Chapter Seven - Basic Elements of Planning and Decision Making
Management 309 with Wesson at Texas A&M University
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Decision Making
* the cornerstone of planning
* the catalyst that drives the planning process
* underlies every aspect of setting goals and formulating plans
Planning
* how orgs do things
* all orgs plan, but not in the same fashion
* all goals require plans to guide in their environment
* all goals are tied to higher goals and plans
* plans come from goals and tell how to get there
Organizational Goal Purposes
* provide guidance and a unified direction for people in the org
* have a strong affect on the quality of other aspects of planning
* serve as a source of motivation for employees of the org
* provide a mechanism for evaluation and control of the org
* example: goal of a 4.0......plan on an A-average on 4 tests
Kinds of Goals by Level
- Mission Statement: a statement of an org's fundamental purpose
- Strategic Goals: set by and for top mgmt of the org that address broad, general issues; big picture
- Tactical Goals: set by and for middle managers; focus on how to operationalize actions to strategic goals
- Operational Goals: set by and for lower level managers to address issues associated with tactical goals; day-to-day outlook
Kinds of Goals by Area and Time Frame
- goals set for the different functional areas of the org
- goals set for long-term (>5yrs; strategic), intermediate-term (1-5yrs; tactical), or short-term (<1yr; operational) time frames and for explicit time frames or open-ended
-generalizations, can change
Criteria for Effective Goals
1. Specific and measurable (not always number-based)
- increase profits by 2%, etc
2. cover key result areas (measures success)
- financial performance, customer satisfaction, internal processes
3. challenging but realistic
- 3M: 30% sales come from products introduced in past 4yrs (old standard was 25%)
4. defined time period
5. linked to rewards
- pay increase, promotion
Responsibilities of Setting Goals
* Who sets goals?
- all managers should be involved in the goal-setting process
- managerial responsibility for goal setting should correspond to the manager's level in the org
* Managing Multiple Goals
- optimizing allows managers to balance and reconcile inconsistent or conflicting goals
- benefits everyone while blending differences
- managers can pursue one goal and exclude all others or seek a mid-range goal
Organizational Goals for a Regional Fast-Food Chain
* strategic --> tactical --> operational
Strategic Plans
* a general plan outlining resource allocation, priorities, and action steps to achieve strategic goals
* plans are set by and for top management
* long-range plans (5 or more years)
Tactical Plans
* a plan aimed at achieving the tactical goals set by and for middle management
* intermediate plans (usually cover 1-5yrs and are the principal focus of org planning efforts)
Operational Plans
* plans set by and for lower-level managers
* have a short-term focus (one year or less)
* include action plans and reaction (contingency) plans
Responsibilities for Planning (card 1)
* Planning Staff: full time job; gather info, coordinate planning activities, and take a broader view than individual managers
* Planning Task Force: gather together, achieve purpose, and disband; created when the org wants a special circumstance addressed
* Board of Directors: establishes corporate mission and strategy; may engage in strategic planning
* Chief Executive Officer: president or chair of BOD; has a major role in the planning process and implements the strategy; sets the org vision
Responsibilities for Planning (card 2)
* Executive Committee: composed of top executives within the org; meet regularly for input to the CEO and review strategic plans
* Line Management: persons with formal authority and responsibility for management of the org; help to formulate strategy by providing information; responsible for executing the plans of top mgmt
Contingency Planning and Crisis Mgmt
* CP: the determination of alternative courses of action to be taken if an intended plan is unexpectedly disrupted or rendered inappropriate; planning for disasters like hurricanes or Y2K (banks crashing in year 2000); plans help managers to cope with uncertainty and change; cannot prepare for every event
*CM: what to do when a disaster actually happens; the set of procedures the org uses in the event of a disaster or other uncertainty
Movie Clip - Apollo 13
* contingency planning and crisis management
* rising CO2 levels
Operational Plan: Single Use
* developed to carry out a course of action not likely to be repeated in the future
* program: for large set of activities
* project: contains less scope and complexity
* ex: Black and Decker converted 300 GE products; each product conversion was a PROJECT and the entire conversion process was a PROGRAM
Operational Plan: Standing Plan
* developed for activities that recur regularly over a set period of time
* policy: broadest plan; specifies the orgs general response to a designated problem or situation; ex: only hire people over 15
* standard operating procedure: outlines steps to be followed in particular circumstances; steps to follow to be successful; directions; ex: baking recipe
* rules and regulations: describing exactly how specific activities are to be carried out; most narrow plan
Barriers to Goal Setting and Planning
* as part of managing the goal setting and planning process, managers must understand the barriers that can disrupt them and know how to overcome them
* Barriers: inappropriate goals, improper reward system, dynamic and complex environment, reluctance to establish goals, resistance to change, constraints
* Overcome: understanding the purpose of goals and planning, communication and participation (most effective way), consistency, revision, updating, effective reward system
Using Goals to Implement Plans
* Management By Objectives (MBO): a formal goal-setting process, effective technique for integrating goal setting and planning by giving subordinates a voice and clarifying what they are expected to accomplish
* starting the formal goal-setting program --> establishment of org goals and plans --> collaborative goal setting/planning --> communication/meeting/verifying/counseling/resources --> periodic view --> evaluation
Effectiveness of Formal Goal Setting: Strengths (Success)
* improved employee motivation
* enhances communication
* objective performance appraisals
* focuses attention on appropriate goals
* provides a systematic management philosophy
* buy-in: employees feel like they have a voice
* helps identify managerial talent
* facilitates control of org
Effectiveness of Formal Goal Setting: Weaknesses (Failure)
* poor implementation of the goal setting process
* lack of top-mgmt support for goal setting ("trickle-down effect": if its not done at top level then it wont be done at lower level)
* delegation of the goal-setting process to lower levels
* overemphasis on quantitative goals
* too much paperwork and record keeping
* takes a lot of time
About this deck
About StudyBlue
STUDYBLUE makes things that make you better at school.
Things like online flashcards with photos and audio.
Things like personalized quizzes and friendly reminders about when (and what) to study next.
Think of it as a digital backpack™: access to all of your study materials online and on your phone.
STUDYBLUE exists to make studying efficient and effective for every student, for free. Join us.
“I have used this website for three exams, and I see a huge difference in my test results.”
Naj
Naj