MGMT Ch 7

Planning Staff

can reduce the workload of individual managers, help coordinate the planning activities of individual managers, bring to a particular problem many different tools and techniques, take a broader view than individual managers, and go beyond pet projects and particular department.

Board of Directors

establishes the corporate mission and strategy

Formal goal setting

generally gives subordinates a voice in the goal-setting and planning processes and to clarify for them exactly what they are expected to accomplish in a given time span.

Short-range Plans

have a time frame of one year or less. Short-range plans greatly affect the manager's day-to-day activities. - there are two basic types of short-range plans - Action: operationalizes any other kind of plan - Reaction: a plan designed to allow the company to react to an unforeseen circumstance.

Executive Committee

usually composed of the top executives in the organization working together as a group. - committee members usually meet regularly to provide input to the CEO on the proposal that affect their own units and to review the various strategic plans that develop from this input.

Management by Objective

a formal goal-setting process involving collaboration between managers and subordinates; the extent to which goals are accomplished is a major factor in evaluating and rewarding subordinates' performance.

Strategic Planning

a general plan outlining decisions of resource allocation, priorities, and action steps necessary to reach strategic goals

Who sets goals?

- All managers should be involved in the goal-setting process. Each manager generally has responsibilities for setting goals that correspond to his or her level in the organization. - Top managers and the board of directors - the mission and strategic goals - Top and middle managers - establish tactical goals - middle and lower managers - operational goals

Kinds of goals

- Level: goals are set for and by different levels within an organization - Area: goals set for different areas - Time Frame: short-term, long-term, intermediate-term, explicit time frame, and open-ended time frame.

Level of goals

- Mission Statement - a statement of its "fundamental, unique purpose that sets a business apart from other firms of its type and identifies the scope of the business's operations in product and market terms." - Strategic goals - are goals set by and for top management of the organization. They focus on broad, general issues. - Tactical goals - are set by and for middle managers. their focus is on how to operationalize actions necessary to achieve the strategic goals - Operational goals - set by and for lower-level managers. their concern is with shorter-term issues associated with the tactical goals.

Responsibilities for planning

- Planning staff - planning task force - board of directors - chief executive officer - executive committee - line management

The formal goal setting process

- a formal goal-setting program is to be successful, it must start at the top of the organization. - employees must also be educated about what goal setting is and what their role in it will be.

Tactical Planning

- aimed at achieving tactical goals, is developed to implement specific parts of a strategic plan. - typically more involve more upper and middle management and compared with strategic plans, have a somewhat shorter time horizon and a more specific and concrete focus.

The Planning Process

- all organizations engage in planning activities, but no two organizations plan in exactly the same fashion. - all planning occurs within an environmental context, it is essentially the first step in planning - All goals are tied to higher goals and plans

Long-range plans

- covers many years, perhaps even decades. - the time span for long-range planning varies from one organization to another.

Operational Planning

- focuses on carrying out tactical plans to achieve operational goals. - Developed by middle and lower-level managers, operational plans have a short-term focus and are relatively narrow in scope.

Barriers to goal setting and planning

- inappropriate goals - improper reward system - dynamic and complex environment - reluctance to establish goals - resistance to change - constraints

Optimizing

- involves balancing and reconciling possible conflicts among goals. The managers must look for inconsistencies and decide whether to pursue one goal to the exclusion of another or to find a midrange target between the extremes

Intermediate Plans

- is somewhat less tentative and subject to change than is long-range plans. - usually cover periods from one to five years and are especially important for middle and first-line managers.

Decision Making

- is the cornerstone of planning - is the catalyst that drives the planning process - underlies every aspect of setting goals and formulating plans

Line Management

- persons with formal authority and responsibility for the management of the organization. 1) they are a valuable source of inside information for other managers as plans are formulated and implemented. 2) the line managers at the middle and lower levels of the organization usually must execute the plans developed by top managers.

Kinds of organizational planning

- strategic - tactical - operational

Planning task force

- such a task force often compromises line managers with a special interest in the relevant area of planning. - most often created when the organization wants to address a special circumstance.

Overcoming barriers to goal setting and planning

- understanding the purposes of goals and planning - communication and participation - consistency, revision, and updating - effective reward system

Purpose of goals

1.) they provide guidance and a unified direction for people in the organization. Goals can help everyone understand where the organization is going and why getting there is important 2.) goal-setting practices strongly affect other aspects of planning. Effective goal setting promotes good planning facilitates future goal setting. 3.) goals can serve as a source of motivation for employees of the organization. goals that are specific and moderately difficult can motivate people to work harder, especially if attaining the goal is likely to result in rewards. 4.) goals provide an effective mechanism for evaluation and control. This means that performance can be assessed in the future in terms of how successfully today's goals are accomplished.

Effectiveness of formal goal setting

Strengths - improved employee motivation - enhanced communication - fosters more objective performance appraisals - focuses attention on appropriate goals and plans - helps identify managerial talent - provides a systematic management philosophy - facilitates control of the organization Weaknesses - poor implementation of the goal setting process - lack of top-management support for goal setting - delegation of the goal-setting process to lower levels - overemphasis on quantitative goals - too much paperwork and record keeping - managerial resistance to goal setting

Chief Executive Officer

The single most important individual in any organization's planning process. the CEO plays a major role in the complete planning process and is responsible for implementing the strategy.

Contingency planning

the determination of alternative courses of action to be taken if an intended plan of action is unexpectedly disrupted or rendered inappropriate.

Crises Management

the set of procedures the organization uses in the event of a disaster or other unexpected calamity.