CHAPTER 6

ESTABLISHING

Copyright 2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin

61

LECTURE OUTLINE
The planning process
The nature of organisational

goals
How goals facilitate performance
Linking goals & plans
Management by objectives
Copyright 2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin

62

LECTURE OUTLINE
The concept of strategic

management
The role of competitive analysis
in strategy formulation
Formulating functional level
strategy
Strategy implementation
Copyright 2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin

63

THE PLANNING PROCESS

Mission
The organisations purpose or fundamental
reason for existence

Goal
Future target or end result an organisation wishes
to achieve

Plan
Means devised for attempting to reach a goal

Copyright 2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin

64

THE PLANNING PROCESS

mission

goals

plans

Goal attainment
(organisational
efficiency
& effectiveness)

Copyright 2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin

65

THE PLANNING PROCESS

Setting goals & developing plans
leads to goal attainment and
ultimately, to organisational
efficiency & effectiveness.

Copyright 2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin

66

ORGANISATIONAL MISSION
Essentially, planning builds on the
organisations mission, the
organisations purpose or
fundamental reason for
existence.

Copyright 2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin

67

ORGANISATIONAL MISSION
Mission statement may:
be unwritten
address customers,

products/services, location,
technology, concern for survival,
philosophy, self-concept, concern for
public image, concern for employees
(David 1989)
Copyright 2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin

68

NATURE OF
ORGANISATIONAL GOALS
Benefits of goals

Increase performance
Clarify expectations
Facilitate control
Increase motivation

Levels of goals

Operational goals (base)

Tactical goals (mid)
Strategic goals (top)

Copyright 2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin

69

LEVELS OF GOALS
Top managers
Organisational perspective

strategic
goals

strategic
plans

Middle managers
Departmental perspective

tactical
goals

tactical
plans

1st level managers

Unit/individual perspective

operational
goals

operational
plans

Copyright 2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin

610

GOALS AND PERFORMANCE

Key aspects:
Goal content
Goal commitment
Work behaviour
Other process components
Possible problems
Copyright 2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin

611

GOALS AND PERFORMANCE

GOAL CONTENT
Should be:

Challenging
Attainable
Specific & measurable
Time-limited
Relevant

Copyright 2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin

612

GOALS AND PERFORMANCE

GOAL COMMITTMENT
Influenced by:

Supervisory authority
Peer & group pressure
Public display
Expectations of success
Incentives & rewards
Participation

Copyright 2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin

613

GOALS AND PERFORMANCE

WORK BEHAVIOUR
Goals & commitment affect work
behaviour:
Direction
Effort
Persistence
Planning
Copyright 2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin

614

GOALS AND PERFORMANCE

Job process components affect
performance:
Job knowledge & ability
Task complexity
Situational constraints

Copyright 2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin

615

GOALS AND PERFORMANCE

POTENTIAL PROBLEMS WITH GOALS
Excessive risk-taking
Increased stress
Undermined self-confidence
Ignored non-goal areas
Excessive short-run thinking
Dishonesty & cheating
Copyright 2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin

616

LINKING GOALS & PLANS

Levels of plans
Extent of recurring use
Time horizons of goals & plans
Promoting innovation

Copyright 2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin

617

LINKING GOALS & PLANS

Levels of plans:
Strategic
Operational
Tactical

Recurring use:
Single-use
Standing plans: policies, procedures, rules

Copyright 2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin

618

LINKING GOALS & PLANS

Time horizons of goals/plans:
Short
Intermediate
Long range

Promoting innovation by:

Mission statement
Goal content & process
Planning content & process

Copyright 2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin

619

OBSTACLES TO PLANNING
Environmental change
Manager hostility
Pressure of day-to-day work
Low levels of manager skill & knowledge
Domination by specialists
Copyright 2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin

620

OBSTACLES TO PLANNING
REDUCING PLANNING OBSTACLES
Use of planning staff
Small group who assist managers in planning

Use contingency planning

Development of alternative plans

Copyright 2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin

621

MANAGEMENT BY OBJECTIVES
Process through which specific goals
are set collaboratively for the
organisation as a whole and every
unit within it; the goals are then used
as a basis for planning, managing
organisational activities, and
assessing and rewarding
contributions.
Copyright 2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin

622

MANAGEMENT BY OBJECTIVES
Steps in the MBO process:
Develop organisational goals
Establish specific goals for departments
Formulate action plans
Implement & maintain self-control
Review progress periodically
Appraise performance

Copyright 2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin

623

MANAGEMENT BY OBJECTIVES
Strengths:

Helps link goals & plans

Clarifies priorities, expectations
Fosters organisational communication
Builds member motivation

Weaknesses:
Needs strong, enduring commitment
Requires training of managers
May be misused

(i.e. for punishment)

Risk of dominance of quantitative goals
Copyright 2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin

624

MANAGEMENT BY OBJECTIVES
Assessing MBO:
Can heighten organisational

performance
Short-term focus of US, Australian &
NZ organisations limits application
2025% success rate

Copyright 2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin

625

THE CONCEPT OF STRATEGIC

MANAGEMENT

Process through which managers

formulate and implement strategies geared
to optimising strategic goal achievement,
given available environmental and internal
conditions.

THE STRATEGIC MANAGEMENT PROCESS

IMPORTANCE OF STRATEGIC MANAGEMENT
LEVELS OF STRATEGY

Copyright 2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin

626

THE CONCEPT OF STRATEGIC

MANAGEMENT
THE STRATEGIC MANAGEMENT PROCESS
Strategy formulation
Strategy implementation
IMPORTANCE OF STRATEGIC MANAGEMENT
Competitive advantage
LEVELS OF STRATEGY
Corporate level
Business level
Functional level
Coordinating strategy levels
Copyright 2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin

627

THE ROLE OF COMPETITIVE ANALYSIS IN

STRATEGY FORMULATION

SWOT analysis
(Strengths, Weaknesses, Opportunities, Threats)

relies upon:
ENVIRONMENTAL ASSESSMENT
Porters five competitive forces model
ORGANISATIONAL ASSESSMENT
Organisational resources & capabilities
Distinctive competencies

Copyright 2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin

628

FORMULATING FUNCTIONAL
LEVEL STRATEGY

Functional level strategies spell

out how functional areas can
bolster business-level strategy
e.g. an R&D department might accelerate
innovation to provide new products before
competitors

Copyright 2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin

629

STRATEGY IMPLEMENTATION
Carrying out strategic plans

Technology
Human Resources
Reward systems
Decision processes
Structure

Maintaining strategic control

Monitoring environment
Assessing effects of actions
Monitoring results

Copyright 2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin

630

LECTURE SUMMARY
The planning process

Major components
Organisational mission statement

The nature of

organisational goals

Benefits of goals
Levels of goals
Goals & performance
Work behaviour
Other work processes
Possible problems with goals

Copyright 2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin

631

LECTURE SUMMARY
How goals facilitate performance

Direction, effort, persistence & planning

Linking goals & plans

Levels, recurrent use, time spans, promoting

innovation
Possible obstacles to planning

MBO (Management by objectives)

The key steps in MBO process

Strengths & weaknesses

Copyright 2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin

632

LECTURE SUMMARY
Concept of strategic management

The strategic management process

Importance of strategic management
Levels of strategy

Role of competitive analysis in

strategy formulation

SWOT analysis

Copyright 2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin

633

LECTURE SUMMARY
Formulating functional level strategy
Strategy implementation

Carrying out strategic plans

Maintaining strategic control

Copyright 2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin

634