MGT - CH 7 - 2022

Chapter 7
Managerial Planning and Goal Setting
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 1

Learning outcomes
• After studying this chapter, students should be

able to:
• 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.
Learning outcomes
• 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.
• Discuss the benefits and limitations of planning.
• Describe and explain the importance of contingency planning, scenario
building, and crisis planning for today’s managers.
• Identify innovative planning approaches managers use in a fast-
changing environment.

Planning is Fundamental
• All of the other management functions

stem from planning
• How do you plan for an undefined
future?
• No plan is perfect
– Without plans and goals,
organizations flounder

Goals, Plans, Planning
A goal is a desired future state

that the organization attempts to PLANNING
realize incorporates
both ideas &
means
determining
the goals and
A plan is a blueprint for goal defining the
achievement and specifies the means for
necessary resource allocations, achieving
schedules, tasks, and other actions them.
5
Goals, Plans, Planning
• Goals are important

– Because they define the purpose of an organization
• Goals specify future ends;
• Plans specify today’s means

7.1 Levels of Goals and Plans
Levels of Goals and Plans
• Top managers
– Be responsible for establishing strategic goals and plans that
reflect a commitment to both organizational efficiency and
effectiveness.
• Middle managers
– Be responsible for tactical goals and plans
• Front-line managers and supervisors
– Be responsible for operational plans
• Identify the specific procedures or processes needed at lower levels of the
organization
• Focus on specific tasks and processes and that help to meet tactical and
strategic goals
• Planning at each level supports the other levels

Levels of Goals and Plans
• The planning process starts with a formal mission

– The basic purpose of the organization, especially for external
audiences
• The mission
– The basis for the strategic (company) level of goals and plans,
which in turn shapes the tactical (divisional) level and the
operational (departmental) level
• A division manager will formulate tactical plans
– Focus on the major actions the division must take to fulfill its
part in the strategic plan set by top management

7.2 The Organizational Planning Process
The Organizational Planning Process
• The overall planning process prevents managers

– From thinking merely in terms of day-to-day activities
• The planning process includes five steps:
1) develop the plan;
2) translate the plan into action;
3) lay out operational factors needed to achieve goals;
4) execute the plan; and
5) monitor and review plans to learn from results and
shift plans as needed.

• The process begins

– When managers develop the overall plan for the
organization by clearly defining mission and strategic
(company-level) goals
• Second, they translate the plan into action,
– Defining tactical plans and objectives, developing a
strategic map to align goals, formulating contingency
and scenario plans, and identifying intelligence teams
to analyze major competitive issues

• Third, managers lay out the operational factors needed

to achieve goals
– Devising operational goals and plans, selecting the measures
and targets that will be used to determine if things are on
track, and identifying stretch goals and crisis plans that might
need to be put into action
• Tools for executing the plan
– Management by objectives, performance dashboards, single-
use plans, and decentralized responsibility
• Finally, managers periodically review plans
– To learn from results and shift plans as needed, starting a new
planning cycle
Goal Setting in Organizations
Organizational Mission
•The organization’s reason for existence
– Describes the organization’s values, aspirations, and reason for being
•The formal mission statement
– A broadly stated definition of purpose that distinguishes the organization
from others of a similar type
•The content often focuses on
– The market and customers and identifies desired fields of endeavor
•Some mission statements describe
– Company characteristics such as corporate values, product quality,
location of facilities, and attitude toward employees

• A well-defined mission
– The basis for development of all subsequent goals and plans
• Without a clear mission,
– Goals and plans may be developed haphazardly and not take
the organization in the direction it needs to go
• A well-designed mission statement can enhance
– Employee motivation and organizational performance
• Such short, straightforward mission statements describe
– Basic business activities and purposes as well as the values
that guide the company

Mission Statement for Volvo Group

• Strategic goals, sometimes called official goals,

– Broad statements describing where the organization wants to
be in the future
– Pertain to the organization as a whole rather than to specific
divisions or departments.
• Strategic plans
– The action steps by which the company intends to attain
strategic goals
– The blueprint that defines the organizational activities and
resource allocations required for meeting these targets
• Cash , personnel, space, and facilities

• Strategic planning
– Tends to be long term and may define organizational
action steps from two to five years in the future.
• The purpose of strategic plans
– To turn organizational goals into realities within that
time period

• Tactical goals
– The results that major divisions and departments within the
organization intend to achieve
• These goals
– Apply to middle management and
– Describe what major subunits must do for the organization to
achieve its overall goals
• Tactical plans
– Be designed to help execute the major strategic plans and to
accomplish a specific part of the company’s strategy

• Tactical plans
– Typically have a shorter time horizon than strategic
plans
– Over the next year or so
• The word tactical originally comes from the military.
• In a business or nonprofit organization, tactical plans
– What major departments and organizational
subunits will do to implement the organization’s
strategic plan

• Tactical plans might include

– Cross-training employees so they can switch to different jobs
as departmental needs change, allowing order takers to
transfer to jobs at headquarters during off-peak times to
prevent burnout, and using regular order takers to train and
supervise temporary workers during peak seasons
• These actions help top managers implement their
overall strategic plan
• Normally, it is the middle manager’s job
– To take the broad strategic plan and identify specific tactical
plans

• Operational goals
– The results expected from departments, work groups, and individuals
– Be precise and measurable
• Operational plans
– Be developed at the lower levels of the organization
• To specify action steps toward achieving operational goals and to support
tactical plans
– The department manager’s tool for daily and weekly operations
• Goals
– Be stated in quantitative terms, and the department plan describes how
goals will be achieved

• Operational planning
– Plans for department managers, supervisors, and individual
employees
• Schedules
– Be an important component of operational planning
• Schedules
– Precise time frames for the completion of each operational
goal required for the organization’s tactical and strategic goals
• Operational planning also must be coordinated with the
budget,
– Because resources must be allocated for desired activities
Why Aligning Goals?
• Effectively designed organizational goals are aligned

into a hierarchy in which the achievement of goals at
lower levels permits the attainment of higher-level
goals.
• Operational goals lead to the achievement of tactical
goals, which lead to the attainment of strategic goals.
• Organizational performance is an outcome of how
well these interdependent elements are aligned, so
that individuals, teams, departments, and so forth are
working in concert to attain specific goals that
ultimately help the organization fulfill its mission.
Aligning Goals with Strategy Map
Strategy maps are visual representations of
• The key drivers of an organization’s success and
• Show how specific goals and plans in each area
are linked.
• They provide a powerful way for managers to see
the cause-and-effect relationships among goals
and plans.
• Help align operational goals with tactical goals;
• Help align tactical goals with strategic goals.
7.4 Example of A Strategy Map
Kaplan, “Balanced Score Card Model”
• Four key areas that contribute to a firm’s long-term success

– Learning and growth, internal processes, customer service, and financial performance and
how the various goals and plans in each area link to the other areas
• Learning and growth goals
– Serve as a foundation to help achieve goals for excellent internal business processes
• Meeting business process goals, in turn, enables the organization to meet goals for customer
service and satisfaction
– Helps the organization achieve its financial goals and optimize its value to all stakeholders

• The organization has learning and growth goals

– Developing employees, enabling continuous learning and knowledge sharing, and building a
culture of innovation
• Achieving these will help the organization build internal business processes
– Promote good relationships with suppliers and partners, improve the quality and flexibility of
operations, and excel at developing innovative products and services
• Accomplishing internal process goals, in turn, enables the organization to
maintain strong relationships with customers, be a leader in quality and
reliability, and provide innovation solutions to emerging customer needs.
• At the top of the strategy map, the accomplishment of these lower-level goals
helps
– The organization increase revenues in existing markets, increase productivity and efficiency,
and grow through selling new products and services and serving new market segments.

• In a real-life organization, the strategy map

– Would typically be more complex and would state concrete,
specific goals relevant to the particular business
• However, the generic map gives and idea of how
managers can map goals and plans
– So that they are mutually supportive
• The strategy map is also a good way to communicate
goals,
– Because everyone in the organization can see what part they
play in helping the organization accomplish its mission

Operational Planning
• Managers use operational goals to direct

employees and resources
– Toward achieving specific outcomes that enable the
organization to perform efficiently and effectively
• One consideration
– How to establish effective goals
• Then managers use a number of planning
approaches,
– Management by objectives, single-use plans, and
standing plans
7.5 Criteria for Effective Goal Setting

Criteria for Effective Goals
Specific and measurable

•When possible, goals should be expressed in quantitative
terms
– Increasing profits by 2 percent, having zero incomplete sales
order forms, or increasing average teacher effectiveness
ratings from 3.5 to 3.7
•Not all goals can be expressed in numerical terms,
– But vague goals have little motivating power for employees
• By necessity, goals are qualitative as well as quantitative
•The important point is that
– The goals be precisely defined and allow for measurable
progress
Defined time period.

•Goals should specify
– The time period over which they will be achieved
• A time period
– A deadline on which goal attainment will be measured.
• School administrators might set a deadline for improving teacher
effectiveness ratings, for instance, at the end of the 2009 school
term
•When a goal involves a two- to three-year time horizon,
– Setting specific dates for achieving parts of it is a good way to keep people
on track toward the goal

Cover key result areas

•Key result areas
– Those items that contribute most to company performance
•Key result areas should include
– Both internal and external customers
•Goals cannot be set for every aspect of employee behavior or
organizational performance;
– If they were, their sheer number would render them meaningless
•Instead, managers establish goals
– Based on the idea of choice and clarity
•A few carefully chosen, clear, and direct goals can
– More powerfully focus organizational attention, energy, and resources

Challenging but realistic.

•When goals are unrealistic,
– They set employees up for failure and lead to a decrease in employee
morale
•However, if goals are too easy,
– Employees may not feel motivated
•The best quality programs start with extremely ambitious goals
– That challenge employees to meet high standards
•Stretch goals are extremely ambitious but realistic goals that
challenge employees to meet high standards
•

Linked to rewards
•The impact of goals depends on
– The extent to which salary increases, promotions, and other rewards are
based on goal achievement
•People who attain goals should be rewarded
•Employees pay attention to
– What gets noticed and rewarded in the organization

Management by Objectives
• Described by famed management scholar Peter Drucker in his
1954 book, The Practice of Management,
• Management by objectives has remained a popular and
compelling method
– For defining goals and monitoring progress toward achieving them
• Management by objectives (MBO)
– A system whereby managers and employees define goals for every
department, project, and person and use them to monitor subsequent
performance
• A model of the essential steps of the MBO system is presented in
Exhibit 7.6
• Four major activities make MBO successful:

7.6 Model of the MBO Process
• Defined in 1954 by Peter Drucker
• Method for defining and monitoring goals
Set goals.
•Setting goals
– The most difficult step in MBO and should involve employees at
all levels
•A good goal should be
– Concrete and realistic, provide a specific target and time frame,
and assign responsibility.
•Mutual agreement between employee and supervisor creates
– The strongest commitment to achieving goals
•

Develop action plans

•An action plan
– The course of action needed to achieve the stated goals
•Action plans are made for
– Both individuals and departments

Review progress.
•A periodic progress review is important
– To ensure action plans are working
•These reviews can occur informally between managers
and subordinates,
– Where the organization may wish to conduct three-, six-, or
nine-month reviews during the year
•This periodic checkup allows managers and employees to
see
– Whether they are on target or whether corrective action is
needed
• Managers and employees
– Should not be locked into predefined behavior and
– Must be willing to take whatever steps are necessary
to produce meaningful results
• The point of MBO
– To achieve goals
• The action plan can be changed whenever goals are not
being met

Appraise overall performance.

•The final step in MBO
– To evaluate whether annual goals have been achieved for
both individuals and departments
•Success or failure to achieve goals can be
– Part of the performance appraisal system and the designation
of salary increases and other rewards
•The appraisal of departmental and overall corporate
performance shapes
– Goals for the next year
•The MBO cycle repeats itself on an annual basis
• The specific application of MBO must fit
– The needs of each company
• Many companies, including Intel, Tenneco, Black & Decker, and
DuPont,
– Have adopted MBO, and most managers think MBO is an effective
management tool
• Managers believe
– They are better oriented toward goal achievement when MBO is used
• In recent years, the U.S. Congress required that
– Federal agencies use a type of MBO system to focus government
employees on achieving specific outcomes
• Like any system, MBO achieves benefits when used properly
– But results in problems when used improperly

7.7 MBO Benefits
• The benefits of the MBO process can be many
• Corporate goals are more likely to be achieved
– When they focus on manager and employee efforts
• Using a performance measurement system, such
as MBO,
– Helps employees see how their jobs and
performance contribute to the business, giving them
a sense of ownership and commitment

• Performance is improved when employees are
committed to attaining the goal, are motivated
– Because they help decide what is expected, and are free to be
resourceful
• Goals at lower levels are aligned with and enable the
attainment of goals at top management levels
• Problems with MBO occur
– When the company faces rapid change
• The environment and internal activities must have
– Some stability for performance to be measured against goals

Single-Use and Standing Plans
• Single‑use plans
– Be developed to achieve objectives that are not likely to be repeated in
the future
– Include both programs and projects
• Standing plans are used
– To provide guidance for tasks performed repeatedly within the
organization
• The primary standing plans
– Organizational policies, rules, and procedures.
– Pertain to such matters as employee illness, absences, smoking, discipline,
hiring, and dismissal.
• Many companies are discovering a need to develop standing
plans regarding the use of social media

Single-Use Plans vs. Standing Plans
Single-Use Plans
– Achieve one-time goal
– Program/Project: building a headquarters,
converting paper files to digital, renovating
the office, setting up a new company intranet
Standing Plans
– Ongoing plans
– Policies, rules, procedures
Major Types of Single-Use and Standing
Plans

Benefits and Limitations of Planning
• Goals and plans provide a source of motivation and

commitment
• Goals and plans guide resource allocation (budgeting)
• Goals and plans are a guide to action (specific targets)
• Goals and plans set a standard of performance
• Goals and plans can create a false sense of certainty
• Goals and plans may cause rigidity in a turbulent
environment
• Goals and plans can get in the way of intuition and
creativity
51
Benefits
Goals and plans provide a source of motivation and
commitment.
•Planning can reduce uncertainty for employees and clarify
what they should accomplish
•Lack of a clear goal hampers motivation
– Because people don’t understand what they’re working toward
Goals and plans guide resource allocation.

•Planning helps managers decide where they need to allocate
resources, such as employees, money, and equipment
•
Goals and plans are a guide to action.

•Planning
– Focuses attention on specific targets and directs employee efforts toward
important outcomes
– Helps managers and other employees know what actions they need to take to
achieve the goal
Goals and plans set a standard of performance.
• Because planning and goal setting define desired outcomes,
– They also establish performance criteria so managers can measure whether things
are on or off track
•Goals and plans provide a standard of assessment

Limitations of Planning
Goals and plans can create a false sense of certainty.
• Having a plan can give managers a false sense that they know what the future
will be like
•However all planning is based on assumptions, and managers can’t know what
the future holds for their industry or for their competitors, suppliers and
customers
Goals and plans may cause rigidity in a turbulent environment.
•A related problem is that planning can lock the organization into specific goals,
plans, and time frames, which may no longer be appropriate
•Managing under conditions of change and uncertainty requires a degree of
flexibility

Goals and plans can get in the way of intuition and creativity.
•Success often comes from creativity and intuition, which can be
hampered by too much routine planning
•For example, during the process of setting goals in the MBO
process, employees might play it safe to achieve objectives rather
than offer creative ideas
•Similarly, managers sometimes squelch creative ideas from
employees that do not fit with predetermined action plans

Planning for a Turbulent Environment
Contingency Planning
•When organizations are operating in a highly uncertain environment or
dealing with long time horizons,
– Sometimes planning can seem like a waste of time.
•Indeed, inflexible plans may hinder rather than help an organization’s
performance in the face of rapid technological, social, economic, or other
environmental change
•In these cases, managers can develop multiple future alternatives
– To help them form more adaptive plans
• Contingency plans
– Company responses to be taken in case of emergencies , setbacks or unexpected
conditions
•Contingency plans cover such situations as
– Catastrophic decreases in sales or prices, and loss of important managers
• Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 56

• To develop contingency plans, managers identify

– Important factors in the environment,
• Such as possible economic downturns, declining markets,
increases in cost of supplies, new technological
developments, or safety accidents
• Managers then forecast
– A range of alternative responses to the most likely
high-impact contingencies, focusing on the worst
case

• For example, if sales fall 20 percent and prices drop 8 percent,

what will the company do?
• Managers can develop contingency plans that might include
– Layoffs , emergency budgets, new sales efforts, or new markets.
• A real-life example comes from FedEx,
– Which has to cope with some kind of unexpected disruption to its service
somewhere in the world on a daily basis
• In one recent year alone, managers activated contingency plans
related to
– More than two dozen tropical storms, an air traffic controller strike in
France, and a blackout in Los Angeles.
• The company also has contingency plans in place for events
– Such as labor strikes, social upheavals in foreign countries, or incidents of
terrorism
Building Scenarios
• Scenario building involves
– Looking at trends and discontinuities and
– Imagining possible alternative futures to build a framework within which
unexpected future events can be managed.
•Rather than looking only at history and thinking about what has
been,
– Managers think about what could be
•The events that cause the most damage to companies
– Those that no one even conceived of, such as the collapse of the World
Trade Center towers in New York due to terrorist attack
•Managers can’t predict the future,
– But they can rehearse a framework within which future events can be
managed
• With scenario building, a broad base of managers

mentally rehearses
– Different scenarios based on anticipating varied changes that
could impact the organization
• Scenarios
– Be like stories that offer alternative vivid pictures of what the
future will look like and how managers will respond.
• Typically, two to five scenarios are developed for each
set of factors, ranging from the most optimistic to the
most pessimistic view

Crisis Planning
•Surveys of companies’ use of management techniques reveal that
– The use of contingency and scenario planning surged after the September 11,
2001, terrorist attacks in the United States and has remained high ever since,
reflecting a growing emphasis on managing uncertainty
• Some firms also engage in crisis planning to enable them to cope with
unexpected events
– That are so sudden and devastating that they have the potential to destroy the
organization
• If managers aren’t prepared with a quick and appropriate response
•Although crises may vary,
– A carefully thought-out and coordinated plan can be used to respond to any
disaster
•In addition, crisis planning reduces
– The incidence of trouble, much like putting a good lock on a door reduces
burglaries

• Some crises are inevitable no matter how well prepared an organization is

• When a crisis hits,
– A rapid response is crucial
• The team should be able to immediately implement the crisis management
plan,
– So training and practice are important
• At this point it becomes critical for the organization to speak with one voice
– So that employees, customers, and the public do not get conflicting stories about what
happened and what the organization is doing about it
• After ensuring the physical safety of people,
– The next focus should be on responding to the emotional needs of employees, customers,
and the public
• Organizations should also strive to give people a sense of security and
belonging

7.9 Essentials Stages of Crisis Planning
Crisis Prevention
•The crisis prevention stage involves activities managers undertake
– To try to prevent crises from occurring and to detect warning signs of potential crises
• Although unexpected events and disasters will happen,
– Managers should do everything they can to prevent crises
• A critical part of the prevention stage
– Building trusting relationships with key stakeholders such as employees, customers,
suppliers, governments, unions, and the community.
•By developing favorable relationships,
– Managers can often prevent crises from happening and respond more effectively to those
that cannot be avoided
•Good communication helps managers identify problems early
– So they do not turn into major issues
•
•
Crisis Preparation
• Preparation includes
– Designating a crisis management team and
spokesperson,
– Creating a detailed crisis management plan, and
– Setting up an effective communications system
•Some companies are setting up crisis management
offices, with high-level leaders who report
direction to the CEO

• The crisis management team

– A cross-functional group of people who are
designated to swing into action if a crisis occurs
– Be closely involved in creating the crisis management
plan they will implement if a crisis occurs
• A spokesperson should be designated who will
be the voice of the company during the crisis
•

• The crisis management plan

– A detailed written plan that specifies the steps to be taken,
and by whom, if a crisis occurs
• The plan should include the steps for dealing with
various types of crises,
– Such as natural disasters like fires or earthquakes, normal
accidents like economic crises or industrial accidents, and
abnormal events such as product tampering or acts of
terrorism.
• The plan should be a living, changing document
– That is regularly reviewed, practiced, and updated as needed

• A command center serves as a place for the crisis

management team
– To meet, gather data and monitor incoming
information, and disseminate information to the
media

• Contingency Planning
– Planning for emergencies, setbacks, or unexpected
conditions
• Building Scenarios
– A forecasting technique to look at current trends and
visualize future possibilities
• Crisis Planning
– Sudden, devastating, unexpected events

Innovative Approaches to Planning
• A fresh approach to planning

– To involve everyone in the organization, and sometimes
outside stakeholders as well, in the planning process
• The evolution to a new approach began with a shift to
decentralized planning,
– Planning experts work with managers in major divisions or
departments to develop their own goals and plans
• Managers throughout the company come up with their
own creative solutions to problems and become more
committed to following through on the plans

• As the environment became even more volatile,

– Top executives saw the benefits of pushing decentralized planning even
further,
• By having planning experts work directly with line managers and front-line employees to
develop dynamic plans that meet fast-changing needs
• In a complex and competitive business environment,
– Strategic thinking and execution become the expectation of every
employee
• Planning comes alive
– When employees are involved in setting goals and determining the means
to reach them
•

INNOVATIVE APPROACHES TO PLANNING
Set Stretch Goals for Excellence

•Stretch goals are reasonable
– Yet highly ambitious goals that are so clear,
compelling, and imaginative that they fire up
employees and engender excellence
•They are typically so far beyond the current levels
– That people have to be innovative to find ways to
reach them
•
• Goals must be seen as achievable

• Like Big Hairy Audacious Goals (BHAG) from 1996 article on
building your vision
• Since then, it has evolved to a term used to describe
– Any goal that is so big, inspiring, and outside the prevailing paradigm that
it hits people in the gut and shifts their thinking
• At the same time, however, goals must be seen as achievable or
employees will be discouraged and demotivated
• As times move faster and become more turbulent, these are
important

• Stretch goals and BHAGs have become extremely important

– Because things move fast
• A company that focuses on gradual,
– Incremental improvements in products, processes, or systems will get left
behind
• Managers can use these goals to compel employees
– To think in new ways that can lead to bold, innovative breakthroughs
• Motorola used stretch goals
– To achieve Six Sigma quality, which has now become the standard for
numerous companies
– Managers first set a goal of a tenfold increase in quality over a two-year
period
• After this goal was met,
– They set a new stretch goal of a hundredfold improvement over a four-
year
Copyright period
©2012 by South-Western, a division of Cengage Learning. All rights reserved. 74
Performance Dashboard
• A business performance dashboard
– A visual display that helps executives keep track of key performance
metrics,
• Such as sales in relation to targets, number of products on back order, or
percentage of customer service calls resolved within specified time periods
• Some dashboard systems incorporate software that lets users
perform what-if scenarios
– To evaluate the impact of various alternatives for meeting goals

Deploy Intelligence Teams

•An intelligence team
– A cross-functional group of managers and employees, usually
led by a competitive intelligence professional
•Work together to gain a deep understanding of specific
business issue, with the aim of presenting insights,
possibilities and recommendations about goals and plans
related to that issue
•Useful when the organization confronts a major
intelligence challenge
• For example, consider a large financial services firm that learns

that an even-larger rival is potentially moving to compete directly
with one of its major profit-generating businesses
• Top managers might form an intelligence team
– To identify when and how this might happen and how it might affect the
organization
• Intelligence teams can provide insights that enable managers to
make more informed decisions about goals, as well as to devise
contingency plans and scenarios related to major strategic issues

Concluding Remarks [Lee, 2013]
• Strategic Planning serves a good starting point:
– Strategic Planning such as MBO, etc. may not be perfect in the
real world.
– However, we have to get started with something.
• A manager must be flexible:
– Be willing to adapt the strategic plan to new environment: new
competition, new law, new customers, new technologies, etc.
– Strategic planning must not discourage employees’ creativity
and imagination.
– A manager must develop a contingency plan in conjunction with
the strategic plan; expect the unexpected outcome; be willing to
admit a possibility of failure.

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Chapter 7

Managerial Planning and Goal Setting

Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 1

• After studying this chapter, students should be

• Define the characteristics of effective goals.

Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 3

• All of the other management functions

Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 4

A goal is a desired future state

• Goals are important

Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 6

• Planning at each level supports the other levels

• The planning process starts with a formal mission

Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 9

• The overall planning process prevents managers

Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 11

• The process begins

Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 12

• Third, managers lay out the operational factors needed

Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 14

Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 15

Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 16

• Strategic goals, sometimes called official goals,

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• Tactical plans might include

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• Effectively designed organizational goals are aligned

• Four key areas that contribute to a firm’s long-term success

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• The organization has learning and growth goals

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• In a real-life organization, the strategy map

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• Managers use operational goals to direct

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Specific and measurable

Defined time period.

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Cover key result areas

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Challenging but realistic.

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Develop action plans

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Appraise overall performance.

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• Goals and plans provide a source of motivation and

Goals and plans guide resource allocation.

Goals and plans are a guide to action.

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