MANAGEMENT

RICHARD L. DAFT
Managerial Planning and
Goal Setting
CHAPTER 6
chapter6 Learning Outcomes
• Define goals and plans and explain the relationship between them.
• Explain the concept of organizational mission and how it influences goal
setting and planning.
• Describe the types of goals an organization should have and how
managers use strategy maps to align goals.
• Define the characteristics of effective goals.
• Describe the four essential steps in the management by objectives (MBO)
process.
• Explain the difference between single-use plans and standing plans.
• Describe and explain the importance of contingency planning, scenario
building, and crisis planning in today’s environment.
• Summarize the guidelines for high-performance planning in a fast-
changing environment.
3
Copyright ©2010 by South-Western, a division of Cengage
Learning.  All rights reserved.
 Does Goal Setting Fit Your
chapter6
Management Style?
• Managers must plan where the organization
should go in the future
• Managers must plan for unexpected events
• The company establishes a basic mission and
develops goals and objectives
• Plans should meet environmental changes and
expectations of stakeholders
• Planning is fundamental to all organizations
• Everything stems from planning
4
Copyright ©2010 by South-Western, a division of Cengage
Learning.  All rights reserved.
chapter6 Overview of Goals and Plans

• A goal is a desired future state that the

organization attempts to realize
• A plan is a blueprint for goal achievement
• There are different levels of planning and
goals in an organization
• Goals at each level of the organization
guide the organization
5
Copyright ©2010 by South-Western, a division of Cengage
Learning.  All rights reserved.
 Levels of Goals/Plans
chapter6
and their Importance

6
Copyright ©2010 by South-Western, a division of Cengage
Learning.  All rights reserved.
 Characteristics of
chapter6
Goals and Plans
 Legitimacy
 Source of motivation and commitment
 Resource allocation
 Guides to action
 Rationale for decisions
 Standards of performance
7
Copyright ©2010 by South-Western, a division of Cengage
Learning.  All rights reserved.
 The Organizational Planning
chapter6
Process

8
Copyright ©2010 by South-Western, a division of Cengage
Learning.  All rights reserved.
chapter6 Organizational Mission
• The mission statement is the reason the
organization exists
– Top of the goal hierarchy
– Describes the values, aspirations and reason
for being
– A well-defined mission is the basis for all other
goals
• Mission statements outline the stated
purpose and values to stakeholders
9
Copyright ©2010 by South-Western, a division of Cengage
Learning.  All rights reserved.
chapter6 Types of Goals and Plans
• Strategic Goals – official goals, broad statements
about the organization
– Define the action steps the company intends to attain
– The blueprint that defines activities
• Tactical Goals – help execute major strategic plans
– Specific part of the company’s strategy
– Plans of the divisions and departments
• Operational Goals – results expected from
departments, work groups, and individuals
– Lower levels of the organization
– Specific action steps 10
Copyright ©2010 by South-Western, a division of Cengage
Learning.  All rights reserved.
 Aligning Goals
chapter6
with Strategy Maps
• Goals should be consistent and mutually
supportive

• The achievement of goals at low levels

permits the attainment of high-level goals

• Individuals, teams, and departments

should be working in concert

11
Copyright ©2010 by South-Western, a division of Cengage
Learning.  All rights reserved.
 Strategy Map for
chapter6
Aligning Goals

Goals
should be
consistent
and
mutually
supportive

12
Copyright ©2010 by South-Western, a division of Cengage
Learning.  All rights reserved.
chapter6 Operational Planning

• Operational goals should direct employees

and resources toward outcomes

• It is important to establish effective goals

– Management by objective
– Single-use plans
– Standing plans

13
Copyright ©2010 by South-Western, a division of Cengage
Learning.  All rights reserved.
 Characteristics of
chapter6
Effective Goal Setting

14
Copyright ©2010 by South-Western, a division of Cengage
Learning.  All rights reserved.
chapter6 Management by Objective

Defined by management scholar

Peter Drucker in his 1954 book,
The Practice of Management

Process of defining goals and

monitoring progress

15
Copyright ©2010 by South-Western, a division of Cengage
Learning.  All rights reserved.
chapter6 Model of the MBO Process

16
Copyright ©2010 by South-Western, a division of Cengage
Learning.  All rights reserved.
chapter6 MBO Benefits and Problems

17
Copyright ©2010 by South-Western, a division of Cengage
Learning.  All rights reserved.
 Single-Use and
chapter6
Standing Plans

18
Copyright ©2010 by South-Western, a division of Cengage
Learning.  All rights reserved.
 Planning for a Turbulent
chapter6
Environment
• Contingency Planning – plans for
emergencies, setbacks or unexpected
conditions

• Building Scenarios – visualizing future

possibilities

• Crisis Planning – preparing to cope with

unexpected events
19
Copyright ©2010 by South-Western, a division of Cengage
Learning.  All rights reserved.
 Essential Stages of
chapter6
Crisis Planning

20
Copyright ©2010 by South-Western, a division of Cengage
Learning.  All rights reserved.
 Planning for High
chapter6
Performance
Traditional Approach: High-Performance
• Done by top Approach:
executives (top down) • Decentralized planning
• Central planning • Managers plan
departments throughout the
• Planning specialist organization
• Now involves line-
Stretch Goals and Big managers and
Hairy Audacious employees
Goals (BHAG) are big • Dynamic plans for fast-
and inspiring changing needs
21
Copyright ©2010 by South-Western, a division of Cengage
Learning.  All rights reserved.
 Performance Dashboard
chapter6
for Planning
• Gauge progress
toward goals

• Align and track

goals

• All employees can

track progress

22
Copyright ©2010 by South-Western, a division of Cengage
Learning.  All rights reserved.