Planning and Goal Setting
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CHAPTER 7 PLANNING AND GOAL SETTING CHAPTER OUTLINE Does Goal Goal Setting Fit Fit Your Your Management Management Style? Style? I. Goal Goal-S -Set etti ting ng and and Pla Plann nnin ing g Over Overvi view ew A. Levels Levels of Goal Goalss and and Plans Plans B. The Organi Organizat zation ional al Planning Planning Proces Processs II. II. Goal Goal-S -Set etti ting ng in in Orga Organi niza zati tion onss A. Organ Organiza izatio tional nal Missi Mission on B. Goal Goalss and and Plan Planss C. Align Align Goals Goals sing sing a Stra Strateg teg! ! Ma" New Manager Self-Test: Self-Test: Your Approach to Stuying III. III. O"erat O"eration ional al Planni Planning ng A. Criter Criteria ia for #ffec #ffectiv tivee Goals Goals B. Manage$ Manage$ent ent %! O%&e O%&ecti ctives ves 'MBO 'MBO(( C. SingleSingle-se se and Standi Standing ng Plans Plans I). I). Benefits Benefits and Li$it Li$itation ationss of Planning Planning ). Planni Planning ng for for a T*r% T*r%*le *lent nt #nvi #nviron ron$en $entt A. Conting Contingenc enc! ! Planni Planning ng B. B*il B*ildi ding ng Scen Scenar ario ioss C. Cris Crisis is Plan Planni ning ng )I. Innova Innovativ tivee A""roac A""roaches hes to Planning Planning A. Set Stret Stretch ch Goals Goals for #+cell #+cellence ence B. se Perfor Perfor$an $ance ce ,ash% ,ash%oar oards ds C. ,e"lo! ,e"lo! Intell Intellige igence nce Tea$ Tea$ss
ANNOTATED LEARNING OBJECTIVES After st*d!ing this cha"ter st*dents sho*ld %e a%le to /. Define goals goals an plans plans an e!plain e!plain the relation relationship ship "etween "etween them# A goal is a desired f*t*re state that the organization atte$"ts to realize. A "lan is a %l*e"rint for goal achieve$ent and s"ecifies the necessar! reso*rce allocations sched*les tas0s and other actions. The ter$ "lanning *s*all! incor"orates incor"orates %oth ideas and $eans deter$ining deter$ining the organization1s organization1s goals and defining the $eans for achieving the$. of organi%ation organi%ational al mission an how it it influences influences goal setting setting an 2. $!plain the concept of planning# planning#
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Chapte 7
The overall "lanning "rocess %egins with a $ission state$ent which descri%es the organization1s reason for e+istence. The $ission descri%es the organization1s val*es as"irations and reason for %eing. A well-defined $ission is the %asis for develo"$ent of all s*%se8*ent goals and "lans. 9itho*t a clear $ission goals and "lans $a! %e develo"ed ha"hazardl! and not ta0e the organization in the direction it needs to go. Beca*se of $ission state$ents e$"lo!ees c*sto$ers s*""liers and stoc0holders 0now the co$"an!1s stated "*r"ose and val*es. &ategori%e the types of goals an organi%ation shoul ha'e#
:. 9ithin the organization there are three levels of goals strategic tactical and o"erational.
Strategic goals are %road state$ents of where the organization wants to %e in the f*t*re. Strategic goals "ertain to the organization as a whole and are the stated intentions of what the organization wants to achieve. Tactical goals define the res*lts that $a&or divisions and de"art$ents within the organization $*st achieve. Tactical goals a""l! to $iddle $anage$ent and descri%e what $a&or s*%*nits $*st do in order for the organization to achieve its overall goals. (perational goals descri%e s"ecific res*lts e+"ected fro$ de"art$ents wor0 gro*"s and individ*als. O"erational goals are "recise and $eas*ra%le.
;. $!plain how managers use strategy maps to align goals# A strateg! $a" is a vis*al re"resentation of the 0e! drivers of an organization1s s*ccess and shows how s"ecific goals and "lans in each area are lin0ed. Strateg! $a"s "rovide a "owerf*l wa! for $anagers to see the ca*se-and-effect relationshi"s a$ong goals and "lans. Managers *se the strateg! $a" to align o"erational goals with tactical goals and to align tactical goals with strategic goals. <. Define the characteristics of effecti'e goals# Organizational goals at the strategic tactical and o"erational levels sho*ld %e s"ecific and $eas*ra%le= cover 0e! res*lt areas= %e challenging %*t realistic= incl*de a defined ti$e "eriod= and %e lin0ed to rewards. 5. Descri"e the four essential steps in the management "y o")ecti'es *M+(, process# Manage$ent-%!-o%&ectives 'MBO( is a $ethod where%! $anagers and e$"lo!ees define goals for ever! de"art$ent "ro&ect and "erson and *se the$ to control s*%se8*ent "erfor$ance. >o*r $a&or activities $*st occ*r in order for MBO to %e s*ccessf*l.
Setting goals. This is the $ost diffic*lt ste" in MBO. A good goal sho*ld %e concrete and realistic "rovide a s"ecific target and ti$e fra$e and assign res"onsi%ilit!. Goals $a! %e 8*antitative or 8*alitative. Goals &ointl! derived %! $*t*al agree$ent %etween e$"lo!ee and s*"ervisor create the strongest co$$it$ent to achieving goals. De'eloping action plans . An action "lan defines the co*rse of action needed to achieve the stated goals. Action "lans are $ade for %oth individ*als and de"art$ents.
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e'iewing progress . A "eriodic "rogress review is i$"ortant to ens*re that action "lans are wor0ing. This "eriodic chec0*" allows $anagers and e$"lo!ees to deter$ine if the! are on target or if corrective action is necessar!. The "oint of MBO is to achieve goals. The action "lan can %e changed whenever goals are not %eing $et. Appraising o'erall performance . The final ste" in MBO is to deter$ine if ann*al goals have %een achieved for %oth individ*als and de"art$ents. S*ccess or fail*re to achieve goals can %eco$e "art of the "erfor$ance a""raisal s!ste$ and the designation of salar! increases and other rewards. The a""raisal of de"art$ental and overall cor"orate "erfor$ance sha"es goals for the co$ing !ear.
The MBO c!cle re"eats itself on an ann*al %asis. The s"ecific a""lication of MBO $*st fit the needs of each co$"an!. ?. &ompare an contrast single-use plans an staning plans# Single-*se "lans are develo"ed to achieve a set of goals that are not li0el! to %e re"eated in the f*t*re. Single-*se "lans t!"icall! incl*de %oth "rogra$s and "ro&ects. A "rogra$ is a "lan for attaining an i$"ortant one-ti$e organizational goal. A "ro&ect is also designed to achieve a one-ti$e goal %*t generall! is short-ter$ and has narrow o%&ectives. Standing "lans are ongoing "lans that are *sed to "rovide g*idance for tas0s "erfor$ed re"eatedl! within the organization. The "ri$ar! standing "lans are organizational "olicies r*les and "roced*res. Standing "lans generall! "ertain to s*ch $atters as e$"lo!ee illness a%sences s$o0ing disci"line hiring and dis$issal. @. Discuss the "enefits an limitations of planning# The %enefits of "lanning incl*de Goals an plans pro'ie a source of moti'ation an commitment# Planning can red*ce *ncertaint! for e$"lo!ees and clarif! what the! sho*ld acco$"lish. Goals an plans guie resource allocation# Planning hel"s $anagers decide where the! need to allocate reso*rces s*ch as e$"lo!ees $one! and e8*i"$ent. Goals an plans are a guie to action# Planning foc*ses attention on s"ecific targets and directs e$"lo!ee efforts toward i$"ortant o*tco$es. Goals an plans set a stanar of performance# Beca*se "lanning and goal setting define desired o*tco$es the! also esta%lish "erfor$ance criteria so $anagers can $eas*re whether things are on or off trac0.
The li$itations of "lanning incl*de Goals an plans can create a false sense of certainty# aving a "lan can give $anagers a false sense that the! 0now what the f*t*re will %e li0e. Goals an plans may cause rigiity in a tur"ulent en'ironment# A related "ro%le$ is that "lanning can loc0 the organization into s"ecific goals "lans and ti$e fra$es which $a! no longer %e a""ro"riate. Goals an plans can get in the way of intuition an creati'ity# S*ccess often co$es fro$ creativit! and int*ition which can %e ha$"ered %! too $*ch ro*tine "lanning.
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Chapte 7
7. Descri"e contingency planning. scenario "uiling. an crisis planning. an e!plain the importance of each for toay/s managers# Contingenc! "lans define co$"an! res"onses to %e ta0en in the case of e$ergencies set%ac0s or *ne+"ected conditions. Contingenc! "lanning ena%les $anagers to identif! i$"ortant factors in the environ$ent and develo" "lans. The! res"ond 8*ic0l! to %e so$ewhat "roactive even in an *ncertain and d!na$ic environ$ent rather than si$"l! %eing %*ffeted a%o*t %! events. Scenario %*ilding involves loo0ing at c*rrent trends and discontin*ities and vis*alizing f*t*re "ossi%ilities. Managers *se historical data to develo" reasona%le e+"ectations for the f*t*re and to $entall! rehearse different "otential f*t*re scenarios %ased on antici"ating varied changes that co*ld affect the organization. Crisis "lanning incl*des two essential stages crisis "revention and crisis "re"aration. The crisis "revention stage involves activities of $anagers to "revent crises and detect warning signs of "otential crises. The crisis "re"aration stage incl*des all the detailed "lanning to handle a crisis when it occ*rs and a""ointing a crisis $anage$ent tea$ and s"o0es"erson. The tea$ sho*ld %e a%le to i$$ediatel! i$"le$ent the crisis $anage$ent "lan so training and "ractice are i$"ortant. At this "oint it %eco$es critical for the organization to s"ea0 with one voice so that e$"lo!ees c*sto$ers and the "*%lic do not get conflicting stories a%o*t what ha""ened and what the organization is doing a%o*t it. After ens*ring the "h!sical safet! of "eo"le the ne+t foc*s sho*ld %e on res"onding to the e$otional needs of e$"lo!ees c*sto$ers and the "*%lic. Organizations sho*ld also strive to give "eo"le a sense of sec*rit! and %elonging. /4. 0entify inno'ati'e planning approaches that managers use in a fast-changing en'ironment#
Set stretch goals for e!cellence . Stretch goals get "eo"le to thin0 in new wa!s that can lead to %old innovative %rea0thro*ghs. 1se performance ash"oars . Perfor$ance dash%oards hel" e+ec*tives 0ee" trac0 of 0e! "erfor$ance $etrics and hel" all e$"lo!ees trac0 "rogress toward goals see when things are falling short and find innovative wa!s to get %ac0 on co*rse toward reaching s"ecified targets. Deploy intelligence teams. An intelligence tea$ is a cross-f*nctional gro*" of $anagers and e$"lo!ees *s*all! led %! a co$"etitive intelligence "rofessional who wor0 together to gain a dee" *nderstanding of s"ecific %*siness iss*e with the ai$ of "resenting insights "ossi%ilities and reco$$endations a%o*t goals and "lans related to that iss*e. Intelligence tea$s are *sef*l when the organization confronts a $a&or intelligence challenge.
LECTURE OUTLINE D($S G(A2 S$TT0NG F0T Y(1 MANAG$M$NT STY2$?
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Most organizations have goal setting and review s!ste$s that new $anagers *se. ot ever!one thrives *nder a disci"lined goal-setting s!ste$ %*t setting goals and assessing res*lts are tools that can enhance a new $anager1s i$"act. This e+ercise hel"s st*dents deter$ine the e+tent to which the! have alread! ado"ted the disci"lined *se of goals in their lives and in their wor0.
I. GOAL-S#TTIG A, PLAIG O)#6)I#9 A goal is defined as a desired f*t*re state that the organization atte$"ts to realize. Goals are i$"ortant %eca*se the! define the "*r"ose of an organization. A plan is a %l*e"rint for goal achieve$ent and s"ecifies the necessar! reso*rce allocations sched*les tas0s and other actions. Goals s"ecif! f*t*re ends= "lans s"ecif! toda!1s $eans. The word planning *s*all! incor"orates %oth ideas= it $eans deter$ining the organization1s goals and defining the $eans for achieving the$. A. Levels of Goals and Plans
#+hi%it ?./
/. To" $anagers are res"onsi%le for esta%lishing strategic goals and "lans that reflect a co$$it$ent to %oth organizational efficienc! and effectiveness. Tactical goals and "lans are the res"onsi%ilit! of $iddle $anagers. (perational "lans identif! the s"ecific "roced*res or "rocesses needed at lower levels of the organization. >rontline $anagers and s*"ervisors develo" o"erational "lans that foc*s on s"ecific tas0s and "rocesses and that hel" $eet tactical and strategic goals. 2. Planning at each level s*""orts the other levels. ,isc*ssion *estion D< A new "usiness 'enture must e'elop a comprehensi'e "usiness plan to "orrow money to get starte# &ompanies such as Fe$! an Ni3e say they i not follow the original plan closely# Does that mean that e'eloping the plan was a waste of time for these e'entually successful companies? OT#S EEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE EEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE EEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE B. The Organizational Planning Process
#+hi%it ?.2
/. The overall "lanning "rocess "revents $anagers fro$ thin0ing $erel! in ter$s of da!-to-da! activities. 2. The "lanning "rocess incl*des five ste"s develo" the "lan= translate the "lan into action= la! o*t o"erational factors needed to achieve goals= e+ec*te the "lan= and $onitor and review "lans to learn fro$ res*lts and shift "lans as needed. II. GOAL-S#TTIG I O6GAIFATIOS
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Chapte 7
A. Organizational Mission
#+hi%it ?.:
/. At the to" of the goal hierarch! is the !i""ion the organization1s reason for e+istencethat descri%es the organization1s val*es as"irations and reason for %eing. 2. The for$al !i""ion "tate!ent is a %roadl! stated definition of "*r"ose that disting*ishes the organization fro$ others of a si$ilar t!"e. The content often foc*ses on the $ar0et and c*sto$ers and identifies desired fields of endeavor. So$e $ission state$ents descri%e co$"an! characteristics s*ch as cor"orate val*es "rod*ct 8*alit! location of facilities and attit*de toward e$"lo!ees. B. Goals and Plans /. Stategi# goal" are %road state$ents descri%ing where the organization wants to %e in the f*t*re. So$eti$es called official goals the! "ertain to the entire organization rather than to s"ecific divisions or de"art$ents. Stategi# plan" define the action ste"s %! which the co$"an! intends to attain strategic goals. A strategic "lan is a %l*e"rint that defines organizational activities and reso*rce allocations. Strategic "lanning tends to %e long ter$. 2. Ta#ti#al goal" are the res*lts that $a&or divisions and de"art$ents within the organization intend to achieve. Tactical goals a""l! to $iddle $anage$ent and descri%e what $a&or s*%*nits $*st do for the organization to achieve its overall goals. Ta#ti#al plan" define what $a&or de"art$ents and organizational s*%*nits will do to i$"le$ent the organization1s strategic "lan. The! tend to %e for a shorter ti$e "eriod. :. Opeational goal" are the s"ecific res*lts e+"ected fro$ de"art$ents wor0 gro*"s and individ*als. Opeational plan" are develo"ed at the lower levels of the organization to s"ecif! action "lans toward achieving o"erational goals and to s*""ort tactical "lans. C. Align Goals sing a Strateg! Ma"
#+hi%it ?.;
/. #ffectivel! designed organizational goals are aligned into a hierarch! in which the achieve$ent of goals at lower levels "er$its the attain$ent of higher-level goals. O"erational goals lead to the achieve$ent of tactical goals which lead to the attain$ent of strategic goals. Organizational "erfor$ance is an o*tco$e of how well these interde"endent ele$ents are aligned so that individ*als tea$s de"art$ents and so forth are wor0ing in concert to attain s"ecific goals that *lti$atel! hel" the organization achieve high "erfor$ance and f*lfill its $ission. 2. Stateg$ !ap" are vis*al re"resentations of the 0e! drivers of an organization1s s*ccess and show how s"ecific goals and "lans in each area are lin0ed. The! "rovide a "owerf*l wa! for $anagers to see the ca*se-and-effect relationshi"s a$ong goals and "lans.
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,isc*ssion *estion D: (ne of the "enefits of a strategy map is that goals an how they are lin3e can "e communicate clearly to e'eryone in the organi%ation# Does a minimum-wage maintenance wor3er in a hospital really nee to unerstan any goals "eyon 3eeping the place clean? Discuss# OT#S EEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE EEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE EEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE N$4 MANAG$ S$2F-T$ST: Y(1 A55(A&6 T( ST1DY0NG
A st*dent1s a""roach to st*d!ing $a! %e a "redictor of his or her "lanning a""roach as a new $anager. An i$"ortant "art of a new $anager1s &o% is to "lan ahead which involves gras"ing the %igger "ict*re. This e+ercise hel"s st*dents identif! their a""roaches to st*d!ing as %eing foc*sed on either the c*rrent details or the %ig "ict*re. III. OP#6ATIOAL PLAIG A. Criteria for #ffective Goals
#+hi%it ?.<
/. Specific an measura"le . 9hen "ossi%le goals sho*ld %e e+"ressed in 8*antitative ter$s. )ag*e goals tend not to $otivate e$"lo!ees. 2. Define time perio# Goals sho*ld s"ecif! the ti$e "eriod over which the! will %e achieved. A ti$e "eriod is a deadline on which goal attain$ent will %e $eas*red. :. &o'er 3ey result areas# He! res*lt areas are those ite$s that contri%*te $ost to co$"an!1s "erfor$ance. He! res*lt areas sho*ld incl*de %oth internal and e+ternal c*sto$ers. ;. &hallenging "ut realistic# The %est 8*alit! "rogra$s start with e+tre$el! a$%itio*s goals that challenge e$"lo!ees to $eet high standards. 9hen goals are *nrealistic the! set e$"lo!ees *" for fail*re and lead to decreasing e$"lo!ee $orale. If goals are too eas! e$"lo!ees $a! not feel $otivated. Stretch goals are e+tre$el! a$%itio*s %*t realistic goals that challenge e$"lo!ees to $eet high standards. <. 2in3e to rewars# The i$"act of goals de"ends on the e+tent to which salar! increases "ro$otions and other rewards are %ased on goal achieve$ent. Peo"le who attain goals sho*ld %e rewarded. B. Manage$ent %! O%&ectives 'MBO(
#+hi%it ?.5
/. %anage!ent &$ o&'e#ti(e" )%BO* is a $ethod where%! $anagers and e$"lo!ees define o%&ectives for ever! de"art$ent "ro&ect and "erson and *se the$ to $onitor s*%se8*ent "erfor$ance. >o*r $a&or activities $*st occ*r in order for MBO to %e s*ccessf*l. 3 24/5 Cengage Learning. All 6ights 6eserved. Ma! not %e scanned co"ied or d*"licated or "osted to a "*%licl! accessi%le we%site in whole or in "art.
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Chapte 7
a. Set goals# Setting goals is the $ost diffic*lt ste" in MBO and sho*ld involve e$"lo!ees at all levels. A good goal sho*ld %e concrete and realistic "rovide a s"ecific target and ti$e fra$e and assign res"onsi%ilit!. M*t*al agree$ent %etween e$"lo!ee and s*"ervisor creates the strongest co$$it$ent to achieving goals. %. De'elop action plans# An action "lan defines the co*rse of action needed to achieve the stated goals. Action "lans are $ade for %oth individ*als and de"art$ents. c. e'iew progress# A "eriodic "rogress review is i$"ortant to ens*re that action "lans are wor0ing. This review allows $anagers and e$"lo!ees to see if the! are on target and if corrective action is needed. d. Appraise o'erall performance# The final ste" in MBO is to eval*ate whether ann*al goals have %een achieved for %oth individ*als and de"art$ents. S*ccess or fail*re to achieve goals can %e "art of the "erfor$ance a""raisal s!ste$ and the designation of salar! increases and other rewards. #+hi%it ?.? 2. The %enefits of the MBO "rocess can %e $an!. Cor"orate goals are $ore li0el! to %e achieved when the! foc*s on $anager and e$"lo!ee efforts. Pro%le$s with MBO occ*r when the co$"an! faces ra"id change. The environ$ent and internal activities $*st have so$e sta%ilit! for "erfor$ance to %e $eas*red against goals. :. Management by means 'MBM( foc*ses attention on the $ethods and "rocesses *sed to achieve goals. MBM is %ased on the idea that when $anagers "*rs*e their activities in the right wa! "ositive o*tco$es will res*lt. MBM foc*ses "eo"le on considering the $eans rather than &*st on reaching the goals. ,isc*ssion *estion D; The M+( techni7ue has "een critici%e for putting too much emphasis on achie'ing goals *ens, an not enough on the methos that people use to achie'e them *means,# Do you thin3 this is a flaw in the techni7ue. or in the way managers apply it? 6ow woul you place a "alance emphasis on ens an means? OT#SEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE EEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE EEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE
C. Single-se and Standing Plans
#+hi%it ?.@
/. Single+,"e plan" are develo"ed to achieve o%&ectives that are not li0el! to %e re"eated in the f*t*re. Single-*se "lans incl*de %oth "rogra$s and "ro&ects. 2. Standing plan" are *sed to "rovide g*idance for tas0s "erfor$ed re"eatedl! within the organization. The "ri$ar! standing "lans are organizational "olicies r*les and
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"roced*res. Man! co$"anies are discovering a need to develo" standing "lans regarding the *se of social $edia. ,isc*ssion *estion D/ 4hat strategic plans coul the college or uni'ersity at which you are ta3ing this management course aopt to compete for stuents in the mar3etplace? 4oul these plans epen on the school/s goals? OT#SEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE EEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE EEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE
I). B##>ITS A, LIMITATIOS O> PLAIG A. Benefits of Planning /. Goals an plans pro'ie a source of moti'ation an commitment# Planning can red*ce *ncertaint! for e$"lo!ees and clarif! what the! sho*ld acco$"lish. 2. Goals an plans guie resource allocation# Planning hel"s $anagers decide where the! need to allocate reso*rces s*ch as e$"lo!ees $one! and e8*i"$ent. :. Goals an plans are a guie to action# Planning foc*ses attention on s"ecific targets and directs e$"lo!ee efforts toward i$"ortant o*tco$es. ;. Goals an plans set a stanar of performance# Beca*se "lanning and goal setting define desired o*tco$es the! also esta%lish "erfor$ance criteria so $anagers ca n $eas*re whether things are on or off trac0. B. Li$itations of Planning /. Goals an plans can create a false sense of certainty# aving a "lan can give $anagers a false sense that the! 0now what the f*t*re will %e li0e. 2. Goals an plans may cause rigiity in a tur"ulent en'ironment# A related "ro%le$ is that "lanning can loc0 the organization into s"ecific goals "lans and ti$e fra$es which $a! no longer %e a""ro"riate. :. Goals an plans can get in the way of intuition an creati'ity# S*ccess often co$es fro$ creativit! and int*ition which can %e ha$"ered %! too $*ch ro*tine "lanning.
). PLAIG >O6 A T6BL#T #)I6OM#T A. Contingenc! Planning
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Chapte 7
/. Contingen#$ plan" define co$"an! res"onses to %e ta0en in the case of e$ergencies or set%ac0s. Contingenc! "lans cover s*ch sit*ations as catastro"hic decreases in sales or "rices and loss of i$"ortant $anagers. 2. Managers forecast a range of alternative responses to the most likely high-impact contingencies, focusing on the worst case. ,isc*ssion *estion D? Assume that Southern 1ni'ersity ecies to *8, raise its amission stanars an *9, initiate a "usiness fair to which local townspeople will "e in'ite# 4hat types of plans might it use to carry out these two acti'ities? OT#S EEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE EEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE EEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE B. B*ilding Scenarios /. S#enaio &,ilding involves loo0ing at c*rrent trends and discontin*ities and i$agining "ossi%le alternative f*t*res to %*ild a fra$ewor0 with which *ne+"ected f*t*re events can %e $anaged. 2. 9ith scenario %*ilding a %road %ase of $anagers $entall! rehearses different scenarios %ased on antici"ating the varied changes that co*ld i$"act the organization. Scenarios are li0e stories that offer alternative vivid "ict*res of what the f*t*re will loo0 li0e and how $anagers will res"ond. T!"icall! two to five scenarios are develo"ed for each set of factors ranging fro$ the $ost o"ti$istic to the $ost "essi$istic view. C. Crisis Planning
#+hi%it ?.7
/. Crisis Prevention a. Altho*gh *ne+"ected events and disasters will ha""en $anagers sho*ld do ever!thing the! can to "revent crises. A critical "art of the "revention stage is %*ilding tr*sting relationshi"s with 0e! sta0eholders s*ch as e$"lo!ees c*sto$ers s*""liers govern$ents *nions and the co$$*nit!. %. B! develo"ing favora%le relationshi"s $anagers can often "revent crises fro$ ha""ening and res"ond $ore effectivel! to those that cannot %e avoided. Good co$$*nication hel"s $anagers identif! "ro%le$s earl! so the! do not t*rn into $a&or iss*es. 2. Crisis Pre"aration a. Pre"aration incl*des designating a crisis $anage$ent tea$ and s"o0es"erson creating a detailed crisis $anage$ent "lan and setting *" an effective co$$*nications s!ste$. So$e co$"anies are setting *" crisis $anage$ent offices with high-level leaders who re"ort direction to the C#O. 3 24/; Cengage Learning. All 6ights 6eserved. Ma! not %e scanned co"ied or d*"licated or "osted to a "*%licl! accessi%le we%site in whole or in "art.
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%. The crisis $anage$ent tea$ is a cross-f*nctional gro*" of "eo"le who are designated to swing into action if a crisis occ*rs. The! are closel! involved in creating the crisis $anage$ent "lan the! will i$"le$ent if a crisis occ*rs. A s"o0es"erson sho*ld %e designated. c. The crisis $anage$ent "lan is a detailed written "lan that s"ecifies the ste"s to %e ta0en and %! who$ if a crisis occ*rs. The "lan sho*ld incl*de the ste"s for dealing with vario*s t!"es of crises s*ch as nat*ral disasters li0e fires or earth8*a0es nor$al accidents li0e econo$ic crises or ind*strial accidents and a%nor$al events s*ch as "rod*ct ta$"ering or acts of terroris$. The "lan sho*ld %e a living changing doc*$ent that is reg*larl! reviewed "racticed and *"dated as needed. ,isc*ssion *estion D2 From the information pro'ie in the chapter e!ample. ientify how 4estern Digital Thailan use "oth the pre'ention an the preparation stages of crisis planning# OT#SEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE EEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE EEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE ,isc*ssion *estion D7 Some people say an organi%ation coul ne'er "e prepare; for a isaster such as the shooting at Sany 6oo3 $lementary School. the
)I. IO)ATI)# APP6OAC#S TO PLAIG ,ecentralized "lanning means that planning experts work with managers in major divisions or departments to develop their own goals and plans. Managers throughout the company come up with their own creative solutions to problems and become more committed to following through on the plans 3 24/5 Cengage Learning. All 6ights 6eserved. Ma! not %e scanned co"ied or d*"licated or "osted to a "*%licl! accessi%le we%site in whole or in "art.
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Chapte 7
A. Set Stretch Goals for #+cellence /. Stet#h goal" are reasona%le !et highl! a$%itio*s goals that are so clear co$"elling and i$aginative that the! fire *" e$"lo!ees and engender e+cellence. 2. The! are t!"icall! so far %e!ond the c*rrent levels that "eo"le have to %e innovative to find wa!s to reach the$. a. An e+tension of the stretch goal is the "ig hairy auacious goal or +6AG. %. A BAG is an! goal that is so %ig ins"iring and o*tside the "revailing "aradig$ that it hits "eo"le in the g*t and shifts their thin0ing. B. se Perfor$ance ,ash%oards
#+hi%it ?./4
/. A "usiness performance ash"oar is a vis*al dis"la! that hel"s e+ec*tives 0ee" trac0 of 0e! "erfor$ance $etrics s*ch as sales in relation to targets n*$%er of "rod*cts on %ac0 order or "ercentage of c*sto$er service calls resolved within s"ecified ti$e "eriods. 2. So$e dash%oard s!ste$s incor"orate software that lets *sers "erfor$ what-if scenarios to eval*ate the i$"act of vario*s alternatives for $eeting goals. C. ,e"lo! Intelligence Tea$s /. An intelligen#e tea! is a cross-f*nctional gro*" of $anagers and e$"lo!ees *s*all! led %! a co$"etitive intelligence "rofessional who wor0 together to gain a dee" *nderstanding of a s"ecific %*siness iss*e with the ai$ of "resenting insights "ossi%ilities and reco$$endations a%o*t goals and "lans related to that iss*e. 2. Intelligence tea$s are *sef*l when the organization confronts a $a&or intelligence challenge. ,isc*ssion *estion D@ 2i'ingSocial starte with one aily eal.; a >9= 'oucher for >= worth of foo at a 4ashington D#&#. area restaurant# Since then. the company has grown at "rea3nec3 spee. has @ million mem"ers in 9= countries. an has ac7uire a o%en companies that offer relate eals an ser'ices# 4hy an how might a company such as 2i'ingSocial want to use an intelligence team? Discuss# OT#SEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE EEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE EEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE ,isc*ssion *estion D/4 Goals that are o'erly am"itious can iscourage employees an ecrease moti'ation. yet the iea of stretch goals is propose as a way to get people fire up an moti'ate# As a manager. how might you ecie where to raw the line "etween a goo; stretch goal an a "a; one that is unrealistic? 3 24/; Cengage Learning. All 6ights 6eserved. Ma! not %e scanned co"ied or d*"licated or "osted to a "*%licl! accessi%le we%site in whole or in "art.
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OT#S EEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE EEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE EEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE
S,gge"ted An"-e" to End+o.+Chapte Di"#,""ion /,e"tion" /. 4hat strategic plans coul the college or uni'ersity at which you are ta3ing this management course aopt to compete for stuents in the mar3etplace? 4oul these plans epen on the school/s goals? es strategies will de"end on the school1s goals. >or e+a$"le if a *niversit! ado"ted a goal of increasing the n*$%er of $erit scholars who enroll each !ear fro$ <4 to 54 then strategies co*ld %e to send letters to $erit scholars sched*le v isits of *niversit! re"resentatives at the schools or offer scholarshi"s to entice the st*dents to attend the *niversit!. If the goal is si$"l! to increase the n*$%er of st*dents ad$inistrators co*ld deter$ine what attracts st*dents to the *niversit! and atte$"t to ado"t strategies related to the$. The strategies $ight incl*de the i$"le$entation of highl! visi%le "rogra$s s*ch as changing t*ition rates %*ilding additional dor$itories or striving to field a winning foot%all tea$. 2. From the information pro'ie in the chapter e!ample. ientify how 4estern Digital Thailan use "oth the pre'ention an the preparation stages of crisis planning#
Crisis prevention stage involves activities that managers undertake to try to prevent crises A critical part of the prevention stage is building open, trusting relationships. Co$"an! leaders wor0ed alongside engineers
and front line e$"lo!ees even ta0ing "ersonal ris0s %! engaging in diving o"erations. Good relationshi"s with c*sto$ers $eant so$e agreed to s"ecial "rovisions that deviated fro$ nor$al contract agree$ents. A few da!s %efore the disaster the! "*lled so$e inventor! fro$ the &*st-in-ti$e 'JIT( "rocess at near%! wareho*ses and $oved it to a safer location.
Crisis preparation includes detailed planning to handle a crisis when it occurs. The co$"an! had a "rocess in "lace for s"eeding *" s*""lier
8*alification in case new s*""liers were needed. The crisis %*dget incl*ded f*nding for s$aller s*""liers for re%*ilding or relocating "rod*ction lines. Strong relationshi"s with e$"lo!ees c*sto$ers s*""liers and other sta0eholders hel"ed significantl!. More than <44 9estern ,igital e$"lo!ees incl*ding all of its senior $anagers ret*rned to wor0 d*ring the "ea0 flood "eriod. 9ithin a wee0 o"erations to recover and restore e8*i"$ent were *nderwa!. To li$it the "otential for overreaction and conf*sion a$ong c*sto$ers s*""liers and shareholders all for$al co$$*nications were handled %! head8*arters in the nited States
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Chapte 7
:. (ne of the "enefits of a strategy map is that goals an how they are lin3e can "e clearly communicate to e'eryone in the organi%ation# Does a minimum-wage maintenance wor3er in a hospital really nee to unerstan any goals "eyon 3eeping the place clean? Discuss# A strateg! $a" hel"s the $ini$*$-wage $aintenance wor0er *nderstand how the "rocess goal of 0ee"ing the "lace clean contri%*tes to achieving goals for c*sto$er service and satisfaction and how achieving c*sto$er service and satisfaction goals contri%*te to achieving financial goals that hel" the co$"an! o"ti$ize its val*e to all sta0eholders incl*ding the $ini$*$-wage $aintenance wor0er. 6esearch s*""orts the notion that e$"lo!ees wor0 harder and find $ore $eaning in their wor0 when the! *nderstand how their &o%s fit into the %igger "ict*re of the organization1s goals. ;.
The M+( techni7ue has "een critici%e for putting too much emphasis on achie'ing goals *ens, an not enough on the methos that people use to achie'e them *means,# Do you thin3 this is a flaw in the techni7ue. or in the way managers apply it? 6ow woul you place a "alance emphasis on ens an means?
%anage!ent &$ o&'e#ti(e" )%BO* is a s!ste$ where%! $anagers and e$"lo!ees define o%&ectives for ever! de"art$ent "ro&ect and "erson and *se the$ to $onitor s*%se8*ent "erfor$ance. Goals sho*ld %e derived &ointl! which can %e achieved %! the $*t*al agree$ent %etween e$"lo!ee and s*"ervisor The s*ccess of MBO de"ends on vario*s factors li0e the i$"le$entation of action "lans a "eriodic "rogress review and "erfor$ance a""raisal s!ste$
Cor"orate goals are $ore li0el! to %e achieved when the! foc*s $anager and e$"lo!ee efforts. Pro%le$s with MBO occ*r when the co$"an! faces ra"id change. The environ$ent and internal activities $*st have so$e sta%ilit! for "erfor$ance to %e $eas*red against goals. <.
A new "usiness 'enture must e'elop a comprehensi'e "usiness plan to "orrow money to get starte# &ompanies such as Fe$! an Ni3e say they i not follow the original plan closely# Does that mean that e'eloping the plan was a waste of time for these e'entually successful companies?
o it was not a waste of ti$e for these co$"anies. ,evelo"ing a %*siness "lan also hel"s a co$"an! consider all as"ects of the %*siness. >or e+a$"le an inventor $a! co$e *" with a neat new "rod*ct and not consider where or how to $ar0et it. e $a! not consider financing either. ,evelo"ing a %*siness "lan hel"s the co$"an! devise o"tions not "revio*sl! considered. #ven if the "lan is not followed e+actl! it "rovides $an! other %enefits. 5. 6ow o you thin3 planning in toay/s organi%ations compares to planning 9= years ago? Do you thin3 planning "ecomes more important or less important in a worl where e'erything is changing fast an crises are a regular part of organi%ational life? 4hy? Planning is $*ch $ore diffic*lt in toda!1s organizations than it was 2< !ears ago d*e to increased econo$ic and "olitical *ncertaint! as a res*lt of glo%alization an ever-increasing rate of technological change and increased co$"etition in $an! ind*stries. On the other hand greater ease of co$$*nication a$ong %*siness co$"onents along with increased a%ilit! to trac0 internal and e+ternal activities res*lting fro$ technological advances also $a0e it easier to antici"ate and "lan for f*t*re events that it was 2< !ears ago. 3 24/; Cengage Learning. All 6ights 6eserved. Ma! not %e scanned co"ied or d*"licated or "osted to a "*%licl! accessi%le we%site in whole or in "art.
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Planning %eco$es $ore i$"ortant in a world where ever!thing changes 8*ic0l! and crises are a reg*lar "art of organizational life d*e to ra"idl! changing environ$ental conditions. There is a greater need for fle+i%ilit! and ada"ta%ilit! to $eet each sit*ation. Managers $*st %eco$e even $ore "roactive in antici"ating these changing conditions in the $ar0et"lace. Planning is i$"ortant for the fir$ to recognize changing conditions and restr*ct*re the organization to create $ore effective strategies to re$ain co$"etitive. ?. Assume that Southern 1ni'ersity ecies to: *8, raise its amission stanars. an *9, initiate a "usiness fair to which local townspeople will "e in'ite# 4hat types of plans might it use to carry out these two acti'ities? 6aising ad$ission standards wo*ld re8*ire a standing "lan to "rovide g*idance for ad$issions "erfor$ed re"eatedl! over the ne+t several se$esters. 9ithin the conce"t of a standing "lan the *niversit! $a! *se "olicies "roced*res or r*les to enforce the new ad$ission standards. A "olic! wo*ld define ad$ission standards in general and "roced*res wo*ld descri%e how to ad$it st*dents *nder the new "olic!. S"ecific r*les $ight also %e esta%lished for s"ecif!ing e+actl! what action to ta0e in s"ecific ad$ission sit*ations. Initiating a %*siness fair wo*ld "ro%a%l! re8*ire a single-*se "lan. The single-*se "lan develo"s a set of o%&ectives that will not %e re"eated in the f*t*re. The %*siness fair wo*ld "ro%a%l! %e considered a "ro&ect for which "artici"ants wo*ld develo" a set of short-ter$ o%&ectives and "lans to achieve the one-ti$e goal. @. 2i'ingSocial starte with one aily eal.; a >9= 'oucher for >= worth of foo at a 4ashington D#&#. area restaurant# Since then. the company has grown at "rea3nec3 spee. has @ million mem"ers in 9= countries. an has ac7uire a o%en companies that offer relate eals an ser'ices# 4hy an how might a company such as 2i'ingSocial want to use an intelligence team? Discuss# An intelligence tea$ is a cross-f*nctional gro*" of $anagers and e$"lo!ees *s*all! led %! a co$"etitive intelligence "rofessional who wor0 together to gain a dee" *nderstanding of a s"ecific %*siness iss*e with the ai$ of "resenting insights "ossi%ilities and reco$$endations a%o*t goals and "lans related to that iss*e. Intelligence tea$s are *sef*l when the organization confronts a $a&or intelligence challenge. S*ch tea$s can "rovide insights that hel" $anagers to $a0e $ore infor$ed decisions a%o*t goals and devise contingenc! "lans and scenarios related to $a&or strategic iss*es. 7.
Some people say an organi%ation coul ne'er "e prepare; for a isaster such as the shooting at Sany 6oo3 $lementary School. the
The crisis $anage$ent "lan is a detailed written "lan that s"ecifies the ste"s to %e ta0en and %! who$ if a crisis occ*rs. The "lan sho*ld incl*de the ste"s for dealing with vario*s t!"es of crises s*ch as nat*ral disasters li0e fires or earth8*a0es nor$al accidents li0e econo$ic crises or ind*strial accidents and a%nor$al events s*ch as "rod*ct ta$"ering or acts of 3 24/5 Cengage Learning. All 6ights 6eserved. Ma! not %e scanned co"ied or d*"licated or "osted to a "*%licl! accessi%le we%site in whole or in "art.
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Chapte 7
terroris$. The "lan sho*ld %e a living changing doc*$ent that is reg*larl! reviewed "racticed and *"dated as needed. A caref*ll! tho*ght-o*t and coordinated "lan can %e *sed to res"ond to an! disaster. In addition crisis "lanning red*ces the incidence of tro*%le $*ch li0e "*tting a good loc0 on a door red*ces %*rglaries. /4. Goals that are o'erly am"itious can iscourage employees an ecrease moti'ation. yet the iea of stretch goals is propose as a way to get people fire up an moti'ate# As a manager. how might you ecie where to raw the line "etween a goo; stretch goal an a "a; one that is unrealistic? Stretch goals are e+tre$el! a$%itio*s %*t realistic goals that challenge e$"lo!ees to $eet high standards. Stretch goals get "eo"le to thin0 in new wa!s %eca*se the! are so far %e!ond the c*rrent levels that "eo"le don1t 0now how to reach the$. A "ig hairy auacious goal is a goal that is so %ig ins"iring and o*tside the "revailing "aradig$ that it creates a shift in "eo"le1s thin0ing. In deter$ining whether it $a0es sense to "*rs*e a stretch goal the "ri$ar! considerations wo*ld %e the need to ca*se "eo"le to thin0 in new wa!s that can lead to %old innovative %rea0thro*ghs.
Appl$ 0o, S1ill"2 E3peiential E3e#i"e B,"ine"" S#hool Ran1ing
This e+ercise ena%les st*dents to %rainstor$ a%o*t how to i$"rove their own %*siness schools. St*dents sho*ld develo" ten-"oint "lans to i$"rove their schools then $eet in s$all gro*"s of three or fo*r to share their ideas and select the $ost hel"f*l action ste"s that will %e "art of a final action "lan that co*ld %e reco$$ended to the deans of their schools.
Appl$ 0o, S1ill"2 S!all Go,p Bea1o,t Co,"e Goal Setting
This e+ercise as0s st*dents to $a0e their goals for the$selves regarding d esired o*tco$es for this co*rse e+"licit. This sho*ld incl*de goals for grades and for learning s"ecific 0nowledge or s0ills. St*dents sho*ld %rea0 their goals down into goal %ehaviors and then co$"are their goals and goal %ehaviors in gro*"s. St*dents then disc*ss their s*ccess with their goals and goal %ehaviors on the last da! of class.
Appl$ 0o, S1ill"2 Ethi#al Dile!!a In"pie Leaning Copoation
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/. Donate the >8. to &entral 6igh. an consier the >8. "onus a goo return on your in'estment# This o"tion will give the a""earance of "a!ing Central igh to "*rchase the co$"an!1s "rod*ct in order to get the %on*s. It is *nethical if not illegal and sho*ld a%sol*tel! not %e *nderta0en. 2. Accept the fact you in/t 7uite ma3e your sales goal this year# Figure out ways to wor3 smarter ne!t year to increase the os of achie'ing your target# There is no reason Marge sho*ld acce"t defeat in achieving her sales goal witho*t tr!ing to do so$ething. There $a! %e so$e other wa! for Central igh to get the K/444 it needs to "*rchase the software witho*t Marge donating it so she sho*ld aggressivel! investigate other ethical wa!s for that to ha""en. :. Don/t ma3e the onation. "ut in'estigate whether any other ways are a'aila"le to help &entral 6igh raise the funs that woul allow them to purchase the much-neee eucational software# This is the %est o"tion. Altho*gh ti$e is short she $a! %e a%le to *ncover so$e other ethical $eans for Central igh to co$e *" with the f*nds the! need. If she can fig*re so$ething o*t the school will get its $*ch-needed software and Marge will $a0e her sales goal and get the %on*s. The 0e! is in hel"ing the school find a wa! to raise the $one! legiti$atel! rather than donating the $one! herself.
Appl$ 0o, S1ill"2 Ca"e .o Citi#al Anal$"i" Cental Cit$ %,"e,!
/. 4hat goal or mission for the &entral &ity Museum o you personally prefer? As irector. woul you try to implement your preferre irection? $!plain# I wo*ld "refer that the Central Cit! M*se*$ %e a $a&or co$$*nit! reso*rce rather than %eing e+cl*sive for the elite. It sho*ld have livel! conte$"orar! e+hi%its too. A section of the $*se*$ co*ld %e given for training Ph.,. level st*dents. As a director I wo*ld li0e to i$"le$ent $! "referred direction as it is the $ost cohesive an d holistic goal for the $*se*$. 2. 6ow woul you resol'e the unerlying conflicts among 3ey sta3eholers a"out museum irection an goals? 4hat action woul you ta3e? I wo*ld resolve the conflict a$ong 0e! sta0eholders %! *niting the$ toward a shared goal and get "eo"le to colla%orate and coo"erate for the larger good. I wo*ld %*ild a coalition to s*""ort the$ too.
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Chapte 7
:. e'iew the Manager/s Shoptal3 on page 999# Do you thin3 that "uiling a coalition an wor3ing out sta3eholer ifferences in goal preferences is an important part of a manager/s )o"? 4hy? B*ilding a coalition and wor0ing o*t sta0eholder differences in goal "references is an i$"ortant "art of a $anager1s &o% as a $anager can learn who %elieves in and s*""orts a goal and who o""oses it. It is also i$"ortant for "*rs*ing goals of 8*ic0 growth and higher "rofit $argins.
On the Jo& Video Ca"e An"-e" %i Ola S-i!-ea2 %anageial Planning and Goal Setting
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Based on how this %*siness owner descri%es her %*siness write a one- or two-sentence organizational $ission state$ent for Mi Ola Swi$wear. Answers will var!. Mi Ola Swi$wear $a0es fashiona%le !et f*nctional gar$ents for water s"orts1 enth*siasts
. 2
Pic0 fo*r of the following si+ categories strategic goal strategic "lan tactical goal tactical "lan o"erational goal and o"erational "lan. Then in the video find one e+a$"le to re"resent each of the fo*r categories !o*1ve chosen. ,escri%e !o*r fo*r e+a$"les and how the! fit their res"ective categories in !o*r answer.
Strategic goals are %road state$ents of where the organization wants to %e in the f*t*re and "ertain to the organization as a whole. Mi Ola wants to $a0e fashiona%le !et well-fitting swi$wear for s*rfers and others who engage in water s"orts and e+"and its %*siness. Strategic "lans are the action ste"s %! which an organization intends to attain strategic goals. Mi Ola "lans to see0 investors to have eno*gh f*nding in "lace to e+"and the design "rod*ction sales and advertising ca"a%ilities for its swi$wear. The o*tco$es that $a&or divisions and de"art$ents $*st achieve for the organization to reach its overall goals are tactical goals. Tactical goals incl*de hiring "lanners financial cons*ltants inventor! $anagers we% designers and others to carr! o*t so$e of the f*nctions carried o*t %! the Mi Ola1s fo*nder. Tactical "lans are designed to hel" e+ec*te $a&or strategic "lans and to acco$"lish a s"ecific "art of the co$"an!1s strateg!. Mi Ola1s fo*nder has develo"ed a written "lan to attract investors who want to 0now what the financial "ro&ections are for the co$"an! %efore co$$itting f*nds.
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9hat did !o* learn a%o*t so$e of the real %enefits and li$itations of "lanning %! watching this video
Benefits of Planning Goals an plans guie resource allocation# B! "lanning the inventor! and deciding how $an! swi$s*its will %e "rod*ced in each of the fo*r sizes Mi Ola1s fo*nder can decide how to allocate reso*rces a""ro"riatel!. Goals an plans are a guie to action . Planning foc*ses attention on s"ecific targets. >ashion is seasonal and Mi Ola has to "lan ahead in order to "rod*ce sa$"les of the *"co$ing collection of swi$wear. Goals an plans set a stanar of performance# Mi Ola1s collection is co$"rised of 2/ st!les and /2 colors of swi$s*its. This level of variet! sets a creative standard for each *"co$ing collection.
Li$itations of Planning Goals an plans can create a false sense of certainty# Mi Ola "lans and "rod*ces inventor!. owever the n*$%er of swi$s*its in each color and in each size that will sell is an *n0nown. All "lanning is %ased on ass*$"tions and $anagers at Mi Ola can1t 0now what the f*t*re holds for their ind*str! or for their co$"etitors s*""liers and c*sto$ers. Goals an plans may cause rigiity in a tur"ulent en'ironment# Planning can loc0 Mi Ola into s"ecific goals "lans and ti$e fra$es that $a! res*lt in a loss of reven*e. If there is an *nforeseen nat*ral disaster s*rfing $a! %e drasticall! c*rtailed and Mi Ola co*ld face red*ced sales and reven*e co*"led with e+cess inventor!.
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