Organizational
Planning
Chapter 6
MANAGEMENT
Meeting and Exceeding Customer Expectations
EIGHTH EDITION
Prepared by
Deborah Baker
Texas Christian University
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved
1
learning objectives
1. Explain the importance of planning
2. Describe the importance of an organization’s
mission statement
3. Discuss the purposes of strategic, tactical,
operational, and contingency plans
4. Explain the relationships between strategic,
tactical, and operational goals
5. List and explain the steps in a basic planning
Chapter 6
process
6. Discuss various ways to make plans effective
7. Describe the barriers to planning
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved
2
Planning
11
Chapter 6
Planning
Planning
Preparing for tomorrow, today
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3
Planning Responsibilities
11
Construct,
Construct, review,
review, and/or
and/or rewrite
rewrite
organization’s
organization’s
mission
mission
Chapter 6
1.
1.
2.
2.
Identify
Identify and
and analyze
analyze their
their opportunities
opportunities
3.
3.
Establish
Establish the
the goals
goals they
they wish
wish to
to achieve
achieve
4.
4.
Identify,
Identify, analyze,
analyze, and
and select
select the
the course(s)
course(s)
of
of action
action required
required to
to reach
reach goals
goals
5.
5.
Determine
Determine resourced
resourced needed
needed to
to achieve
achieve
goals
goals
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4
22
Mission Statement
Chapter 6
Mission
Mission
Statement
Statement
When a mission is formalized in
writing and communicated to all
organizational members
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5
22
Mission Statement
Includes references to core values and principles
Serves as an operational and ethical guide
Serves as the foundation and coordinating
Chapter 6
device for the:
– execution of management functions
– behaviors of organizational members
– shaping of the organization’s culture
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6
22
Mission Statement Questions
What
Whatisisour
ourbusiness?
business?
Chapter 6
What
Whatshould
shouldititbe?
be?
From Peter Drucker
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7
22
Rules for Mission Statements
Rule
Rule#1:
#1: Keep
Keepthe
thestatement
statementsimple;
simple;not
notnecessarily
necessarilyshort,
short,but
but
simple.
simple.
Rule
Rule#2:
#2: Allow
Allowcompanywide
companywideinput.
input.
Rule
Rule#3:
#3: Involve
Involveoutsiders.
outsiders. They
Theycan
canbring
bringclarity
clarityand
andaafresh
fresh
perspective
perspectiveto
tothe
thestatement-writing
statement-writingprocess.
process.
Rule
Rule#4:
#4: Develop
Developthe
thewording
wordingand
andthe
thetone
toneto
toreflect
reflectthe
the
company’s
company’spersonality
personalityor
orwhat
whatthe
thecompany
companywould
wouldlike
liketo
tobe.
be.
Chapter 6
Rule
Rule#5:
#5: Share
Sharethe
themission
missionstatement
statementin
inas
asmany
manycreative
creativeways
ways
as
aspossible
possibleand
andin
inas
asmany
manylanguages
languagesas
asnecessary.
necessary. Keep
Keepititin
in
front
frontof
ofpeople
peopleconstantly.
constantly.
Rule
Rule#6:
#6: Rely
Relyon
onthe
themission
missionstatement
statementfor
forguidance.
guidance. Challenge
Challenge
ititcontinually,
continually,and
andjudge
judgeemployees
employeesby
byhow
howwell
wellthey
theyadhere
adhereto
to
its
itstenets.
tenets. Management
Managementmust
mustsay
sayititand
andlive
liveit.
it.
Source: From Say it and Live It by Patricia Jones and Larry Kahaner. Copyright © 1995 by Kane Associates International, Inc.
Used by permission of Doubleday, a division of Bantam Doubleday Dell Publishing Group, Inc.
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8
Chapter 6
22
Effective Goals and Objectives
Characteristic
Characteristic
Specific
Specificand
andmeasurable
measurable
Explanation
Explanation
Not
Notall
allobjectives
objectivescan
can expressed
expressedin
innumeric
numeric
terms,
terms,but
butthey
theyshould
shouldbe
bequantified
quantifiedwhen
when
possible.
possible.
Realistic
Realisticand
andchallenging
challenging
Impossibly
Impossiblydifficult
difficultobjectives
objectivesdemotivate
demotivate
people.
people. Objectives
Objectivesshould
shouldbe
bechallenging
challenging
but
butattainable.
attainable.
Focused
Focusedon
onkey
keyresult
resultareas
areas
Goals
Goalsshould
shouldfocus
focuson
onkey
keyresults--sales,
results--sales,
profits,
profits,production,
production,or
orquality.
quality.
Cover
Coveraaspecific
specificperiod
period
AAmeasurable
measurableobjective
objectiveisisstated
statedin
interms
termsof
of
the
time
in
which
it
is
to
be
completed.
Shortthe time in which it is to be completed. Shortterm
termgoals
goalsshould
shouldcomplement
complementlong-term
long-term
goals.
goals.
Reward
Rewardperformance
performance
Objectives
Objectivesare
aremeaningless
meaninglessififthey
theyare
arenot
not
directly
directlyrelated
relatedto
torewards
rewardsfor
forperformance.
performance.
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9
Plans
22
Plan
Plan
The end result of the planning
effort—
Chapter 6
Commits individuals,
departments, entire
organizations, and the resources
of each to specific courses of
action for days, months, and
years into the future
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10
Plans
Chapter 6
22
What
What
identifies
identifies the
the specific
specific goals
goals to
to be
be
accomplished
accomplished
When
When
answers
answers aa question
question of
of timing
timing
Where
Where
concerns
concerns the
the place(s)
place(s) where
where the
the plan
plan will
will
be
be executed
executed
Who
Who
identifies
identifies specific
specific people
people who
who will
will
perform
perform tasks
tasks essential
essential to
to the
the plan
plan
How
How
involves
involves the
the specific
specific actions
actions to
to be
be taken
taken
to
to reach
reach the
the goals
goals
is
is concerned
concerned with
with the
the expenditure
expenditure of
of
How
much
How much resources needed to reach the goals
resources needed to reach the goals
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22
Stretch Goals
Chapter 6
Stretch
StretchGoals
Goals
The end result of the planning
goals that require great leaps
forward
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22
Strategies and Tactics
Strategy
Strategy
Chapter 6
Tactic
Tactic
A course of action created to
achieve a long-term goal
A course of action created to
achieve a short-term goal
—an objective
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22
Determining Resource
Requirements
People
People
Technology
Technology
Money
Money
Information
Information
Chapter 6
Supplies
Supplies
Facilities
Facilities
Equipment
Equipment
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33
Types of Plans
Chapter 6
Mission
Mission
Strategic
Strategic
Plans
Plans
Strategic
Strategic
Goals
Goals
Tactical
Tactical
Plans
Plans
Tactical
Tactical
Objectives
Objectives
Operational
Operational
Plans
Plans
Operational
Operational
Objectives
Objectives
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33
Strategic Plans and Goals
Strategic
Strategic
Plans
Plans
Chapter 6
Strategic
Strategic
Goals
Goals
Contains the answers to who,
what, when, where, how, and
how much for achieving
strategic goals
Long-term, companywide goals
set by top-management strategic
planning efforts. Focus on the
changes desired in productivity,
product innovation, and
responsibilities to stakeholders
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33
An Organization’s Mission and Level
of Goals
Mission
Mission
CEO
CEOand
and
Board
Boardof
ofDirectors
Directors
Strategic
StrategicGoals
Goals
Top-Level
Top-Level
Management
Management
Chapter 6
Tactical
TacticalObjectives
Objectives
Middle-Level
Middle-Level
Management
Management
Operational
OperationalObjectives
Objectives
First-Line
First-Line
Management
Management
Operational
OperationalObjectives
Objectives
First-Line
First-Line
Management
Management
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33
Tactical Plans and Objectives
Tactical
Tactical
Plan
Plan
Developed by middle managers,
this plan has more details,
shorter time frames, and
narrower scopes than a strategic
plan
Usually spans one year or less
Chapter 6
Tactical
Tactical
Objectives
Objectives
Short-term goals set by middle
managers that must be achieved
in order to reach top
management's strategic goals
and the short- and long-term
goals of middle managers
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18
Operational Plans and Objectives
33
Operational
Operational
Plan
Plan
The first-line manager’s tool for
executing daily, weekly, and
monthly activities
• Single-Use Plans
• Standing Plans
Chapter 6
Operational
Operational
Objectives
Objectives
The specific results expected
from first-level managers, work
groups, and individuals
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33
Operational Plans
Single-Use Plans
Standing Plans
Programs
Policies
Procedures
Rules
Chapter 6
Budgets
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Chapter 6
44
Unified Hierarchy of Goals
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44
Contingency Plans
Chapter 6
Contingency
Contingency
Plan
Plan
An alternative goal and course
or courses of action to reach
that goal if and when
circumstances and assumptions
change so drastically as to make
an original plan unusable
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22
Basic Planning Process
Chapter 6
55
Step
Step 11
Setting
Setting Objectives
Objectives
Step
Step 22
Analyzing
Analyzing and
and Evaluating
Evaluating the
the Environments
Environments
Step
Step 33
Identifying
Identifying the
the Alternatives
Alternatives
Step
Step 44
Evaluating
Evaluating the
the Alternatives
Alternatives
Step
Step 55
Selecting
Selecting the
the Best
Best Solution
Solution
Step
Step 66
Implementing
Implementing the
the Plan
Plan
Step
Step 77
Controlling
Controlling and
and Evaluating
Evaluating the
the Results
Results
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55
Analyzing and Evaluating the
Environment
Internal Environment
Availability of resources
Needs of internal customers
Chapter 6
External Environment
Strengths and weaknesses of suppliers
and partners
Availability of labor and technology
Needs of external customers
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66
Making Plans Effective
Basis
Basisfor
forPlanning
Planning
Assumptions
Chapter 6
Forecasts
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