MGMT 309 Chapter 6

Strategic Plans

A general plan set by and for top management that outlines resource allocation, priorities, and action steps to achieve strategic goals.

Managing Multiple Goals

Optimizing allows managers to balance and reconcile inconsistent or conflicting goals. • Managers can pursue one goal and exclude all others or to seek a mid-range goal.

Planning Staff

Gather information, coordinate planning activities, and take a broader view than individual managers.

Kinds of Goals: By Area

• Different functional areas of the organization.

Board of Directors

• Establishes corporate mission and strategy. • May engage in strategic planning.

Line Management

• Have formal authority and responsibility for management of the organization. • Help to formulate strategy by providing information. • Are responsible for executing the plans of top management.

The Effectiveness of Formal Goal Setting: Strengths (success)

• Improved employee motivation • Enhances 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

Executive Committee

• Is composed of top executives. • Meets regularly with the CEO to review strategic plans.

Decision Making

• Is the cornerstone of planning. • Is the catalyst that drives the planning process. • Underlies every aspect of setting goals and formulating plans.

Kinds of Goals: By Time Frame

• Long-term, intermediate-term, or short-term time frames and explicit time frames or open-ended. - Don't let time frame affect what type of goal is named

Kinds of Goals: By Level

• Mission statement is a statement of an organization's fundamental purpose. • Strategic goals are goals set by and for top management of the organization that address broad, general issues. • Tactical goals are set by and for middle managers; their focus is on how to operationalize actions to strategic goals. • Operational goals are set by and for lower-level managers to address issues associated with tactical goals.

Responsibilities for Planning

• Planning Staff • Planning Task Force • Board of Directors • Chief Executive Officer

The Effectiveness of Formal Goal Setting: Weaknesses (Failure)

• Poor implementation of the goal setting process • Lack of top-management support for goal setting • Delegation of the goalsetting process to lower levels • Overemphasis on quantitative goals • Too much paperwork and record keeping • Managerial resistance to goal setting

Purpose of Goals

• Provide guidance and a unified direction for people in the organization. • Strong effect on the quality of other aspects of planning. • Serve as a source of motivation for employees. • Provide a mechanism for evaluation and control of the organization. - Goals: Control mechanism, motivation

Criteria for Effective Goals

• Specific and measurable • Cover key result areas • Challenging but realistic • Defined time period • Linked to rewards

Kinds of Organizational Plans

• Strategic Plans • Tactical Plans • Operational Plans

Time Frames for Planning

• The Time Dimension of Planning • Long-Range Plans • Intermediate Plans • Short-Range Plans

Tactical Plans

A plan aimed at achieving the tactical goals set by and for middle management.

Management by Objectives (MBO)

A technique for integrating formal goal setting and planning by giving subordinates a voice and clarifying what they are expected to accomplish. • Same as formal goal setting - Tell us what we are going to accomplish.

Who sets goals?

All managers • Managerial responsibility for goal setting should correspond to the manager's level in the organization.

Apollo 13 Clip

Contingency Planning & Crisis Management

Planning Task Force

Created when the organization wants a special circumstance addressed. - For a defined time period and task

Major Barriers

Inappropriate goals, improper reward system, dynamic and complex environment, reluctance to establish goals, resistance to change, constraints

Chief Executive Officer

May serve as president or board chair; has a major role in planning and implementing the strategy.

The Time Dimension of Planning

Planning must provide sufficient time to fulfill the managerial commitments involved.

Operational Plans

Short term focus plans that are set by and for lower-level managers.

Short-Range Plans

Short-range (operational) action and contingency plans of 1 year or less.

Decision Making & Planning

Strategic --> Tactical --> Operational

Overcoming the Barriers

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

Intermediate Plans

Usually cover from 1 to 5 years and parallel tactical plans. - Tactical

Long-Range Plans

Usually cover plans 5 or more years. - Strategic

Mission

What does the company want to be known for

Contingency Planning

• The determination of alternative courses of action to be taken if an intended plan is unexpectedly disrupted or rendered inappropriate. • These plans help managers to cope with uncertainty and change. - For what is to come

Decision Planning

• All organizations plan, but not in the same fashion. • All planning occurs within an environmental context. • All goals require plans to guide in their achievement. • All goals are tied higher goals and plans.

Barriers to Goal Setting and Planning

• As part of managing the goal-setting and planning process, managers must understand the barriers that can disrupt them. • Managers must also know how to overcome them. • Major barriers • Overcoming the barriers

Kinds of Goals

• By Level • By Area • By Time Frame

Crisis Management

• The set of procedures the organization uses in the event of a disaster or other unexpected calamity. • Difficult to anticipate. - For what has already happened, what is the response for an unanticipated event