Management 12e richard draft chapter 07

Chapter 7
Managerial Planning and Goal Setting

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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

PLANNING
A plan is a blueprint for goal
achievement and specifies the
necessary resource
allocations, schedules, tasks,
and other actions
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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 using a strategy map

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7.4 A Strategy Map for
Aligning Goals

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Operational Planning



Direct employees and resources



Guide toward efficient and effective performance



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

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7.5 Characteristics of Effective
Goal Setting

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7.6 Model of the MBO Process


Defined in 1954 by Peter Drucker



Method for defining goals and monitoring
performance

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7.7 MBO Benefits

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Single-Use and Standing Plans
Single-Use Plans
Achieve one-time goals
Programs and projects

Standing Plans
Ongoing plans
Policies, rules, procedures
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Types of Single-Use and
Standing Plans


Single-Use Plans
Program: building new headquarters, converting

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

company intranet

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Types of Single-Use and
Standing Plans


Standing Plans
Policy: Sexual harassment policies, Internet and

social media policies
Rule: No eating rule in areas of company where

employees are visible to public
Procedure: Procedures for issuing refunds,

Procedures for handling employee grievances

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7.8 Major Types of Single Use
and Standing Plans

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Benefits and Limitations
of Planning
•
•
•
•
•
•
•

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
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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

discontinuities and visualize future possibilities


Crisis Planning

Unexpected events that are sudden and devastating

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7.9 Essential Stages of
Crisis Planning

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Set Stretch Goals for
Excellence


Stretch goals are highly ambitious



Clear, compelling, and imaginative



Require innovation



Goals must be seen as achievable



Like Big Hairy Audacious Goal (BHAG) from 1996
article on “Building Your Company’s Vision”



As times move faster and become more
turbulent, these are important

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Use Performance Dashboards


Dashboards
keep track of key performance metrics
align and track goals
can be applied throughout the company on

the factory or sales floor.
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7-10 A Performance
Dashboard for Planning

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Deploy Intelligence Teams


Intelligence teams
cross-functional group of managers
work together
gain a deep understanding of a specific

competitive issue
offer insight and recommendations for

planning

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