Chapter 7

Goals, Plans, Planning

A goal is a desired future state that the organization attempts to realize

A plan is a blueprint for goal achievement and specifies the necessary resource allocations, schedules,
tasks, and other actions

PLANNING incorporates both ideas & means determining the goals and defining the means for achieving
them.

Spin vs. Truth

• Spin – Make other people believe what you want them to believe

• Truth –

1- where your money goes; where company resources are allocated

2- Follow the money – see the company’s accounting books if what they say (mission,goals,
strategic/tactical plans) is a spin or truth.

Goals Setting in Organizations

• Organizational Mission – the organization’s reason to be in the market

• Strategic goals – official goals, Strategic objectives - formal objectives describing the future of the
organization

• Strategic plans – • - Defining the steps to be taken by the company, goals must be consistent

Strategic Goals, Plan, Planning

• Strategic goals - Extensive goals describing where the organization wants to be in the future.

 The strategic plans determine the steps in which the company intends to achieve the strategic
objectives. The Strategic Plan is a blueprint that defines organizational activities and resource
allocation.

• Strategic planning take care to be long-term.

The Organizational Planning Process
The planning process involves five steps:

1) Develop the plan

2) translating the plan into action;

3) Develop the operational factors necessary to achieve the objectives;

4) implementation of the plan;

5) Monitoring and reviewing plans to learn from the outcomes and plans of transformation as needed.

Tactical Goals, Plans

 Tactical goals are the outcomes that key departments and divisions within an organization
intend to achieve; middle management; is the description of what sub-units should do to enable
the organization to achieve strategic objectives.
 Tactical plans define what the main departments and organizational sub-units will make to
implement the organization’s strategic plan. Tend to be for a shorter period of time

Operational Goals, Plans

• Operational goals are the expected outcomes from departments, work groups and individuals.

• Operational plans. are developed at lower levels of the organization to identify action plans
towards operational goals and support tactical plans.

Levels of Goals and Plans

1- top managers are responsible for setting strategic goals and plans.
2- strategic goals and plans that reflect commitment to both organizational efficiency and
effectiveness.
3- Tactical goals and plans are the responsibility of middle managers.
4- Operational plans specify the specific actions required at the lower levels of the organization.
Frontline managers and supervisors develop operational plans that focus on specific tasks and
processes and help achieve tactical and strategic objectives

All levels should support each other throw planning

Aligning Goals with Strategy Maps

Organizational goals that are effectively designed are aligned with the hierarchy in which the
attainment of goals at lower levels is allowed to achieve higher-level objectives.

Operational goals lead to the achievement of tactical objectives, which lead to the achievement of
strategic objectives.

Organizational performance is the result of the congruence of these interrelated elements, so that
individuals, teams, departments, etc.

work in coordination to achieve specific goals that ultimately help the organization achieve its mission.

Strategy maps
Strategy maps are visual presentations of the key drivers of the organization's success and show how to
link specific goals and plans.

It provides a powerful means for managers to see the causal and archaeological relationships between
goals and plans.

Managers use the strategy map to align operational goals with tactical goals and to reconcile tactical
objectives with strategic goals.

Operational Planning
Managers use operational objectives to direct staff and resources towards specific results that enable
the organization to perform efficiently and effectively.

Managers then use a number of planning methods, including management by objectives (MBO), single
use plans and standing plans.

Criteria for Effective Goal Setting

Specific and measurable. Where possible, the objectives should be expressed quantitatively. Ambiguous
goals do not tend to motivate employees.

Time period. Goals should set the time period during which they will be achieved.

Cover key results areas. are those that contribute more to the company's performance. Key results areas
should include both internal and external customers.

Choice and clarity. Some carefully selected, clear and direct goals can strongly focus on the
organization's interest, energy and resources.

Challenging but realistic. The best quality programs start with very ambitious goals that challenge staff
to meet high standards.
Linked to rewards. The impact of objectives depends on the extent of salary increases, promotions and
other rewards on the basis of achieving the objectives. People who achieve the goals must be rewarded.

Management by Objectives:
Management by objectives (MBO) is a way for managers and employees to define goals for each
department, project, and person and use them to monitor subsequent performance.

Four major activities must occur in order for MBO to be successful:

1- set Goals. Goal setting is the most difficult step in an MBO and staff should be involved at all
levels.
2- Development of action plans. The action plan identifies the course of action required to achieve
the objectives set. Plans are made for both individuals and departments.

3- Review progress. Reviewing periodic progress is important to ensure action plans work.

4- Appraise overall performance. The final step in the MBO is to assess whether annual targets
have been achieved for both individuals and departments

MBO Benefits
The benefits of MBO process can be many. The company's goals are likely to be met when it focuses on
the efforts of the manager and staff

Single-Use Plans vs. Standing Plans

Single use plans are developed to achieve goals that are unlikely to recur in the future. Single use plans
include both programs and projects.

standing plans are used to provide guidance for frequently executed tasks within an organization. Many
companies are discovering the need to develop standing plans for using e-mail.
Benefits and Limitations of Planning
Benefits of planning

1- goals and plans is considered as a source of motivation and commitment.

2- guide resource allocation.
3- action and set a standard of performance.

Planning limits

1- Goals and plans can create a false sense of certainty,

2- may cause rigidity in a turbulent environment.
3- plans can hinder intuition and creativity

Planning for a Turbulent Environment

Contingency plans: identify company responses to be taken in emergencies or setbacks, Such as
declines in sales or prices, and the loss of important managers

Building scenarios: involves looking at trends and reflections and imagining potential alternative futures
to build a framework through which unexpected future events can be managed.

Crisis Planning: When the crisis strikes, rapid response is crucial. The team should be able to implement
the crisis management plan immediately, so training and practice are important.

two essential stages of crisis planning:

1- Crisis Prevention: managers must do everything in their power to prevent crises by building
trust relationships with key stakeholders such as employees, customers, suppliers, governments,
trade unions, and society.
2- Crisis Preparation: The setup includes the appointment of Crisis Management Team and the
Spokesperson, creating a detailed crisis management plan and establishing an effective
communications system. (1) Set Stretch Goals for Excellence

INNOVATIVE APPROACHES TO PLANNING

Stretch goals are reasonable yet very ambitious goals that are clear, attractive and innovative to the
extent that they release employees and lead to excellence. They are usually beyond current levels
where people have to be innovative to find ways to reach them.