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UBMM1013 MANAGEMENT PRINCIPLES
Topic 4 Managerial Planning and Goal Setting
0
Learning Objectives •Define goals and plans and explain the relationship between them. •Explain the concept of organizational vision and mission and how it influences goal setting and planning. •Describe the types of goals an organization should have and how managers use strategy maps to align goals. •Define the characteristics of effective goals. •Describe the four essential steps in the management by objectives (MBO) process. •Explain the difference between single-use plans and standing plans. •Describe and explain the importance of contingency planning, scenario building, and crisis planning in today’s environment. •Summarize the guidelines for high-performance planning in a fast-changing environment.
Overview of Goals and Plans Goals
Plans
Planning
Overview of Goals and Plans •A blueprint specifying the resource allocations, schedules, and other actions necessary for attaining goals
•A
desired future state that the organization attempts to realize
•determining
the organization’s goals and the means for achieving them
Levels of Goals and Plans •Strategic Goals/Plans •Mission •Operational Goals/Plans •Tactical Goals/Plans •Vision
Levels of Goals and Plans •What our organization to be? •Why
does the organization exist?
Levels of Goals and Plans •What our organization to be? •Why
does the organization exist?
Vision and mission of Ford •Become
the main company of the world products and services of the car. •We
are a global, diverse family with a proud inheritance, providing exceptional products and services.
Vision VS Mission Vision? Defines and describes the future situation that a company wishes to have The vision of the company is the response to the question of: What our organization to be? Example: Vision of Ford – Become the main company of the world products and services of the car.
Vision VS Mission Mission? It defines the basic purpose of the organisation especially for external audiences It describes what the organisation stand for and its reason for existence Broadly states the basic business scope and operations that distinguishes it from similar types of organizations May include the market and customers Some may describe company values, product quality, attitudes toward employees The mission of the company is the answer of the question: Why does the organization exist? Example: Mission of Ford – We are a global, diverse family with a proud inheritance, providing exceptional products and services
Levels of Goals and Plans Lower Management (Departments, work groups, individuals) ? Middle Management (Major divisions, functions) ? Senior Management (organisation as a whole ?
0
Strategic Goals and Plans Strategic Goals
Apply to senior management Where the organization wants to be in the future Often called official goals because they are the stated intentions of what the organisation wants to achieve Pertain to the organization as a whole
Strategic Plans
Action Steps used to attain strategic goals
Blueprint that defines the organizational activities and resource allocations
Tends to be long term and may define organisational action steps from two to five years in the future
The purpose of strategic plans is to turn organisational goals into realities within that period
Tactical Goals and Plans
0
Tactical Goals
Apply to middle management Goals that define the outcomes that major divisions intend achieve Describe what major subunits must do for the organisation to achieve its overall goals
Tactical Plans
Plans designed to achieve tactical goals Plans designed to help execute major strategic plans Shorter than time frame than strategic plans
Operational Goals and Plans
Operational Goals
Apply to lower management Goals that define the results that expected from departments, work groups and individuals They are precise and measurable
0
Operational Goals and Plans
0
Operational Plans
Developed at the lower levels of the organisation to specify action steps toward achieving operational goals and to support tactical plans It is the department manager’s tool for daily and weekly operations Goals are stated in quantitative terms and the department plan describes how goals will be achieved Operational planning specifies plans for department managers, supervisors and individuals employees Schedules are an important component of operational planning Schedules define precise time frames for the completion of each operational goal required for the organisation’s tactical and strategic goals Operational planning also must be coordinated with the budget because resources must be allocated for desired activities
Purpose of Goals and Plans ???? Message Legitimacy for investors, customers, suppliers, community
???? Message Legitimacy, motivation, guides, rationale, standards
0
Purpose of Goals and Plans Legitimacy Source of motivation and commitment Resource allocation Guides to action Rationale for decisions Standard of performance
Purpose of Goals and Plans Legitimacy
An organization’s mission describes what the organisation stands for and its reason for existence. It symbolizes legitimacy to external audiences such as investor, customers, suppliers and the local community. The mission helps them look on the company in a favorable light. A strong goals and plans also have an impact on employees, enabling them to become committed to the organization because they identify with its overall purpose and reason for existence. They also know what actions to undertake to achieve the goal.
Purpose of Goals and Plans Source of motivation and commitment Goals and plans enhance employees’ motivation and commitment by reducing uncertainty and clarifying what they should accomplish. Lack of a clear goal can hamper motivation because people don’t understand what they’re working toward. Whereas a goal provides the “why” of an organisation or subunit’s existence, a plan tells the “how”. A plan lets employees know what actions to undertake to achieve the goal.
Purpose of Goals and Plans Resource allocation Goals and plans help managers decide where they need to allocate resources such as employees, money and equipment. Managers know they need to use resources in alignment with the goals and plans.
Purpose of Goals and Plans Guides to action Goals and plans provide a sense of direction. They focus attention on specific targets and direct employee efforts toward important outcomes.
Purpose of Goals and Plans Rationale for decisions Through goals and plans, managers clarify what the organization is trying to accomplish. They can make decisions to ensure that internal policies, roles, performance, structure, products and expenditures will be made in accordance with desired outcomes. Decisions throughout the organisation will be in alignment with the goals and plans.
Purpose of Goals and Plans Standards of performance Goals define desired outcomes for the organization and the plan lets employees know what actions to undertake to achieve the goal. Hence, they can serve as performance criteria. They provide a standard of assessment.
Operational Planning
Criteria for effective goals
Management by Objectives (MBO)
Single-use and Standing Plans
Effective Goals Criteria •Specific and Measurable •Cover Key Result Areas •Challenging but realistic •Defined Time Period •Linked to Rewards
Effective Goals
Criteria for Effective Goals
0
Specific and Measurable -
When possible, operational goals should be expressed in quantitative terms Vague goals tend not to motivate employees.
Cover Key Result Areas -
Key result areas are those items that contribute most to company performance and competitive Goals cannot be set for every aspect of employee behavior or organisational performance
Challenging but Realistic -
Goals Should be challenging but not unreasonably difficult When goals are unrealistic, they set employees up for failure and lead to decreasing employee morale. If goals are too easy, employees may not feel motivated. Stretch goals are extremely ambitious but realistic goals that challenge employees to meet high standards.
0
Criteria for Effective Goals Defined Time Period - Goals should specify the time period over which they will be achieved. - A time period is a deadline on which goal attainment will be measured. Linked to Rewards - The impact of goals depends on the extent to which salary increases, promotions, and other rewards are based on goal achievement. - People who attain goals should be rewarded.
Management by Objectives (MBO)
Management by Objectives (MBO) is a method whereby managers and employees define objectives for every department, project, and person and use them to monitor subsequent performance. Four major activities must occur in order for MBO to be successful.
Model of the MBO Process Step 1: Set Goals Corporate Strategic Goals Departmental goals Individual goals
0
Step 2: Develop Action Plans Action Plans
Review Progress Step 3: Review Progress Appraise Performance Step 4: Appraise Overall Performance
Take Corrective Action
Management by Objectives (MBO) Set goals
The first step is setting goals. The setting of goals involves employees at all levels and looks beyond dayto-day activities to answer the question “what are we trying to accomplish?” Managers heed the criteria of effective goals and make sure to assign responsibility for goal accomplishment. However, goals should be jointly derived. Mutual agreement between employee and supervisor creates the strongest commitment to achieving goals. In the case of teams, all team members may participate in setting goals.
Management by Objectives (MBO) Develop action plans The second step is developing action plans. These action plans will specify how the goals are to be achieved. An action plan defines the course of action needed to achieve the stated goals. Action plans are made for both individuals and departments.
Management by Objectives (MBO) Review progress Next, a periodic progress review is important to ensure that the action plans are working. These reviews can occur informally between managers and subordinates, where the organization may wish to conduct three-, six- or nine-month reviews during the year. The periodic checkup allows managers and employees to see whether they are on target or whether corrective action is needed. Managers and employees should not be locked into predefined behavior and must be willing to take whatever steps are necessary to produce meaningful results. The point of MBO is to achieve goals. The action plan can be changed whenever goals are not being met.
Management by Objectives (MBO) Appraisal overall performance
The last step is to carefully evaluate whether annual goals have been achieved for both individuals and departments. Success or failure to achieve goals can become part of the performance appraisal system and the designation of salary increases and other rewards. The appraisal of departmental and overall corporate performance shapes goals for the next year. The MBO cycle repeats itself on an annual basis.
MBO Benefits and Problems 0
Benefits of MBO
Manager and employee efforts are focused on activities that will lead to goal attainment Performance can be improved at all company levels Employees are motivated Departmental and individual goals are aligned with company goals
Problems with MBO
Constant change prevents MBO from taking hold An environment of poor employer-employee relations reduces MBO effectiveness Strategic goals may be displaced by operational goals Mechanistic organizations and values that discourage participation can harm the MBO process Too much paperwork saps MBO energy
Single Use and Standing Plans
0
Single‑use plans Single-use plans are developed to achieve objectives that are not likely to be repeated in the future. Single‑use plans include both programs and projects. Standing plans Standing plans are used to provide guidance for tasks performed repeatedly within the organization. The primary standing plans are organizational policies, rules, and procedures. Many companies are discovering a need to develop standing plans regarding the use of email.
Planning for a Turbulent Environment
Contingency Plans
Building Scenario
Crisis Planning
Contingency Plans
Contingency plans, often referred to as scenarios, define company responses to be taken in case of emergencies or setbacks.
It cover such situations as catastrophic decreases in sales or prices, and loss of important managers.
Building Scenario
0
Looking at trends and discontinuities and imagining possible alternative futures to build a framework within which unexpected future events can be managed Forces managers to rehearse mentally what they would do if their best-laid plans were to collapse
Crisis Planning
Some firms also engage in crisis planning to enable them to cope with unexpected events that are so sudden and devastating that they have the potential to destroy the organisation if managers are not prepared with a quick and appropriate response Crisis planning reduces the incidence of trouble, much like putting a good lock on a door reduces burglaries
0
Crisis Planning
The two essential stage of crisis planning include prevention and preparation
Prevention Build relationships Detect signals from environment Preparation Designate crisis management team and spokesperson Create detailed crisis management plan
Set up effective communications system
0
Planning for High Performance
Traditional Approaches to Planning
High-Performance Approaches to Planning
Traditional Approaches to Planning Done by top executives (top down) Central planning departments
• Group of planning specialists who report directly to CEO or President •Planning specialist were hired to gather data and develop detailed strategic plans for the corporations as whole • Top Down method of planning
High Performance Approaches to Planning
Decentralized planning •planning experts work with managers in major divisions or departments to develop their own goals and plans Managers plan throughout the organization Now involves line-managers and employees
Dynamic plans for fast-changing needs
High Performance Approaches to Planning
Set Stretch Goals for Excellence
Use Performance Dashboards
Deploy Intelligence Teams
0
Performance Dashboard for Planning
Gauge progress toward goals
Align and track goals
All employees can track progress
0
Thank you
Topic 4 Managerial Planning and Goal Setting
0
Learning Objectives •Define goals and plans and explain the relationship between them. •Explain the concept of organizational vision and mission and how it influences goal setting and planning. •Describe the types of goals an organization should have and how managers use strategy maps to align goals. •Define the characteristics of effective goals. •Describe the four essential steps in the management by objectives (MBO) process. •Explain the difference between single-use plans and standing plans. •Describe and explain the importance of contingency planning, scenario building, and crisis planning in today’s environment. •Summarize the guidelines for high-performance planning in a fast-changing environment.
Overview of Goals and Plans Goals
Plans
Planning
Overview of Goals and Plans •A blueprint specifying the resource allocations, schedules, and other actions necessary for attaining goals
•A
desired future state that the organization attempts to realize
•determining
the organization’s goals and the means for achieving them
Levels of Goals and Plans •Strategic Goals/Plans •Mission •Operational Goals/Plans •Tactical Goals/Plans •Vision
Levels of Goals and Plans •What our organization to be? •Why
does the organization exist?
Levels of Goals and Plans •What our organization to be? •Why
does the organization exist?
Vision and mission of Ford •Become
the main company of the world products and services of the car. •We
are a global, diverse family with a proud inheritance, providing exceptional products and services.
Vision VS Mission Vision? Defines and describes the future situation that a company wishes to have The vision of the company is the response to the question of: What our organization to be? Example: Vision of Ford – Become the main company of the world products and services of the car.
Vision VS Mission Mission? It defines the basic purpose of the organisation especially for external audiences It describes what the organisation stand for and its reason for existence Broadly states the basic business scope and operations that distinguishes it from similar types of organizations May include the market and customers Some may describe company values, product quality, attitudes toward employees The mission of the company is the answer of the question: Why does the organization exist? Example: Mission of Ford – We are a global, diverse family with a proud inheritance, providing exceptional products and services
Levels of Goals and Plans Lower Management (Departments, work groups, individuals) ? Middle Management (Major divisions, functions) ? Senior Management (organisation as a whole ?
0
Strategic Goals and Plans Strategic Goals
Apply to senior management Where the organization wants to be in the future Often called official goals because they are the stated intentions of what the organisation wants to achieve Pertain to the organization as a whole
Strategic Plans
Action Steps used to attain strategic goals
Blueprint that defines the organizational activities and resource allocations
Tends to be long term and may define organisational action steps from two to five years in the future
The purpose of strategic plans is to turn organisational goals into realities within that period
Tactical Goals and Plans
0
Tactical Goals
Apply to middle management Goals that define the outcomes that major divisions intend achieve Describe what major subunits must do for the organisation to achieve its overall goals
Tactical Plans
Plans designed to achieve tactical goals Plans designed to help execute major strategic plans Shorter than time frame than strategic plans
Operational Goals and Plans
Operational Goals
Apply to lower management Goals that define the results that expected from departments, work groups and individuals They are precise and measurable
0
Operational Goals and Plans
0
Operational Plans
Developed at the lower levels of the organisation to specify action steps toward achieving operational goals and to support tactical plans It is the department manager’s tool for daily and weekly operations Goals are stated in quantitative terms and the department plan describes how goals will be achieved Operational planning specifies plans for department managers, supervisors and individuals employees Schedules are an important component of operational planning Schedules define precise time frames for the completion of each operational goal required for the organisation’s tactical and strategic goals Operational planning also must be coordinated with the budget because resources must be allocated for desired activities
Purpose of Goals and Plans ???? Message Legitimacy for investors, customers, suppliers, community
???? Message Legitimacy, motivation, guides, rationale, standards
0
Purpose of Goals and Plans Legitimacy Source of motivation and commitment Resource allocation Guides to action Rationale for decisions Standard of performance
Purpose of Goals and Plans Legitimacy
An organization’s mission describes what the organisation stands for and its reason for existence. It symbolizes legitimacy to external audiences such as investor, customers, suppliers and the local community. The mission helps them look on the company in a favorable light. A strong goals and plans also have an impact on employees, enabling them to become committed to the organization because they identify with its overall purpose and reason for existence. They also know what actions to undertake to achieve the goal.
Purpose of Goals and Plans Source of motivation and commitment Goals and plans enhance employees’ motivation and commitment by reducing uncertainty and clarifying what they should accomplish. Lack of a clear goal can hamper motivation because people don’t understand what they’re working toward. Whereas a goal provides the “why” of an organisation or subunit’s existence, a plan tells the “how”. A plan lets employees know what actions to undertake to achieve the goal.
Purpose of Goals and Plans Resource allocation Goals and plans help managers decide where they need to allocate resources such as employees, money and equipment. Managers know they need to use resources in alignment with the goals and plans.
Purpose of Goals and Plans Guides to action Goals and plans provide a sense of direction. They focus attention on specific targets and direct employee efforts toward important outcomes.
Purpose of Goals and Plans Rationale for decisions Through goals and plans, managers clarify what the organization is trying to accomplish. They can make decisions to ensure that internal policies, roles, performance, structure, products and expenditures will be made in accordance with desired outcomes. Decisions throughout the organisation will be in alignment with the goals and plans.
Purpose of Goals and Plans Standards of performance Goals define desired outcomes for the organization and the plan lets employees know what actions to undertake to achieve the goal. Hence, they can serve as performance criteria. They provide a standard of assessment.
Operational Planning
Criteria for effective goals
Management by Objectives (MBO)
Single-use and Standing Plans
Effective Goals Criteria •Specific and Measurable •Cover Key Result Areas •Challenging but realistic •Defined Time Period •Linked to Rewards
Effective Goals
Criteria for Effective Goals
0
Specific and Measurable -
When possible, operational goals should be expressed in quantitative terms Vague goals tend not to motivate employees.
Cover Key Result Areas -
Key result areas are those items that contribute most to company performance and competitive Goals cannot be set for every aspect of employee behavior or organisational performance
Challenging but Realistic -
Goals Should be challenging but not unreasonably difficult When goals are unrealistic, they set employees up for failure and lead to decreasing employee morale. If goals are too easy, employees may not feel motivated. Stretch goals are extremely ambitious but realistic goals that challenge employees to meet high standards.
0
Criteria for Effective Goals Defined Time Period - Goals should specify the time period over which they will be achieved. - A time period is a deadline on which goal attainment will be measured. Linked to Rewards - The impact of goals depends on the extent to which salary increases, promotions, and other rewards are based on goal achievement. - People who attain goals should be rewarded.
Management by Objectives (MBO)
Management by Objectives (MBO) is a method whereby managers and employees define objectives for every department, project, and person and use them to monitor subsequent performance. Four major activities must occur in order for MBO to be successful.
Model of the MBO Process Step 1: Set Goals Corporate Strategic Goals Departmental goals Individual goals
0
Step 2: Develop Action Plans Action Plans
Review Progress Step 3: Review Progress Appraise Performance Step 4: Appraise Overall Performance
Take Corrective Action
Management by Objectives (MBO) Set goals
The first step is setting goals. The setting of goals involves employees at all levels and looks beyond dayto-day activities to answer the question “what are we trying to accomplish?” Managers heed the criteria of effective goals and make sure to assign responsibility for goal accomplishment. However, goals should be jointly derived. Mutual agreement between employee and supervisor creates the strongest commitment to achieving goals. In the case of teams, all team members may participate in setting goals.
Management by Objectives (MBO) Develop action plans The second step is developing action plans. These action plans will specify how the goals are to be achieved. An action plan defines the course of action needed to achieve the stated goals. Action plans are made for both individuals and departments.
Management by Objectives (MBO) Review progress Next, a periodic progress review is important to ensure that the action plans are working. These reviews can occur informally between managers and subordinates, where the organization may wish to conduct three-, six- or nine-month reviews during the year. The periodic checkup allows managers and employees to see whether they are on target or whether corrective action is needed. Managers and employees should not be locked into predefined behavior and must be willing to take whatever steps are necessary to produce meaningful results. The point of MBO is to achieve goals. The action plan can be changed whenever goals are not being met.
Management by Objectives (MBO) Appraisal overall performance
The last step is to carefully evaluate whether annual goals have been achieved for both individuals and departments. Success or failure to achieve goals can become part of the performance appraisal system and the designation of salary increases and other rewards. The appraisal of departmental and overall corporate performance shapes goals for the next year. The MBO cycle repeats itself on an annual basis.
MBO Benefits and Problems 0
Benefits of MBO
Manager and employee efforts are focused on activities that will lead to goal attainment Performance can be improved at all company levels Employees are motivated Departmental and individual goals are aligned with company goals
Problems with MBO
Constant change prevents MBO from taking hold An environment of poor employer-employee relations reduces MBO effectiveness Strategic goals may be displaced by operational goals Mechanistic organizations and values that discourage participation can harm the MBO process Too much paperwork saps MBO energy
Single Use and Standing Plans
0
Single‑use plans Single-use plans are developed to achieve objectives that are not likely to be repeated in the future. Single‑use plans include both programs and projects. Standing plans Standing plans are used to provide guidance for tasks performed repeatedly within the organization. The primary standing plans are organizational policies, rules, and procedures. Many companies are discovering a need to develop standing plans regarding the use of email.
Planning for a Turbulent Environment
Contingency Plans
Building Scenario
Crisis Planning
Contingency Plans
Contingency plans, often referred to as scenarios, define company responses to be taken in case of emergencies or setbacks.
It cover such situations as catastrophic decreases in sales or prices, and loss of important managers.
Building Scenario
0
Looking at trends and discontinuities and imagining possible alternative futures to build a framework within which unexpected future events can be managed Forces managers to rehearse mentally what they would do if their best-laid plans were to collapse
Crisis Planning
Some firms also engage in crisis planning to enable them to cope with unexpected events that are so sudden and devastating that they have the potential to destroy the organisation if managers are not prepared with a quick and appropriate response Crisis planning reduces the incidence of trouble, much like putting a good lock on a door reduces burglaries
0
Crisis Planning
The two essential stage of crisis planning include prevention and preparation
Prevention Build relationships Detect signals from environment Preparation Designate crisis management team and spokesperson Create detailed crisis management plan
Set up effective communications system
0
Planning for High Performance
Traditional Approaches to Planning
High-Performance Approaches to Planning
Traditional Approaches to Planning Done by top executives (top down) Central planning departments
• Group of planning specialists who report directly to CEO or President •Planning specialist were hired to gather data and develop detailed strategic plans for the corporations as whole • Top Down method of planning
High Performance Approaches to Planning
Decentralized planning •planning experts work with managers in major divisions or departments to develop their own goals and plans Managers plan throughout the organization Now involves line-managers and employees
Dynamic plans for fast-changing needs
High Performance Approaches to Planning
Set Stretch Goals for Excellence
Use Performance Dashboards
Deploy Intelligence Teams
0
Performance Dashboard for Planning
Gauge progress toward goals
Align and track goals
All employees can track progress
0
Thank you
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