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Transcript of Planning compiled
Developed by Cool Pictures & MultiMedia Presentations Copyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.
Organizational Planning and Goal Setting
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Planning/Goals
• Of the four management functions, planning, organizing, leading, and controlling, planning is the most important.
• An organization exists for a single purpose, known as its mission, which is the basis for strategic goals and plans.
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The Importance of Goals and Plans
Guides to action
Rationale for decisions Standard of performance
Goals and Plans
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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.
Plans
GoalA desired future state that the organization attempts to
realize.
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Goals, plans and the relationship between them
• Goals are the targets that will get the organization to the vision’s achievement
• Plans are the “how-to” or strategy that achieves the goals.
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Who Does the Planning?
• Traditional Approach– Top management or central planning department
• Modern Approach– Decentralized planning staff– Interdepartmental task force composed of line managers.
• Planning under the New Paradigm– Plans developed from the bottom up– Managers are facilitators, helping workers to develop plans to
achieve goals
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Define Vision and Mission
• MissionMission- The reason a company or organization exists.
• The starting point for the planning process.• It is oriented in the present• VisionVision-Where an organization sees itself in the
future.• A picture of the future that comes from organizational
imagination
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Goals and plans within the organization are defined in a hierarchical fashion:
Strategic, Tactical Operational.
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Mission Statement
Strategic Goals/Plans Senior Management
(Organization as a whole)
Tactical Goals/Plans Middle Management
(Major divisions, functions)
Operational Goals/Plans Lower Management
(Departments, individuals)
Internal Message Legitimacy,
motivation, guides, rationale,
standards
External Message Legitimacy for
investors, customers, suppliers, community
Levels of Goals/Plans & Their Importance
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Kinds of Goals for a Regional Fast-Food
Chain
Accounting manager
ï Split accounts receivable/payable functions from other areas within two yearsï Computerize payroll system for each restaurant this yearï Pay all invoices within thirty days
Advertising director
ï Develop regional advertising campaigns within one yearï Negotiate 5 percent lower advertising rates next yearï Implement this yearís promotional strategy
Restaurant manager
ï Implement employee incentive system within one yearï Decrease waste by 5 percent this yearï Hire and train new assistant manager
Vice president ñfinance
ï Keep corporate debt to no more than 20 percent of liquid assets for next ten yearsï Revise computerized accounting system within five yearsï Earn 9 percent on excess cash this year
President and CEO
ï Provide 14 percent return to investors for at least ten yearsï Start or purchase new restaurant chain within five yearsï Negotiate new labor contract this year
Mission: Our mission is to operatea chain of restaurants that willprepare and serve high-qualityfood on a timely basis and atreasonable prices.
Vice president ñmarketing
ï Increase per store sales 5 percent per year for ten yearsï Target and attract two new market segments during next five yearsï Develop new promotional strategy for next year
Vice president ñoperations
ï Open 150 new restaurants during next ten yearsï Decrease food-container costs by 15 percent during next five yearsï Decrease average customer wait by thirty seconds this year
Strategic Goals
Tactical Goals
Operational Goals
Figure 7.2
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Goals and Plans for External and Internal Audiences
Legitimacy
Symbolizes legitimacyDescribes values, aspirations, and reason for beingFocuses on, customers, corporate values, product quality, and attitude toward employees
Source of Motivation and CommitmentFacilitate employees’ identification with the organization
Guides to ActionProvide a sense of directionFocus attention on specific targetsDirect efforts toward important outcomes
What the organization stands forStandard of PerformanceServe as performance criteria
Provide a standard of assessment
Inside Motorola: Motorola is a global leader in providing integrated communications
solutions and embedded electronic solutions.
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Strategic Goals and Plans
Strategic Goals• Where the organization wants to be in the future
• Pertain to the organization as a whole
• Strategic Plans• Action Steps used to attain strategic goals• Blueprint that defines the organizational activities and resource
allocations• Tends to be long term
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Tactical Goals and Plans
Tactical GoalsApply to middle management
Goals that define the outcomes that major divisions and departments must achieve
Tactical PlansPlans designed to help execute major strategic plans
Shorter than time frame than strategic plans
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Developing and Executing Tactical Plans
Developing tactical plans• Recognize and understand
overarching strategic plansand tactical goals
• Specify relevant resource andtime issues
• Recognize and identify humanresource commitments
Executing tactical plans• Evaluate each course of action
in light of its goal• Obtain and distribute
information and resources• Monitor horizontal and vertical
communication and integrationof activities
• Monitor ongoing activities forgoal achievement
Figure 7.4
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Operational Goals and Plans
Operational Goals Specific, measurable results expected from
departments, work groups, and individuals
Operational PlansOrganization’s lower levels that specify action
steps toward achieving operational goals
Tool for daily and weekly operations
Schedules are an important component
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Types of Operational Plans
Plan Description
Single-use plan Developed to carry out a course of action not likely to be repeated in the future
Program Single-use plan for a large set of activities Project Single-use plan of less scope and complexity than a
program
Standing plan Developed for activities that recur regularly over a pe-riod of time
Policy Standing plan specifying the organization’s general response to a designated problem or situation
Standard operating procedure Standing plan outlining steps to be followed in particu-lar circumstances
Rules and regulations Standing plans describing exactly how specific activi-ties are to be carried out
Table 7.1
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Single-Use PlansFor 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
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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
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Contingency Planning
Ongoing planning process
Action point 1 Action point 2 Action point 3 Action point 4Develop plan,consideringcontingency events
Implement plan andformally identifycontingency events
Specify indicatorsfor the contingencyevents and developcontingency plans foreach possible event
Successfully completeplan or contingencyplan
Monitor contingency event indicators andimplement contingency plan if necessary
Figure 7.3
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Considerations For Contingency Planning
• Identify uncontrollable factors;– recession– inflation– technological developments
• Minimizing Impact of Uncontrollable Factors– forecast for worst-case scenarios
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Criteria for effective Goals
• Specific• Measurable• Time Constrained• Achievable• Relate to something important
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Characteristics of EffectiveGoal Setting
Goal Characteristics
Specific and measurable
Cover key result areas
Challenging but realistic
Defined time period
Linked to rewards
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Barriers to Goal Setting and Planning
Major Barriers Inappropriate goals Improper reward system Dynamic and complex environment Reluctance to establish goals Resistance to change Constraints
Overcoming the Barriers Understanding the purposes of goals and planning Communication and participation Consistency, revision, and updating Effective reward systems
Table 7.2