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PLANNING. Overview of Goals and Plans. GOAL A desired future state that the organization attempts to realize . PLAN A blueprint specifying the resource allocations, schedules, and other actions necessary for attaining goals . Planning
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Overview of Goals and Plans GOAL A desired future state thatthe organization attemptsto realize. PLAN A blueprint specifying theresource allocations, schedules,and other actions necessaryfor attaining goals. Planning The act of determiningthe organization’s goalsand the means forachieving them.
Purposes of Goals and Plans Legitimacy. An organization’s mission describes what the organization stands forand its reason for existence. It symbolizes legitimacy to external audiences such asinvestors, customers, and suppliers. Source of motivation and commitment. Goals and plans facilitate employees’ identificationwith the organization and help motivate them by reducing uncertainty andclarifying what they should accomplish. Resource allocation. Goals help managers decide where they need to allocateresources, such as employees, money, and equipment.
Guides to action. Goals and plans provide a sense of direction. They focus attentionon specific targets and direct employee efforts toward important outcomes. Rationale for decisions. Through goal setting and planning, managers learn what theorganization wants to accomplish. They can make decisions to ensure that internalpolicies, roles, performance, structure, products, and expenditures will be made inaccordance 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.
Organizational Mission MISSION The organization’s reasonfor existence. MISSION STATEMENT A broadly stated definitionof the organization’s basicbusiness scope and operationsthat distinguishes itfrom similar types oforganizations.
Goals and Plans STRATEGIC GOALS Broad statements of wherethe organization wants tobe in the future; pertainingto the organization as awhole rather than tospecific divisions ordepartments. STRATEGIC PLANS The action steps by whichan organization intends toattain strategic goals.
TACTICAL GOALS Goals that define the outcomesthat major divisionsand departments mustachieve for the organizationto reach its overall goals. TACTICAL PLANS Plans designed to helpexecute major strategicplans and to accomplish aspecific part of thecompany’s strategy.
OPERATIONAL GOALS Specific, measurable resultsexpected from departments,work groups, and individualswithin the organization. OPERATIONAL PLANS Plans developed at theorganization’s lower levelsthat specify action stepstoward achieving operationalgoals and that supporttactical planningactivities.
Criteria for Effective Goals Specific & Measurable (SMART) Covered Key Result Areas Challenging But Realistic Defined Time Period Linked To Rewards
Planning Types Managers use strategic, tactical, and operational goals to direct employees andresources toward achieving specific outcomes that enable the organization to performefficiently and effectively. Managers use a number of planning approaches. Among themost popular are management by objectives (MBO), single-use plans, standing plans,and contingency plans.
Management ByObjectives (MBO) A method of managementwhereby managers andemployees define goals forevery department, project,and person and use themto monitor subsequentperformance.
SINGLE-USE PLANS Plans developed to achievea set of goals unlikely to berepeated in the future. STANDING PLANS Ongoing plans used to provideguidance for tasksperformed repeatedlywithin the organization.
CONTINGENCY PLANS Plans that define companyresponses to specific situations,such as emergencies,setbacks, or unexpectedconditions. To develop contingencyplans, managers identify important factors in the environment, such as possible economicdownturns, declining markets, increases in cost of supplies, new technologicaldevelopments, or safety accidents. Managers then forecast a range of alternativeresponses to the most likely high-impact contingencies, focusing on the worst case.
The Strategic Management Process Strategyformulation May include assessing theexternal environment andinternal problems and integratingthe results intogoals and strategy. Strategyimplementation The use of managerial andorganizational toolsto direct resourcestoward accomplishingstrategic results.
Strategicmanagement The set of decisions andactions used to formulateand implement strategies thatwill provide a competitivelysuperior fit between theorganization and its environmentso as to achieve organizationalgoals.
SITUATION ANALYSIS Typically includes a searchfor strengths, weaknesses,opportunities, and threats(SWOT) that affect organizationalperformance.
Formulating Business-Level Strategy-p-186 The Five ForcesAffecting IndustryCompetition
OrganizationalCharacteristics ofPorter’s CompetitiveStrategies
DIFFERENTIATION An attempt to distinguish thefirm’s products or servicesfrom others in the industry. The organization may useadvertising, distinctive productfeatures, exceptionalservice, or new technologyto achieve a product perceivedas unique.
COST LEADERSHIPSTRATEGY Aggressively seeking efficientfacilities, pursues costreductions, and uses tightcost controls to produceproducts more efficientlythan competitors.
FOCUS STRATEGY Concentrating on a specificregional market or buyergroup. The company willuse a differentiation or lowcostapproach, but only fora narrow target market.
