MANAGEMENT
RICHARD L. DAFT
Managerial Planning and
Goal Setting
CHAPTER 6
chapter6
Learning Outcomes
• 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 fastchanging environment.
3
Copyright ©2010 by South-Western, a division of Cengage
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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
4
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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
5
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chapter6
Levels of Goals/Plans
and their Importance
6
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Characteristics of
Goals and Plans
chapter6
 Legitimacy
 Source of motivation and commitment
 Resource allocation
 Guides to action
 Rationale for decisions
 Standards of performance
7
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chapter6
The Organizational
Planning Process
8
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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
9
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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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10
chapter6
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
11
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chapter6
Strategy Map for
Aligning Goals
Goals
should be
consistent
and
mutually
supportive
12
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Learning. All rights reserved.
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
13
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chapter6
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
16
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chapter6 MBO Benefits and Problems
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chapter6
Single-Use and
Standing Plans
18
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Learning. All rights reserved.
chapter6
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
19
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chapter6
Essential Stages of
Crisis Planning
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Planning for High
Performance
chapter6
Traditional Approach:
• Done by top
executives (top down)
• Central planning
departments
• Planning specialist
Stretch Goals and Big
Hairy Audacious
Goals (BHAG) are big
and inspiring
High-Performance
Approach:
• Decentralized planning
• Managers plan
throughout the
organization
• Now involves linemanagers and
employees
• Dynamic plans for fastchanging needs
21
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Performance Dashboard
for Planning
chapter6
• Gauge progress
toward goals
• Align and track
goals
• All employees can
track progress
22
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