Barriers of goal setting and planning could be external and internal factors.

1. Inappropriate Goals
Goals should be appropriate goals. These are goals that do not fit the organizations purpose,
mission or strategy - for example a church organization which is non-profit making aiming to
earn a specified profit.
Goals may also be inappropriate if they are unattainable. Goals should be challenging but if
they are unattainable they will finally stop being an effective incentive.
2. Improper Reward System
The improper reward system is a barrier for goal setting and planning.
Rewarding for poor goal-setting behavior or not be rewarded or even be punished for proper
goal setting behavior; these certainly have a bad effect on the people in charge of goal setting
and attainment.
If a company puts too much emphasis on Rewarding for short-term performance and results,
the employees may ignore longer-term issues as they set goals and formulate plans for short-
term achieve higher profit gain.
3. Dynamic and Complex Environment
If the nature of an organizations environment is not work-friendly then it is also a barrier to
effective goal setting and planning.
The manager attempting to set goals and plan in this fast-changing environment faces a truly
difficult task and rapid change in the market, technological innovation, and intense competition
are the reasons for it.
4. Reluctance to Establish Goals
Some managers are a reluctance to establish goals for themselves.
The reason for this reluctance may be lack of confidence, fear of failure, lack of skill or lack of
responsibility.
Managers who consciously or unconsciously try to avoid this degree of accountability are likely
to frighten the organizations planning efforts.
5. Some external Barriers
Lack of resources, government restrictions, strong competition, political situation, economic
condition; are some external factors that affect the organization’s goal setting process.
THE PROCESS OF MANAGEMENT BY OBJECTIVES (MBO):
The concept of MBO Management by objectives is a process that has been developed to
facilitate goal setting. Some books refer to it as management by results or management by
goals. The concept of MBO was articulated by Peter Drucker, who saw MBO as an integrative
management tool that could link the goals of the individuals to those of the firm as a whole.

Planning
Planning involves selecting missions and objectives and the actions to achieve them; it requires
decision making that is choosing from among alternative future course of action. Plan thus
provides a rational approach to preselected objectives. Planning also strongly implies
managerial innovations.
Process of planning
Steps in Planning:
1. being aware of Opportunity
In light of the market, competition, what customer want, our strengths and weakness
2. Setting Objectives or goals
Where we want to be and we want to accomplish and when
3. Considering Planning Premises
In what environment. Internal or External – will our plan to operate?
4. Identifying alternatives
What are the most promising alternatives to accomplish our objectives?
5. Comparing alternatives in light of goals
Which alternative will give us the best chance of meeting our goals at the lowest cost and
highest profit?
6. Choosing an alternative
Selecting the course of action we will pursue
7. Formulating supporting plan
Such as plans to buy equipment, buy materials, hire and train workers. Develop a product.
8. Numbering plans by making budgets
Developing such budgets as volume and price of sales operating expenses necessary for plans
expenditure for capital equipment