PLANNING
•Overview of Goals and Plans
GOAL
• A desired future state that the organization attempts to realize.
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PLAN
• A blueprint specifying the resource allocations, schedules, and other
actions necessary for attaining goals.
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Planning
• The act of determining the organization’s goals and the means for
achieving them.
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•Purposes of Goals and Plans
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Legitimacy. An organization’s mission describes what the organization
stands for and its reason for existence. It symbolizes legitimacy to
external audiences such as investors, customers, and suppliers.
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Source of motivation and commitment. Goals and plans facilitate
employees’ identification with the organization and help motivate them
by reducing uncertainty and clarifying what they should accomplish.
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Resource allocation. Goals help managers decide where they need to
allocate resources, such as employees, money, and equipment.
Guides to action. Goals and plans provide a sense of direction. They
focus attention on specific targets and direct employee efforts toward
important outcomes.
• Rationale for decisions. Through goal setting and planning, managers
learn what the organization wants to accomplish. They can make
decisions to ensure that internal policies, roles, performance,
structure, products, and expenditures will be made in accordance with
desired outcomes.
• Standard of performance. Because goals define desired outcomes for
the organization, they serve as performance criteria. They provide a
standard of assessment.
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•Levels of Goals/ Plans and Their Importance
•Organizational Mission
MISSION
• The organization’s reason for existence.
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MISSION STATEMENT
• A broadly stated definition of the organization’s basic business scope
and operations that distinguishes it from similar types of organizations.
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•Goals and Plans
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.
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STRATEGIC PLANS
• The action steps by which an organization intends to attain strategic
goals.
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TACTICAL GOALS
• Goals that define the outcomes that major divisions and departments
must achieve for the organization to reach its overall goals.
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TACTICAL PLANS
• Plans designed to help execute major strategic plans and to
accomplish a specific part of the company’s strategy.
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OPERATIONAL GOALS
• Specific, measurable results expected from departments, work groups,
and individuals within the organization.
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OPERATIONAL PLANS
• Plans developed at the organization’s lower levels that specify action
steps toward achieving operational goals and that support tactical
planning activities.
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•Criteria for Effective Goals
• Specific
& Measurable (SMART)
• Covered Key Result Areas
• Challenging But Realistic
• Defined Time Period
• Linked To Rewards
•Planning Types
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Managers use strategic, tactical, and operational goals to direct
employees and resources toward achieving specific outcomes that
enable the organization to perform efficiently and effectively.
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Managers use a number of planning approaches. Among the most
popular are management by objectives (MBO), single-use plans,
standing plans, and contingency plans.
•Management By Objectives (MBO)
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A method of management whereby managers and employees define
goals for every department, project, and person and use them to
monitor subsequent performance.
•MBO Benefits and Problems
SINGLE-USE PLANS
• Plans developed to achieve a set of goals unlikely to be repeated in the
future.
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STANDING PLANS
• Ongoing plans used to provide guidance for tasks performed
repeatedly within the organization.
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CONTINGENCY PLANS
• Plans that define company responses to specific situations, such as
emergencies, setbacks, or unexpected conditions.
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To develop contingency plans, managers identify important factors in
the environment, such as possible economic downturns, declining
markets, increases in cost of supplies, new technological
developments, or safety accidents. Managers then forecast a range of
alternative responses to the most likely high-impact contingencies,
focusing on the worst case.
•The Strategic Management Process
Strategy formulation
• May include assessing the external environment and internal problems
and integrating the results into goals and strategy.
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Strategy implementation
• The use of managerial and organizational tools to direct resources
toward accomplishing strategic results.
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Strategic management
• The 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.
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•The Strategic Management Process
SITUATION ANALYSIS
• Typically includes a search for strengths, weaknesses, opportunities,
and threats (SWOT) that affect organizational performance.
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•Checklist for Analyzing Organizational Strengths and Weakness
•Formulating Business-Level Strategy-p-186
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The Five Forces Affecting Industry Competition
•Organizational Characteristics of Porter’s Competitive Strategies
DIFFERENTIATION
• An attempt to distinguish the firm’s products or services from others in
the industry.
• The organization may use advertising, distinctive product features,
exceptional service, or new technology to achieve a product perceived
as unique.
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COST LEADERSHIP STRATEGY
• Aggressively seeking efficient facilities, pursues cost reductions, and
uses tight cost controls to produce products more efficiently than
competitors.
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FOCUS STRATEGY
• Concentrating on a specific regional market or buyer group. The
company will use a differentiation or lowcost approach, but only for a
narrow target market.
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A Continuum of Partnership Strategies
•Tools for Putting Strategy into Action