Organizational
Planning
& Goal Setting
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Goals and Plans
Goal
A desired future state that the organization attempts to
realize.
Plan
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.
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Levels of Goals/Plans
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Goals and Plans Purposes
Legitimacy/Mission Statement
Inside Motorola
What the organization stands for.
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.
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Standard of Performance
Serve as performance criteria.
Provide a standard of assessment.
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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.
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Overall Planning Process
Begins With:
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 Mission statement
 Strategic goals
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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.
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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.
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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.
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Planning Time Horizon
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Means End-Chain
• The achievement of goals at low levels
permits the attainment of high-level goals.
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Characteristics of
Effective Goal Setting
Goal Characteristics
Specific and measurable.
Cover key result areas.
Challenging but realistic.
Defined time period.
Linked to rewards.
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Model of the MBO Process
Step 1: Setting Goals
Corporate Strategic Goals
Departmental Goals
Individual Goals
Step 2: Developing Action Plans
Action Plans
Review Progress
Step 3:
Reviewing Progress
Corrective Action
Appraisal of Overall Performance
Step 4: Appraising Overall
Performance
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MBO Benefits and Problems
Benefits of 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.
Problems with MBO
1. Constant change prevents MBO from
taking hold.
2. An environment of poor employeremployee 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.
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Plans
Single-Use
Standing
Contingency
Crisis Management
Three Stages
 Prevention
 Preparation
 Containment
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The New Planning Paradigm
Use
Temporary
Task Forces
Planning
Still Starts
and Stops at
the Top
Start with
a Strong
Mission
Six Rules of
Planning
Design
New Roles
for
Planning
Staff
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Create an
Environment
that
Encourages
Learning
Set Stretch
Goals
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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?
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Strategic Management Process
Scan External
Environment
•National
Identify Strategic
Factors
•Opportunities
•Global
•Threats
Evaluate Current:
•Mission
•Goals
Define New:
•Mission
SWOT
•Goals
•Strategies
•Grand Strategy
Scan Internal
Environment
•Core
Competence
Identify
Strategic:
•Corporate
•Business
•Functional
Implementing Strategy
via Changes in:
•Structure
•Human resources
•Information &
control systems
Identify Strategic
Factors
•Strengths
•Weaknesses
•Synergy
•Value Creation
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Porter’s Competitive Forces
Threat of substitute products
Potential new entrants
Rivalry among competitors
Bargaining power of buyers
Bargaining power of suppliers
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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.
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Competitive Strategies
1. Differentiation
2. Cost Leadership
3. Focus
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Partnership Strategies
“Collaboration”
High
Organizational
Acquisitions
Combination
Mergers
Degree of
Collaboration
Joint Ventures
Strategic
Alliance
Strategic Business Partnering
Preferred Supplier Arrangements
Low
Source: Adapted from Roberta Maynard. “Striking the Right March,” Nation’s Business (May 1996), 18-28.
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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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