copyright © houghton mifflin company. all rights reserved.7–1 elements of planning
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Copyright © Houghton Mifflin Company. All rights reserved. 7–1
Elements of Planning
© 2010 South-Western, Cengage Learning, Inc. All rights reserved. 7–2
Organizational Goals
Guidance and unified direction
Promotion of good planning
Source of motivation
Evaluation and control
Purposes of Goals
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Kinds of Goals
By LevelMission statement
Strategic goalsTactical goals
Operational goals
By AreaOperationsMarketingFinance
Production
Time FrameLong-term goals
Intermediate goalsShort-term goals
Explicit goalsOpen-ended goals
Setting Organizational Goals
7–4
Kinds of Organizational
Goals for a Regional Fast-
Food Chain
Creating S.M.A.R.T. Goals
Specific – Be clear about what you want to accomplish.
Measurable – Put in quantifiable terms to track your progress.
Attainable – Make it challenging, but attainable.
Realistic – Be willing and able to work toward.
Timely – Include a time frame, have due dates for milestones.
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• Strategic Plans(Top Management)– Broadest set of plans – primary objectives– Mission statement
• Tactical Plans (Middle Management)– Smaller scale – used to implement a strategy– Typically 1-3 year period
• Operational Plans (Supervisory Management)– Designed to implement tactical plans– Typically 1 year or less– Deals with the “how” in accomplishing specific
objectives
• Contingency Plans (Any management level)– Alternative courses of action
Kinds of Organizational Plans
7–7
• The Time Dimension of Planning– Planning must provide sufficient time to fulfill the managerial
commitments involved.
Long-range (strategic) plans of 5 or more years
Short-range (operational) action and contingency plans of 1 year or less
Intermediate-range (tactical) plans of 1–5 years
1 5 10
7–8
Plan Type Description
Single-use plans Developed to carry out a course of action not likely to be repeated in the future
Program Single-use plan for a large set of activities
Project Single-use plan of less scope and complexity than a program
Standing plans Developed for activities that recur regularly over a period of time
Policy Standing plan specifying the organization’s general response to a designated problem or situation
Standard operating procedure
Standing plan outlining steps to be followed in particular circumstances
Rules and regulations Standing plans describing exactly how specific activities are to be carried out
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Rule: (no exceptions)
No returns over $50 without a managers signature
Policy: (manager has some discretion)
Accept customer returns
Procedure:Outline steps to be followed in particular circumstances
(SOPs- Standard Operating Procedures)
Example of Policy, Rule, and Procedure
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Major barriers Inappropriate goals
Improper reward system
Dynamic and complex environment
Reluctance to establish goals
Resistance to change
Constraints
Overcoming the barriers
Understanding the purposes of goals and planning
Communication and participation
Consistency, revision, and updating
Effective reward system
Barriers to Goal Setting and Planning
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The Formal Goal-setting Process
Management By Objectives (MBO)
•Goals are collaboratively set between managers and subordinates
•Evaluation and reward based on subordinate’s performance