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Chapter 7

Managerial Planning and Goal Setting

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.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 flounder

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Goals and Plans

A goal is a desired future state that the organization attempts to

realize

A plan is a blueprint for goal achievement and specifies the necessary

resource allocations, schedules, tasks, and

other actions

PLANNING

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7.1 - Levels of Goals and Plans

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7.2 - The Organizational Planning Process

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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 using a strategy map

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7.4 - A Strategy Map for Aligning Goals

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Operational Planning

Direct employees and resources

Guide toward efficient and effective performance

Includes planning approaches:Management-by-Objectives (MBO)Single-Use PlansStanding Plans

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.9

7.5 - Characteristics of Effective Goal Setting

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.10

7.6 - Model of the MBO Process

Defined in 1954 by Peter Drucker Method for defining goals and monitoring

performance

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.11

7.7 - MBO Benefits

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Single-Use and Standing Plans

Single-Use PlansAchieve one-time goalsPrograms and projects

Standing PlansOngoing plansPolicies, rules, procedures

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Types of Single-Use and Standing Plans

Single-Use PlansProgram: building new headquarters,

converting paper files to digitalProject: renovating the office, setting up a

new company intranet

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Types of Single-Use and Standing Plans

Standing PlansPolicy: Sexual harassment policies,

Internet and social media policiesRule: No eating rule in areas of company

where employees are visible to publicProcedure: Procedures for issuing

refunds, Procedures for handling employee grievances

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.15

Benefits and Limitations of Planning

• Goals and plans provide a source of motivation and commitment

• Goals and plans guide resource allocation

• Goals and plans are a guide to action

• 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

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.16

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 discontinuities and visualize future possibilities

Crisis PlanningUnexpected events that are sudden and

devastating

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7.9 - Essential Stages of Crisis Planning

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Set Stretch Goals for Excellence

Stretch goals are highly ambitious Clear, compelling, and imaginative Require innovation Goals must be seen as achievable Like Big Hairy Audacious Goal (BHAG)

from 1996 article on “Building Your Company’s Vision”

As times move faster and become more turbulent, these are important