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8/6/2019 Session 2 Planning & Goal Setting Ch05-St Version (1)
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Planning andPlanning and
Goal SettingGoal Setting
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7/10/2011 2
Learning Objectives
Define goals and plans and explain the relationship between them.
Explain the concept of organizational mission and how it influences goalsetting and planning.
Describe the types of goals an organization should have and why theyresemble a hierarchy.
Define the characteristics of effective goals.
Describe the four essential steps in the MBO process.
Explain the difference between single-use plans and standing plans. Describe and explain the importance of the three stages of crisis
management planning.
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Learning Objectives (contd.)
Summarize the guidelines for high-performance planning in a fast-changingenvironment.
Define the strategic planning process and SWOT analysis.
Describe business-level strategies, including Porters competitive forcesand strategies and partnership strategies.
Explain the major considerations in formulating functional strategies.
Discuss the organizational dimensions used for implementing strategy.
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Planning Is A Three Step Activity
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DETERMINING THE ORGANIZATION'S MISSION AND GOALSDefine the business
Establishing major goals
FORMULATING STRATEGYAnalyze current situation and develop strategies
IMPLEMENTING STRATEGYAllocate resources and responsibilities to achieve goals
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Goals and Plans
Goal - A desired future state that theorganization attempts to realize
Plan - A blueprint specifying the resourceallocations, schedules, and other actionsnecessary for attaining goals
Planning determining the organizations goalsand the means for achieving them
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7/10/2011 6Exhibit 5.1
Levels of Goals/Plans
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Purpose of Goals and Plans
Legitimacy What the organization stands for - reason for being
Employees identify with purpose Source of Motivation and Commitment
Employees identification with the organization
Motivate by reducing uncertainty
Resource Allocation Allocate employees, money, and equipment
Guides to Action Provide a sense of direction; focus attention on specific
targets
Direct efforts toward important outcomes
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Purpose of Goals and Plans
Rationale for Decisions Learn what organization is trying to accomplish
Make decisions to ensure that internal policies, roles,performance, structure, products, and expenditures will be
made in accordance with desired outcomes
Standard of Performance Serve as performance criteria
Provide a standard of assessment
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Organizational Mission
Mission - organizations reason for
existing Mission Statement
Basic business scope
Distinguishes it from otherorganizations
Ourcompanys mission is to extend and enhance
human life by providing the highest-quality
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Strategic Goals and Plans
Strategic Goals
Future plans
Plans for whole organization
Strategic Plans
Action Steps used to attain strategic goals
Blueprint that defines the organizationalactivities and resource allocations
Long-term
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Tactical Goals and Plans
Tactical Goals
Apply to middle management
Goals that define the outcomes that major
divisions and departments must achieve
Tactical Plans
Plans designed to help execute st
rategicplans
Shorter time frame than strategic plans
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Operational Goals and Plans
Operational Goals
Specific, measurable results
Expected from departments, work groups,
and individuals
Operational Plans
Action steps toward operational goals Daily and weekly operations
Schedules are an important component
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Goal Alignment
Means-end Chain
Achievement of goals at lower levelspermits the attainment of high-level goals.
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Hierarchy of Goals
Exhibit 5.3
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Characteristics of Effective
Goal Setting
Specific and measurableSpecific and measurable
Challenging but realisticChallenging but realistic
Defined time periodDefined time period
Linked to rewardsLinked to rewards
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Single-Use Plans - Goals
Not Likely To Be Repeated
A program is a complex set of
objectives and plans to achieve an
important, one-time organizational
goal
A projectis similar to a program, but
generally smaller in scope and
complexity
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Standing Plans Tasks
Performed Repeatedly
A policy is a general guide to action andprovides direction for people within the
organization
Rules describe how a specific action is tobe performed
Procedures define a precise series of stepsto be used in achieving a specific job
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Contingency Plans
UnexpectedC
onditions
Identify Uncontrollable Factors Economic turndowns
Declining markets Increases in costs of supplies
Technological developments
Safety accidents
Flexible Plans
Multiple Future Alternatives
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Building Scenarios
Looking at trends and discontinuities and
imagining possible alternative futures to builda framework within which unexpected future
events can be managed.
Managers can rehearse mentally what they would
do if their best-laid plans were to collapse.
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Planning forHigh Performance
Less top-down management planning
Involve managers throughout the organization
Strategic thinking and execution is becoming
job of all employees
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Planning In The New Workplace
Have a strong mission statement and vision
Set stretch goals for excellence
Establish a culture that encourages learning
Embrace event-driven planning
Utilize temporary task forces Planning still starts and stops at the top
Planning comes alive when employees are involved in
setting goals and determining the means to reach them
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Strategic Management Process
Exhibit 5.10
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Organizations Mission & Vision
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To determine organizations mission, managers must first:
Ddefine the business
Managers must ask3
questions: WHO are our customers?
WHAT customer needs are being satisfied?
HOW are we satisfying customer needs? Answering these questions helps managers to identify:
Customer needs they are satisfying now.
Customer needs they should satisfy in the future.
Who are their true competitors.
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SWOT Analysis
Strengths
Weaknesses
Opportunities
Threats
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Questions For SWOT Analysis
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POTENTIAL
STRENGTHS
POTENTIAL
OPPORTUNITIES
POTENTIAL
WEAKNESSESPOTENTIAL THREATS
Well-developed
strategy?
Strong product lines?
Broad market
coverage?Manufacturing
competence?
Good marketing
skills?
Good materials
management
systems?
R & D skills and
leadership?
Human resource
competencies?
Brand-namereputation?
Expand core
business?
Exploit new market
segments?
Widen productrange?
Extend cost or
differentiation
advantage?
Diversity into new
growth business?
Expand into foreign
markets?
Apply R&D skills innew areas?
Enter new relatedbusinesses?
Poorly developed
strategy?
Obsolete, narrow
product lines?
Rising manufacturingcosts?
Decline in R&D
innovations?
Poor marketing
plan?
Poor materials
management
systems?
Loss of customergoodwill?
Inadequate human
resources
Attacks on core
business?
Increase in domestic
competition?
Increase in foreigncompetition?
Change in consumer
tastes?
Fall in barriers to
entry?
Rise in new or
substitute
products?
Increase in industryrivalry?
New forms of industry
competition?
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Directional Strategies
Downsizing
External GrowthStrategy
ConcentrationStrategy
Internal GrowthStrategy
Mergers and
Acquisitions
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Business-Level Strategy:
Porters Five Forces
Exhibit 5.12
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Porters Competitive Strategies
Differentiation Flexible, loose knit with strong coordination
Creative flair, thinks out of box
Strong marketing abilities
Rewards employee innovation
Reputation forquality or technical leadership
Cost
Leadership
Central authority, tight cost controls
Efficient procurement and distribution systems
Close su
pervision, finite employee empowe
rment
Focus Frequent, detailed control reports
Direct combination of policies to strategic target
Values and rewards flexibility and customer intimacy
Pushes empowerment to employees with customer
contact
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Porters Business Level Strategies
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STRATEGY
NUMBER OF MARKET SEGMENTS
SERVED
MANY FEW
Low-cost
Focused low-cost
Differentiation
Focused differentiation
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Partnership Strategies
Collaboration is an alternative form of strategy
Competition and collaboration are often
present at the same time. The Internet is driving and supporting more
partnerships.
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Implementation During
Turbulent Times
Three Key Issues: Global Mind-Set
Corporate Culture
Information Technology
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Three Stages of
Crisis Management
Prevention
Build trusting relationship with key stakeholders
Open communication
Preparation
Crisis Management Team & Plan
Establish an Effective Communications system
Containment
Activate the crisis management plan.
Get the awful truth out.
Meet safety and emotional needs.
Return to business.
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