This chapter discusses managerial planning and goal setting. It defines goals and plans, explaining that goals are desired future states and plans are blueprints for achieving goals. There are different levels of goals in an organization, from strategic goals that define the organization's overall direction to operational goals set at the department level. Effective goals are specific, measurable, attainable, relevant and time-bound. The chapter also describes management by objectives as a process for setting goals and monitoring progress. It emphasizes the importance of contingency planning to prepare for unexpected events and having dynamic plans to adapt to a changing environment.

1. MANAGEMENT
RICHARD L. DAFT

2. Managerial Planning and
Goal Setting
CHAPTER 6

3. 3
chapter6
• Define goals and plans and explain the relationship between them.
• Explain the concept of organizational mission and how it influences goal
setting and planning.
• Describe the types of goals an organization should have and how
managers use strategy maps to align goals.
• Define the characteristics of effective goals.
• Describe the four essential steps in the management by objectives (MBO)
process.
• Explain the difference between single-use plans and standing plans.
• Describe and explain the importance of contingency planning, scenario
building, and crisis planning in today’s environment.
• Summarize the guidelines for high-performance planning in a fast-
changing environment.
Learning Outcomes

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chapter6
Does Goal Setting Fit Your
Management Style?
• Managers must plan where the organization
should go in the future
• Managers must plan for unexpected events
• The company establishes a basic mission and
develops goals and objectives
• Plans should meet environmental changes and
expectations of stakeholders
• Planning is fundamental to all organizations
• Everything stems from planning

5. 5
chapter6 Overview of Goals and Plans
• A goal is a desired future state that the
organization attempts to realize
• A plan is a blueprint for goal achievement
• There are different levels of planning and
goals in an organization
• Goals at each level of the organization
guide the organization

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Levels of Goals/Plans
and their Importance

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Characteristics of
Goals and Plans
 Legitimacy
 Source of motivation and commitment
 Resource allocation
 Guides to action
 Rationale for decisions
 Standards of performance

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The Organizational Planning
Process

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chapter6 Organizational Mission
• The mission statement is the reason the
organization exists
– Top of the goal hierarchy
– Describes the values, aspirations and reason
for being
– A well-defined mission is the basis for all
other goals
• Mission statements outline the stated
purpose and values to stakeholders

10. 10
chapter6 Types of Goals and Plans
• Strategic Goals – official goals, broad statements
about the organization
– Define the action steps the company intends to attain
– The blueprint that defines activities
• Tactical Goals – help execute major strategic plans
– Specific part of the company’s strategy
– Plans of the divisions and departments
• Operational Goals – results expected from
departments, work groups, and individuals
– Lower levels of the organization
– Specific action steps

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Aligning Goals
with Strategy Maps
• Goals should be consistent and mutually
supportive
• The achievement of goals at low levels
permits the attainment of high-level goals
• Individuals, teams, and departments
should be working in concert

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Strategy Map for
Aligning Goals
Goals
should be
consistent
and
mutually
supportive

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chapter6 Operational Planning
• Operational goals should direct employees
and resources toward outcomes
• It is important to establish effective goals
– Management by objective
– Single-use plans
– Standing plans

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Characteristics of
Effective Goal Setting

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chapter6 Management by Objective
Defined by management scholar
Peter Drucker in his 1954 book,
The Practice of Management
Process of defining goals and
monitoring progress

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chapter6 Model of the MBO Process

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chapter6 MBO Benefits and Problems

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Single-Use and
Standing Plans

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Planning for a Turbulent
Environment
• Contingency Planning – plans for
emergencies, setbacks or unexpected
conditions
• Building Scenarios – visualizing future
possibilities
• Crisis Planning – preparing to cope with
unexpected events

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Essential Stages of
Crisis Planning

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Planning for High
Performance
Traditional Approach:
• Done by top
executives (top down)
• Central planning
departments
• Planning specialist
High-Performance
Approach:
• Decentralized planning
• Managers plan
throughout the
organization
• Now involves line-
managers and
employees
• Dynamic plans for fast-
changing needs
Stretch Goals and Big
Hairy Audacious
Goals (BHAG) are big
and inspiring

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Performance Dashboard
for Planning
• Gauge progress
toward goals
• Align and track
goals
• All employees can
track progress