1. BMGT – Principles of Management Seven hapter Organizational Planning & Goal Setting

2. BMGT – Principles of Management The Importance of Goals and Plans  Guides to action  Rationale for decisions  Standard of performance Goals and Plans The Tide Clothesline

3. BMGT – Principles of Management Characteristics of Effective Goal Setting Goal Characteristics  Specific and measurable  Cover key result areas  Challenging but realistic  Defined time period  Linked to rewards

4. SMART  Specific,  Measurable,  Achievable.  Realistic and  Timely

5. BMGT – Principles of Management Goals and Plans  A blueprint specifying the resource allocation, schedules, and other actions necessary for attaining goals.  Planning is considered the most fundamental function  Planning is the most controversial management function Goal  A desired future state that the organization attempts to realize. Plan

7. BMGT – Principles of Management Goals and Plans for External and Internal Audiences Mission Statement  Symbolizes legitimacy  Describes values, aspirations, and reason for being  Focuses on, customers, corporate values, product quality, and attitude toward employees Source of Motivation and Commitment  Facilitate employees’ identification with the organization Guides to Action  Provide a sense of direction  Focus attention on specific targets  Direct efforts toward important outcomes  What the organization stands for Standard of Performance  Serve as performance criteria  Provide a standard of assessment

8. BMGT – Principles of Management Strategic Goals and Plans Strategic Goals  Where the organization wants to be in the future  Pertain to the organization as a whole  Peter Drucker suggests eight content areas in developing goals Strategic Plans  Action Steps  Blueprint that defines the organizational activities and resource allocations

9. BMGT – Principles of Management Peter Drucker’s Eight Content Areas In Developing Goals  Marketing  Innovation  Productivity  Physical and financial resources  Profitability  Managerial performance and development  Worker performance and attitude  Public responsibility

10. BMGT – Principles of Management Tactical Goals and Plans Tactical Goals  Goals that define the outcomes that major divisions and departments must achieve Tactical Plans  Plans designed to help execute major strategic plans

11. BMGT – Principles of Management Operational Goals and Plans Operational Goals  Specific, measurable results expected from departments, work groups, and individuals Operational Plans  Organization’s lower levels that specify action steps toward achieving operational goals

13. MBO Benefits and Problems Benefits of MBOProblems with MBO 1. Manager and employee efforts are focused on activities that will lead to goal attainment. 2. Performance can be improved at all company levels. 3. Employees are motivated 4. Departmental and individual goals are aligned with company goals. 1. Constant change prevents MBO from taking hold. 2. An environment of poor employer- employee relations reduces MBO effectiveness. 3. Strategic goals may be displaced by operational goals. 4. Mechanistic organizations and values that discourage participation can harm the MBO process. 5. Too much paperwork saps MBO energy.

14. The Shewhart Cycle of Continuous Improvement 4. Act Analyze results; put leaning into action 1. Plan Decide what changes are desirable, and plan a change or test 3. Check Observe the results 2. Do Carry out the change or test Source: Based on Thomas F. Rienzo, “Planning Deming Management Service Organizations,” Business Horizons 36, no.3 (May-June1993),19-29

15. The New Planning Paradigm Six Rules of Planning  Start with a Strong Mission  Set Stretch Goals  Create an Environment that Encourages Learning  Design New Roles For Planning Staff  Make Continuous Improvement a Way of Life  Planning Still Starts and Stops at the Top

16. BMGT – Principles of Management The Importance of Goals and Plans  Guides to action  Rationale for decisions  Standard of performance Dilbert Zone

17. BMGT – Principles of Management Single-Use Plans For Goals Not Likely To Be Repeated  A program is a complex set of objectives and plans to achieve an important, one- time organizational goal  A project is similar to a program, but generally smaller in scope and complexity

18. BMGT – Principles of Management Standing Plans  A policy is a general guide to action and provides direction for people within the organization  Rules describe how a specific action is to be performed  Procedures define a precise series of steps to be used in achieving a specific job  Total quality management (TQM) to improve quality and production.

19. BMGT – Principles of Management Shewhart Cycle (PDCA) TQM  Plan a test or change in a specific process  Do the test or carry out the change  Check the results  Act to improve the process based on what you learn.