Understanding
Management
First Canadian Edition
Slides prepared by
Janice Edwards
College of the Rockies
Copyright © 2009 Nelson Education Ltd.
Chapter 5
Organizational Goal
Setting and Planning
Learning Objectives
1.
2.
3.
4.
5.
6.
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 goals an organization should have and why they
resemble a hierarchy.
Define the characteristics of effective goals.
Describe the four essential steps in the MBO process.
Explain the difference between single-use plans and standing
plans.
Copyright © 2009 Nelson Education Ltd.
5-3
Learning Objectives (Cont’d)
7.
8.
9.
10.
11.
Discuss how planning in a turbulent environment differs
from traditional approaches to planning.
Describe and explain the importance of the three stages of
crisis management planning.
Define the components of strategic management.
Explain the major considerations in formulating functional
strategies.
Describe the strategic planning process and SWOT
analysis.
Copyright © 2009 Nelson Education Ltd.
5-4
Learning Objectives (cont’d)
12.
13.
Describe business-level strategies, including Michael E.
Porter’s competitive forces and strategies and partnership
strategies.
Discuss the organizational dimensions used for
implementing strategy.
Copyright © 2009 Nelson Education Ltd.
5-5
Overview of 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.
Copyright © 2009 Nelson Education Ltd.
5-6
Ex. 5.1
Levels of Goals/Plans
and Their Importance
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5-7
Purposes of Goals and Plans
•
•
•
•
•
•
Legitimacy/mission statement.
Source of motivation and commitment.
Resource allocation.
Guides to action.
Rationale for decisions.
Standard of performance.
Copyright © 2009 Nelson Education Ltd.
5-8
Goals in Organizations
Mission:
•
The organization’s reason for existence.
Mission Statement:
•
A broadly stated definition of the organization’s
basic business scope and operations that
distinguishes it from similar types of
organizations.
Copyright © 2009 Nelson Education Ltd.
5-9
Goals and Plans: Strategic
Strategic Goals

Broad statements of where the organization wants to be
in the future, pertaining to the organization as a whole
rather than to specific divisions or departments.
Strategic Plans

The action steps by which an organization intends to
attain strategic goals.
Copyright © 2009 Nelson Education Ltd.
5-10
Goals and Plans: Tactical
Tactical Goals
•
Goals that define the outcomes that major divisions and
departments must achieve for the organization to reach its
overall goals.
Tactical Plans
•
Plans designed to help execute major strategic plans and to
accomplish a specific part of the company’s strategy.
Copyright © 2009 Nelson Education Ltd.
5-11
Goals and Plans: Operational
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.
Copyright © 2009 Nelson Education Ltd.
5-12
Ex. 5.3
Characteristics of Effective Goal Setting
Goal Characteristics:
• Specific and measurable
• Cover key result areas
• Challenging but realistic
• Defined time period
• Linked to rewards
Copyright © 2009 Nelson Education Ltd.
5-13
Ex. 5.4
Model of the MBO Process
Step 1: Setting Goals
Step 2: Developing Action Plans
• Corporate Strategic Goals
• Departmental Goals
Action Plans
• Individual Goals
Review Progress
Step 3:
Reviewing Progress
Take Corrective
Action
Appraise Performance
Step 4: Appraising Overall
Performance
Copyright © 2009 Nelson Education Ltd.
5-14
Ex. 5.5
MBO Benefits and Problems
Benefits:
•
Manager and employee efforts are focused on
activities that will lead to goal attainment.
•
Performance can be improved at all company levels.
•
Employees are motivated.
•
Departmental and individual goals are aligned with
company goals.
Copyright © 2009 Nelson Education Ltd.
5-15
Ex. 5.5
MBO Benefits and Problems (Cont’d)
Problems:
•
Constant change prevents MBO from taking hold.
•
An environment of poor employer-employee
relations reduces MBO effectiveness.
•
Strategic goals may be displaced by operational
goals.
•
Mechanistic organizations and values that discourage
participation can harm the MBO process.
•
Too much paperwork saps MBO energy.
Copyright © 2009 Nelson Education Ltd.
5-16
Types of Plans
1.
2.
3.
4.
Single-Use
Standing
Contingency
Crisis Management
•
Three Stages:
•
Prevention
•
Preparation
•
Containment
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5-17
Strategic Management
•
Set of decisions and actions used to formulate
and implement strategies that will provide a
competitively superior fit between the
organization and its environment so as to
achieve organizational goals.
Copyright © 2009 Nelson Education Ltd.
5-18
Ex. 5.9
The Strategic Management Process
Porter’s Competitive Forces
1. Potential new entrants
2. Bargaining power of buyers
3. Bargaining power of suppliers
4. Threat of substitute products
5. Rivalry among competitors
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5-20
Ex. 5.11 The Five Forces Affecting
Industry Competition
Competitive Strategies
1.
Differentiation
2.
Cost Leadership
3.
Focus
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5-22
Ex. 5.14
Tools for Putting Strategy into Action
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5-23