Decision Making
Is the cornerstone of planning.
Is the catalyst that drives the planning process.
Underlines every aspect of setting goals and formulating plans.
Planning
All organizations plan, but not in the same fashion.
All planning occurs within an environment context.
All goals require plans to guide in their achievement.
All goals are tied higher goals and plans.
Purposes of Goals
Provide guidance and a unified direction for people in the organization.
Have a strong affect on the quality of other aspects of planning.
Serve as a source of motivation for employees of the organization.
Kinds of Goals:
By Level
By Area
By Time Frame
Kinds of Goals by Level
Mission statement
Strategic Goals
Tactical Goals
Operational Goals
Mission Statement
A statement of an organization’s fundamental purpose.
Strategic Goals
Set by top managers of organization that address broad general issues.
Tactical Goals
Set by and fro middle managers; their focus is on how to operationalize actions to strategic goals.
Operational Goals
Set by and for lower-level managers to address issues associated with tactical goals
Kinds of Goals by Area
Goals set for the different functional areas of the organization
Kinds of Goals by Time Frame
Goals may be set for long-term, intermediate-term, or short-term time frames and for explicit time frames or open-ended.
Who sets goals?
All managers should be involved in the goal-setting process.
Managerial responsibility for goal setting should correspond to the managers’s level in the organization.
Managing Multiple Goals
Optimizing allows managers to balance and reconcile inconsistent or conflicting goals.
Managers can pursue one goal and exclude all others or to pursuer mid-range goal.
Kinds of Operational Plans
Strategic Plans.
Tactical Plans.
Operational Plans.
Strategic Plans
A general plan outlining resource allocation, priorities, and action steps to achieve strategic goals.
The plans are set by and for top management.
Tactical Plans
Plan aimed at achieving tactical goals set by and for middle management.
Operational Plans
Plans that have a short-term focus.
These plans are set by and for lower-level managers.
The Time Dimension of Planning
Based on the principle of commitment. Planning must provide sufficient time to fulfill the managerial commitments involved.
Time Frames for Planning
Long-range Plans.
Intermediate Plans.
Short-range Plans.
Long-range Plans
More than 5 years, strategic
Intermediate Plans
Usually cover from 1 to 5 years and parallel tactical plans.
Are the principle focus of organizational planning efforts.
Short-range Plans
Have a time frame of one year or less.
Include action plans and reaction (contingency) plans.
Who is responsible for planning?
Planning Staff Planning Task Force Board of Directors Chief Executive Officer Executive Committee Line Management
Planning Staff
Gather information, coordinate planning activities, and take a broader view than individual managers.
Planning Task Force
Created when the organization wants a special circumstance addressed.
Board of Directors
Establishes corporate mission and strategy
Engage in strategic planning.
Chief Executive Officer
Usually serves as a president or chair of the board of directors.
Has a major role in the planning process and implement the strategy.
Executive Committee
Composed of top executive within the organization.
Meet regularly for input to the CEO and review strategic plans.
Line Management
Persons with formal authority and responsibility for management of the organization.
Help to formulate strategy by providing information.
Responsive for executing the plans of the top management
Contingency Planning
The determination of alternative courses of action to be taken in an intended plan is unexpectedly disrupted or rendered inappropriate.
These plans help manager to cope with uncertainty and change.
Crisis Management
The set of procedures the organization uses in the event of a disaster or other unexpected calamity.
Major Barriers to Goal Setting and Planning
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.
MBO
Management by Objectives.
Effective technique for integrating goal setting and planning by giving subordinates a voice and clarifying what they are expected to accomplish.
Using Goals to Implement Plans Strengths:
Improved employee motivation Enhance communication Objective performance appraisals Focuses attention on appropriate goals Provides a systematic management philosophy.
Using Goals to Implement Plans Weaknesses:
Poor implementation of the goal setting process
Lack of top-management support for goal setting
Delegation of the goal-setting process to lower levels
Overemphasis on quantitative goals
Too much paperwork and record keeping
Criteria for effective goals
Specific and measurable Cover key areas Challenging but realistic Defined time period Liked to rewards