; it should never become the sole responsibility of planners
Involving organizational members in the process
Plans are developed by members of organizational units at various levels and then coordinated with other units across the organization
Chapter 6, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition
Copyright © 2009 Pearson Education Canada