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Copyright © 2018 Pearson Education, Ltd. All Rights Reserved
Chapter 8
Planning and Goal-Setting
Copyright © 2018 Pearson Education, Ltd. All Rights Reserved
Learning Objectives
Define the nature and purposes of planning.
Classify the types of goals organizations might have and the
plans they use.
Compare and contrast approaches to goal-setting and
planning.
Know how to set goals personally and create a useful,
functional to-do list
Develop your skill at helping your employees set goals
Discuss contemporary issues in planning.
Copyright © 2018 Pearson Education, Ltd. All Rights Reserved
What is Planning?
•Planning: management function that involves
setting goals, establishing strategies for achieving
those goals, and developing plans to integrate and
coordinate work activities
•Formal planning
•Specific, time-oriented goals
•Goals written and shared
Copyright © 2018 Pearson Education, Ltd. All Rights Reserved
Why Do Managers Plan?
•Provides direction
•Reduces uncertainty
•Minimizes waste and redundancy
•Establishes the goals and standards for controlling
Copyright © 2018 Pearson Education, Ltd. All Rights Reserved
Planning and Performance
•Formal planning is associated with positive financial
results
•Quality of planning and implementation lead to
high performance than how much planning is done
•External factors can reduce the impact of planning
on performance
•Planning-performance relationship seems to be
influenced by the planning time frame. (At least
four years).
Copyright © 2018 Pearson Education, Ltd. All Rights Reserved
Goals and Plans
•Goals (objectives): desired outcomes or targets
•Plans: documents that outline how goals are going
to be met
Copyright © 2018 Pearson Education, Ltd. All Rights Reserved
Types of Goals
•Financial goals: related to the financial
performance of an organization.
•Strategic goals: related to all other areas of an
organization’s performance.
•Stated goals: official statements of what an
organization says, and what it wants its various
stakeholders to believe, its goals are
•Real goals: goals that an organization actually
pursues, as defined by the actions of its members
Copyright © 2018 Pearson Education, Ltd. All Rights Reserved
Types of Plans
Exhibit 8-1 shows the most popular ways to describe organizational plans.
Copyright © 2018 Pearson Education, Ltd. All Rights Reserved
Strategic and Operational Plans
•Strategic plans: plans that apply to the entire
organization and establish the organization’s overall
goals
•Operational plans: plans that encompass a
particular operational area of the organization
Copyright © 2018 Pearson Education, Ltd. All Rights Reserved
Long-term and Short-term Plans
•Long-term plans: plans with a time frame beyond
three years
•Short-term plans: plans covering one year or less
Copyright © 2018 Pearson Education, Ltd. All Rights Reserved
Specific and Directional Plans
•Specific plans: plans that are clearly defined and
leave no room for interpretation
•Directional plans: plans that are flexible and set out
general guidelines
Copyright © 2018 Pearson Education, Ltd. All Rights Reserved
Single-use and Standing Plans
•Single use plans: a one-time plan specifically
designed to meet the needs of a unique situation
•Standing plans: ongoing plans that provide
guidance for activities performed repeatedly
Copyright © 2018 Pearson Education, Ltd. All Rights Reserved
Approaches to Setting Goals
•Traditional goal-setting: an approach to setting
goals in which top managers set goals that then
flow down through the organization and become
subgoals for each organizational area
Copyright © 2018 Pearson Education, Ltd. All Rights Reserved
The Downside of Traditional Goal-Setting
Exhibit 8-2 illustrates what can happen as the goals make their way down from the top of the
organization to lower levels.
Copyright © 2018 Pearson Education, Ltd. All Rights Reserved
Means-Ends Chain and MBO
•Means-ends chain: an integrated network of goals
in which the accomplishment of goals at one level
serves as the means for achieving the goals, or
ends, at the next level
•Management by objectives (MBO): a process of
setting mutually agreed upon goals and using those
goals to evaluate employee performance
Copyright © 2018 Pearson Education, Ltd. All Rights Reserved
Steps in MBO
Step
Step 1: The organization’s overall objectives and strategies are formulated.
Step 2: Major objectives are allocated among divisional and departmental units.
Step 3: Unit managers collaboratively set specific objectives for their units with their managers.
Step 4: Specific objectives are collaboratively set with all department members.
Step 5: Action plans, defining how objectives are to be achieved, are specified and agreed upon by
managers and employees.
Step 6: The action plans are implemented.
Step 7: Progress toward objectives is periodically reviewed, and feedback is provided.
Step 8: Successful achievement of objectives is reinforced by performance-based rewards.
Copyright © 2018 Pearson Education, Ltd. All Rights Reserved
Steps in Goal-Setting
1. Review the organization’s mission, or purpose.
2. Evaluate available resources.
3. Determine the goals individually or with input
from others.
4. Write down the goals and communicate them to
all who need to know.
5. Review results and whether goals are being met.
Copyright © 2018 Pearson Education, Ltd. All Rights Reserved
Developing Plans
Contingency factors in planning:
•Organizational level
•Degree of environmental uncertainty
•Length of future commitments
Copyright © 2018 Pearson Education, Ltd. All Rights Reserved
Planning and Organizational Level
Exhibit 8-5 shows the relationship between a manager’s level in the organization and the type of
planning done.
Copyright © 2018 Pearson Education, Ltd. All Rights Reserved
Environmental Uncertainty
•When uncertainty is high, plans should be specific,
but flexible.
Length of Future Commitments
•Commitment concept: plans should extend far
enough to meet those commitments made when
the plans were developed.
Copyright © 2018 Pearson Education, Ltd. All Rights Reserved
Approaches to Planning
•Formal planning department: a group of
planning specialists whose sole responsibility is
helping to write organizational plans
Copyright © 2018 Pearson Education, Ltd. All Rights Reserved
How Can Managers Plan Effectively in
Dynamic Environments?
•Develop plans that are specific but flexible
•Keep planning even when the environment is
uncertain
•Allow lower organizational levels to set goals and
develop plans

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Planning work activities (ch 8)

  • 1. Copyright © 2018 Pearson Education, Ltd. All Rights Reserved Chapter 8 Planning and Goal-Setting
  • 2. Copyright © 2018 Pearson Education, Ltd. All Rights Reserved Learning Objectives Define the nature and purposes of planning. Classify the types of goals organizations might have and the plans they use. Compare and contrast approaches to goal-setting and planning. Know how to set goals personally and create a useful, functional to-do list Develop your skill at helping your employees set goals Discuss contemporary issues in planning.
  • 3. Copyright © 2018 Pearson Education, Ltd. All Rights Reserved What is Planning? •Planning: management function that involves setting goals, establishing strategies for achieving those goals, and developing plans to integrate and coordinate work activities •Formal planning •Specific, time-oriented goals •Goals written and shared
  • 4. Copyright © 2018 Pearson Education, Ltd. All Rights Reserved Why Do Managers Plan? •Provides direction •Reduces uncertainty •Minimizes waste and redundancy •Establishes the goals and standards for controlling
  • 5. Copyright © 2018 Pearson Education, Ltd. All Rights Reserved Planning and Performance •Formal planning is associated with positive financial results •Quality of planning and implementation lead to high performance than how much planning is done •External factors can reduce the impact of planning on performance •Planning-performance relationship seems to be influenced by the planning time frame. (At least four years).
  • 6. Copyright © 2018 Pearson Education, Ltd. All Rights Reserved Goals and Plans •Goals (objectives): desired outcomes or targets •Plans: documents that outline how goals are going to be met
  • 7. Copyright © 2018 Pearson Education, Ltd. All Rights Reserved Types of Goals •Financial goals: related to the financial performance of an organization. •Strategic goals: related to all other areas of an organization’s performance. •Stated goals: official statements of what an organization says, and what it wants its various stakeholders to believe, its goals are •Real goals: goals that an organization actually pursues, as defined by the actions of its members
  • 8. Copyright © 2018 Pearson Education, Ltd. All Rights Reserved Types of Plans Exhibit 8-1 shows the most popular ways to describe organizational plans.
  • 9. Copyright © 2018 Pearson Education, Ltd. All Rights Reserved Strategic and Operational Plans •Strategic plans: plans that apply to the entire organization and establish the organization’s overall goals •Operational plans: plans that encompass a particular operational area of the organization
  • 10. Copyright © 2018 Pearson Education, Ltd. All Rights Reserved Long-term and Short-term Plans •Long-term plans: plans with a time frame beyond three years •Short-term plans: plans covering one year or less
  • 11. Copyright © 2018 Pearson Education, Ltd. All Rights Reserved Specific and Directional Plans •Specific plans: plans that are clearly defined and leave no room for interpretation •Directional plans: plans that are flexible and set out general guidelines
  • 12. Copyright © 2018 Pearson Education, Ltd. All Rights Reserved Single-use and Standing Plans •Single use plans: a one-time plan specifically designed to meet the needs of a unique situation •Standing plans: ongoing plans that provide guidance for activities performed repeatedly
  • 13. Copyright © 2018 Pearson Education, Ltd. All Rights Reserved Approaches to Setting Goals •Traditional goal-setting: an approach to setting goals in which top managers set goals that then flow down through the organization and become subgoals for each organizational area
  • 14. Copyright © 2018 Pearson Education, Ltd. All Rights Reserved The Downside of Traditional Goal-Setting Exhibit 8-2 illustrates what can happen as the goals make their way down from the top of the organization to lower levels.
  • 15. Copyright © 2018 Pearson Education, Ltd. All Rights Reserved Means-Ends Chain and MBO •Means-ends chain: an integrated network of goals in which the accomplishment of goals at one level serves as the means for achieving the goals, or ends, at the next level •Management by objectives (MBO): a process of setting mutually agreed upon goals and using those goals to evaluate employee performance
  • 16. Copyright © 2018 Pearson Education, Ltd. All Rights Reserved Steps in MBO Step Step 1: The organization’s overall objectives and strategies are formulated. Step 2: Major objectives are allocated among divisional and departmental units. Step 3: Unit managers collaboratively set specific objectives for their units with their managers. Step 4: Specific objectives are collaboratively set with all department members. Step 5: Action plans, defining how objectives are to be achieved, are specified and agreed upon by managers and employees. Step 6: The action plans are implemented. Step 7: Progress toward objectives is periodically reviewed, and feedback is provided. Step 8: Successful achievement of objectives is reinforced by performance-based rewards.
  • 17. Copyright © 2018 Pearson Education, Ltd. All Rights Reserved Steps in Goal-Setting 1. Review the organization’s mission, or purpose. 2. Evaluate available resources. 3. Determine the goals individually or with input from others. 4. Write down the goals and communicate them to all who need to know. 5. Review results and whether goals are being met.
  • 18. Copyright © 2018 Pearson Education, Ltd. All Rights Reserved Developing Plans Contingency factors in planning: •Organizational level •Degree of environmental uncertainty •Length of future commitments
  • 19. Copyright © 2018 Pearson Education, Ltd. All Rights Reserved Planning and Organizational Level Exhibit 8-5 shows the relationship between a manager’s level in the organization and the type of planning done.
  • 20. Copyright © 2018 Pearson Education, Ltd. All Rights Reserved Environmental Uncertainty •When uncertainty is high, plans should be specific, but flexible. Length of Future Commitments •Commitment concept: plans should extend far enough to meet those commitments made when the plans were developed.
  • 21. Copyright © 2018 Pearson Education, Ltd. All Rights Reserved Approaches to Planning •Formal planning department: a group of planning specialists whose sole responsibility is helping to write organizational plans
  • 22. Copyright © 2018 Pearson Education, Ltd. All Rights Reserved How Can Managers Plan Effectively in Dynamic Environments? •Develop plans that are specific but flexible •Keep planning even when the environment is uncertain •Allow lower organizational levels to set goals and develop plans