Chapter 7
Planning and Goal Setting
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
PLANNING
A plan is a blueprint for goal
achievement and specifies the
necessary resource allocations,
schedules, tasks, and other
actions
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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
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7.4 A Strategy Map for
Aligning Goals
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Operational Planning
• Direct employees and resources
• Guide efficient and effective performance
• Includes planning approaches:
– Management by Objectives (MBO)
– Single-Use Plans
– Standing Plans
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7.5 Criteria for Effective
Goal Setting
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7.6 Model of the MBO Process
• Defined in 1954 by Peter Drucker
• Method for defining and monitoring goals
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7.7 MBO Benefits
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Single-Use and Standing Plans
Single-Use Plans
– Achieve one-time goal
– Programs and Projects
Standing Plans
– Ongoing plans
– Policies, rules, procedures
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Types of Single-Use and
Standing Plans
• Single-Use Plans
– Program: building new headquarters, converting
paper files to digital
– Project: renovating the office, setting up a new
company intranet
• Standing Plans
– Policy
– Rule
– Procedure
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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
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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
visualize future possibilities
• Crisis Planning
– Sudden, devastating, unexpected events
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7.9 Essentials 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 Goals (BHAG) from 1996
article on building your vision
• As times move faster and become more
turbulent, these are important
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7.10 A Performance Dashboard
for Planning
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