Planning.ppt

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Organizational
Planning
& Goal Setting

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.
Plan
Goal
A desired future state that the organization attempts to
realize.

Levels of Goals/Plans

Goals and Plans Purposes
Legitimacy/Mission Statement
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.
Inside Motorola

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.

Overall Planning Process
Begins With:  Mission statement
 Strategic goals

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.
• Blueprint that defines the organizational activities and
resource allocations.

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.

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.

Planning Time Horizon

Means End-Chain
• The achievement of goals at low levels
permits the attainment of high-level goals.

Characteristics of
Effective Goal Setting
Goal Characteristics
Specific and measurable.
Cover key result areas.
Challenging but realistic.
Defined time period.
Linked to rewards.

Model of the MBO Process
Step 1: Setting Goals Step 2: Developing Action Plans
Step 3:
Reviewing Progress
Corporate Strategic Goals
Departmental Goals
Individual Goals
Step 4: Appraising Overall
Performance
Appraisal of Overall Performance
Corrective Action
Review Progress
Action Plans

MBO Benefits and Problems
Benefits of MBO Problems 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.

Plans
Single-Use
Standing
Contingency
Crisis Management
Three Stages
Prevention
Preparation
Containment

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
Use
Temporary
Task Forces
Planning
Still Starts
and Stops at
the Top

Strategic Management Questions
 What changing and trends are occurring?
 Who are the customers?
 What products or services should we offer?
 How can we offer these products or
services efficiently?

Strategic Management Process
Identify Strategic
Factors
•Strengths
•Weaknesses
Scan Internal
Environment
•Core
Competence
•Synergy
•Value Creation
Identify
Strategic:
•Corporate
•Business
•Functional
Define New:
•Mission
•Goals
•Grand Strategy
Evaluate Current:
•Mission
•Goals
•Strategies
Scan External
Environment
•National
•Global
•Opportunities
•Threats
Identify Strategic
Factors
SWOT
Implementing Strategy
via Changes in:
•Structure
•Human resources
•Information &
control systems

Porter’s Competitive Forces
Potential new entrants
Bargaining power of buyers
Bargaining power of suppliers
Threat of substitute products
Rivalry among competitors

The Five Forces Affecting Industry
Competition
SOURCES: Based on Michael
E. Porter, Competitive
Strategy: Techniques for
Analyzing Industries and
Competitors (New York: Free
Press, 1980); and Michael E.
Porter, “Strategy and the
Internet,” Harvard Business
Review (March, 2001), 63-78.

Competitive Strategies
1. Differentiation
2. Cost Leadership
3. Focus

Partnership Strategies
“Collaboration”
High
Low
Organizational
Combination
Strategic
Alliance
Degree of
Collaboration
Preferred Supplier Arrangements
Strategic Business Partnering
Joint Ventures
Mergers
Acquisitions
Source: Adapted from Roberta Maynard. “Striking the Right March,” Nation’s Business (May 1996), 18-28.

Tools for Putting
Strategy into Action
SOURCE: Adapted from Jay R. Galbraith and Robert K. Kazanjian, Strategy Implementation: Structure, Systems, and Process, 2d ed. (St. Paul, Minn.: West, 1986), 115. Used
with permission.

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