Management Chapter 7

Limitations of Planning

1. Goals and plans can create a false sense of certainty (can give managers a false sense that they know what the future will be like- planning is based on assumptions) 2. Goals and plans may cause rigidity in a turbulent environment (can lock the organization into specific goals which may no longer be appropriate) 3. Goals and plans can get in the way of intuition and creativity ( routine planning may hamper creativity and intuition)

Tactical Goals

The results that major divisions and departments within the organization intend to achieve. (comes after strategic goals) - Tactical plans are designed to help execute the major strategic plans and to accomplish a specific part of the company's strategy.

Mission Statement

A mission statement is a broadly stated definition of the organization's basic business scope and operations that distinguishes it from similar types of organizations. - It guides decisions and actions.

Levels of Goals and Plans

Diagram 7.1 Mission Statement -> Strategic goals/plans (senior management -> Tactical goals/plans (middle management) -> Operational goals/plans (lower management).

Operational Goals

The results expected from departments, work groups, and individuals. They are precise and measurable. - Operational plans are developed at the lower levels of the organization to specify action steps toward achieving operational goals and to support tactical plans.

Benefits of Planning

1. Goals and plans provide a source of motivation and commitment. (reduces uncertainty for employees because they know what they are working towards) 2. Goals and plans guide resource allocation 3. Goals and plans are a guide to action. (Planning focuses attention on targets and directs employee efforts toward important outcomes. (Helps know what actions to take) 4. Goals and plans set a standard of performance

Strategic goals

Broad statements describing where the organization wants to be in the future. These goals pertain to the organization as a whole. Strategic plans define the steps by which the company intends to attain strategic goals.