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Objectives:
Define goals and plans and explain the relationship between them. Explain the concept of organizational mission and how it influences goal setting and planning. Describe the types of goals an organization should have and why they resemble a hierarchy. Define the characteristics of effective goals Describe the four essential steps in the MBO process. Explain the difference between single-use plans and singlestanding plans. Describe and explain the importance of the three stages of crisis management planning. Discuss how planning in the new workplace differs from traditional approaches to planning.
Goal
Plan
a blueprint specifying the resource allocations, schedules, and other actions necessary for attaining goals.
Mission Stateme nt
Legitimacy. An organization mission describes what the organization stands for and its reason for existence. It symbolizes legitimacy to external audiences such as investors, suppliers, and customers. Source of motivation and commitment. Goals and plans facilitate employees identification with the organization and help motivate them by reducing uncertainty and clarifying what they should accomplish.
Goal provides the why of an organization or subunits existence, a plan tells the how. how.
Guides to action. Goals and plans provide a sense of direction. They focus attention on specific targets and direct employee efforts toward important outcomes. Rationale for decisions. Through goal setting and planning, managers learn what the organization is trying to accomplish. Standard of performance. Because goals define desired outcomes for the organization, they also serve as performance criteria.
Mission Statement
Goals in organizations
The overall planning process begins with a mission statement and strategic goals for the organization as a whole.
Mission
Mission statement
A broadly stated definition of the organizations basic business scope and operations that distinguishes it from similar types of organizations.
Example:
Mission Statement for Mail Boxes Etc.
Our Mission
Making Business Easier Worldwide Through Our Service and Distribution Network, Delivering Personalized and Convenient Business Solutions With World-Class Customers Service.
Our Core Values
Caring Integrity
Honesty Trust
Fairness Respect
Commitment Accountability
Strategic goals. Broad statements of where the organization wants to be in the future; pertain to the organization as a whole rather than to specific divisions or departments. Strategic plans. The actions steps by which an organization intends to attain strategic goals.
Tactical goals. Goals that define the outcomes that major divisions and departments must achieve in order for the organization to reach its overover-all goals. Tactical plans. Plans designed to help execute major strategic plans and to accomplish a specific part of the companys strategy.
Operational goals. Specific, measurable results expected from departments, work groups, and individuals within the organization. Operational plans. Plans developed at the organizations lower levels that specify action steps toward achieving operational goals and that support tactical planning activities.
MISSION
Manufacture both standard and custom metal products for various applications in the machine tool industry
STRATEGIC GOALS
President
12% return on investment; 5% growth No employee layoff; Excellent service to customer
TACTICAL GOALS
Finance V.P.
Keep outstanding accounts below $500,000 Keep borrowing below $2 million Provide monthly budget statements for departments Have delinquent accounts of no more than 2% of total
Production V.P.
Manufacture 1,200,000 products at average cost of $19 Increase manufacturing productivity by 2% Resolve employee grievances within 3 working days
OPERATIONAL GOALS
Challenging but realistic. Goals should be challenging but not unreasonably difficult. Defined time period. Goals should specify the time period over which they will be achieved. Linked to rewards. The ultimate impact of goals depends on the extent to which salary increases, promotions, and awards are based on goal achievement.
Is a method whereby managers and employees define goals for every department, project, and person and use them to monitor subsequent performance.
4 major activities: activities: 1. Set goals 2. Develop action plans 3. Review progress 4. Appraise overall performance
Action Plans
Review Progress
Appraise Performance
Benefits of MBO
1. Manager and employee efforts 1. Constant change prevents MBO from are focused on activities that will taking hold. lead to goal attainment. 2. Performance can be improved at all company levels. 2. An environment of poor employeremployee 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.
SingleSingle-use Plans
Plans that are developed to achieve a set of goals that are unlikely to be repeated in the future.
SINGLE-USE PLANS Program Plans for attaining a one-time organizational goal Major undertaking that may take several years to complete Large in scope; may be associated with several projects
Examples:
Project Also a set of plans for attaining a one-time goal Smaller in scope and complexity than a program; shorter time horizon Often one part of a larger program Renovating the office Setting up a company intranet
Examples:
Standing Plans
Ongoing plans that are used to provide guidance for tasks performed repeatedly within the organization.
STANDING PLANS Policy Broad in scope a general guide to action Based on organizations overall goals/strategic plan Defines boundaries within which to make decisions Drug-free workplace policies Sexual harassment policies Narrow in scope Describes how a specific action is to be performed May apply to specific setting
No-smoking rule in areas of plant where hazardous materials are stored
Examples:
Rule
Example:
Procedure Sometimes called a standard operating procedure (SOP) Defines a precise series of steps to attain certain goals Procedures for issuing refunds Procedures for handling employee grievances
Examples:
Contingency Plans
Plans that define company responses to specific situations, such as emergencies, setbacks, or unexpected conditions.
STAGES OF CRISIS MANAGEMENT Prevention Build relationships Detect signals from environment. Preparation Designate crisis management team and spokesperson. Create detailed crisis management plan. Set up effective communications system. Containment Rapid response: Activate the crisis management plan. Get the awful truth out. Meet safely and emotional needs. Return to business.
Decentralized planning
Managers work with planning experts to develop their own goals and plans.
Start with a strong mission Set stretch goals Create a culture that encourages learning Design new roles for planning staff Use temporary task forces Planning still starts and stops at the top