Chapter 7Managerial Planning and Goal Setting

Planning is Fundamental

• All of the other management functions stem from planning

• How do you plan for an undefined future?

• No plan is perfect

– Without plans and goals, organizations flounder

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Goals and Plans

A goal is a desired future state that the organization attempts to realize

A plan is a blueprint for goal achievement and specifies the necessary resource allocations,

schedules, tasks, and other actions

A plan is a blueprint for goal achievement and specifies the necessary resource allocations,

schedules, tasks, and other actions

PLANNING

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7.1 Levels of Goals and Plans

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7.2 The Organizational Planning Process

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Goal Setting in Organizations

• Organizational Mission – the organization’s reason for existence

• Strategic goals – official goals, broad statements describing the organization’s future

• Strategic plans – define the action steps the company will take

• Goals should be aligned

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7.4 A Strategy Map for Aligning Goals

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Operational Planning

• Direct employees and resources

• Guide efficient and effective performance

• Includes planning approaches:– Management by Objectives (MBO)– Single-Use Plans– Standing Plans

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7.5 Criteria for Effective Goal Setting

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7.6 Model of the MBO Process

• Defined in 1954 by Peter Drucker• Method for defining and monitoring goals

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7.7 MBO Benefits

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Single-Use and Standing Plans

Single-Use Plans– Achieve one-time goal– Programs and Projects

Standing Plans– Ongoing plans– Policies, rules, procedures

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• Single-Use Plans– Program: building new headquarters, converting

paper files to digital– Project: renovating the office, setting up a new

company intranet

• Standing Plans– Policy– Rule– Procedure

Types of Single-Use and Standing Plans

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• Goals and plans provide a source of motivation and commitment

• Goals and plans guide resource allocation• Goals and plans are a guide to action• Goals and plans set a standard of performance• Goals and plans can create a false sense of certainty• Goals and plans may cause rigidity in a turbulent

environment• Goals and plans can get in the way of intuition and

creativity

Benefits and Limitations of Planning

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Planning for a Turbulent Environment

• Contingency Planning – Planning for emergencies, setbacks, or unexpected

conditions

• Building Scenarios– A forecasting technique to look at current trends and

visualize future possibilities

• Crisis Planning– Sudden, devastating, unexpected events

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7.9 Essentials Stages of Crisis Planning

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• Stretch goals are highly ambitious• Clear, compelling, and imaginative• Require innovation• Goals must be seen as achievable• Like Big Hairy Audacious Goals (BHAG) from 1996

article on building your vision• As times move faster and become more

turbulent, these are important

Set Stretch Goals for Excellence

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7.10 A Performance Dashboard for Planning

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