ORGANIZATIONAL PLANNING

& GOAL SETTINGPrepared By : ZAREEN SHAIKH, SZABIST Larkana

Session-6Class-BBA.2

Goals and Plans

A blueprint specifying the resource allocation, schedules, and other actions necessary for attaining goals.

Planning is considered the most fundamental function.Planning is the most controversial management function.

Plan

GoalA desired future state that the organization attempts to

realize.

Levels of Goals/Plans

Goals and Plans Purposes

Legitimacy/Mission Statement

Describes values, aspirations, and reason for being.Focuses on, customers, corporate values, product quality, and attitude toward employees.

Source of Motivation and CommitmentFacilitate employees’ identification with the organization.

Guides to ActionProvide a sense of direction.Focus attention on specific targets.Direct efforts toward important outcomes.

What the organization stands for.

Standard of PerformanceServe as performance criteria.Provide a standard of assessment.

Peter Drucker’s Eight Content Areas in Developing Goals

Marketing. Innovation.Productivity.Physical and financial resources.Profitability.Managerial performance and development.Worker performance and attitude.Public responsibility.

Overall Planning Process

Begins With: Mission statement Strategic goals

Goals and Plans

Strategic Goals• Where the organization wants to be in the future.

• Pertain to the organization as a whole.

Strategic Plans• Action Steps.• Blueprint that defines the organizational activities and

resource allocations.

Tactical Goals and Plans

Tactical Goals

Goals that define the outcomes that major divisions and departments must achieve.

Tactical PlansPlans designed to help execute major strategic plans.

Operational Goals and Plans

Operational GoalsSpecific, measurable results expected from

departments, work groups, and individuals.

Operational PlansOrganization’s lower levels that specify action

steps toward achieving operational goals.

Planning Time Horizon

Means End-Chain

• The achievement of goals at low levels permits the attainment of high-level goals.

Characteristics ofEffective Goal Setting

Goal Characteristics

Specific and measurable.

Cover key result areas.

Challenging but realistic.

Defined time period.

Linked to rewards.

Model of the MBO ProcessStep 1: Setting Goals Step 2: Developing Action Plans

Step 3: Reviewing Progress

Corporate Strategic Goals Departmental Goals Individual Goals

Step 4: Appraising Overall Performance

Appraisal of Overall Performance

Corrective Action

Review Progress

Action Plans

MBO Benefits and Problems

Benefits of MBO Problems with MBO1. Manager and employee efforts are

focused on activities that will lead to goal attainment.

2. Performance can be improved at all company levels.

3. Employees are motivated.

4. Departmental and individual goals are aligned with company goals.

1. Constant change prevents MBO from taking hold.

2. An environment of poor employer-employee relations reduces MBO effectiveness.

3. Strategic goals may be displaced by operational goals.

4. Mechanistic organizations and values that discourage participation can harm the MBO process.

5. Too much paperwork saps MBO energy.

Plans

Single-UseStandingContingency

Crisis ManagementThree Stages

PreventionPreparationContainment

How Do Managers Plan?

• Establishing Goals– Approaches to Establishing Goals• Traditional goal setting - Overall goals established

at the top of the organization– overall goals broken down into sub goals for each level

of the organizationProblems of traditional goal setting 1. Planners out of touch on day to day basis2. No flexibility in plans 3. Less creativity and learning

Traditional Objective Setting

IndividualEmployee’sObjective

TopManagement’s

Objective

DepartmentManager’sObjective

DivisionManager’sObjective

“Increase profits, regardlessof the means”

“I want to see asignificant improvementin this division’s profits”

“We need to improvethe company’s performance”

“Don’t worry aboutquality: just work fast”

The New Planning Paradigm

Six Rules of Planning

Start with a Strong Mission

Set Stretch Goals

Create an Environment

that Encourages

Learning

Design New Roles

for Planning

Staff

Use Temporary Task Forces

Planning Still Starts and Stops at the Top

Strategic Management Questions

What changing and trends are occurring? Who are the customers? What products or services should we offer? How can we offer these products or

services efficiently?

Strategic Management Process

Identify Strategic Factors•Strengths

•Weaknesses

Scan Internal Environment

•Core Competence

•Synergy

•Value Creation

Identify

Strategic:•Corporate

•Business

•Functional

Define New:•Mission

•Goals

•Grand Strategy

Evaluate Current:•Mission

•Goals

•Strategies

Scan External Environment•National

•Global

•Opportunities

•Threats

Identify Strategic Factors

SWOT

Implementing Strategy via Changes in:•Structure

•Human resources

•Information & control systems

Tools for Putting Strategy into Action

–ANY QUESTION