MANAGEMENT

RICHARD L. DAFT

Managerial Planning and

Goal Setting
CHAPTER 6

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Learning Outcomes

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.

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.

Describe and explain the importance of contingency planning, scenario

building, and crisis planning in todays environment.

Summarize the guidelines for high-performance planning in a fastchanging environment.

chapter6

Does Goal Setting Fit Your

Management Style?

Managers must plan where the organization

should go in the future
Managers must plan for unexpected events
The company establishes a basic mission and
develops goals and objectives
Plans should meet environmental changes and
expectations of stakeholders
Planning is fundamental to all organizations
Everything stems from planning

chapter6 Overview of Goals and Plans

A goal is a desired future state that the
organization attempts to realize
A plan is a blueprint for goal achievement
There are different levels of planning and
goals in an organization
Goals at each level of the organization
guide the organization
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Levels of Goals/Plans
and their Importance

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Characteristics of
Goals and Plans

Legitimacy
Source of motivation and commitment
Resource allocation
Guides to action
Rationale for decisions
Standards of performance
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The Organizational Planning

chapter6
Process

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Organizational Mission

The mission statement is the reason the

organization exists
Top of the goal hierarchy
Describes the values, aspirations and reason
for being
A well-defined mission is the basis for all other
goals

Mission statements outline the stated

purpose and values to stakeholders
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Types of Goals and Plans

Strategic Goals official goals, broad statements

about the organization
Define the action steps the company intends to attain
The blueprint that defines activities

Tactical Goals help execute major strategic plans

Specific part of the companys strategy
Plans of the divisions and departments

Operational Goals results expected from

departments, work groups, and individuals
Lower levels of the organization
Specific action steps

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Aligning Goals
with Strategy Maps

Goals should be consistent and mutually

supportive
The achievement of goals at low levels
permits the attainment of high-level goals
Individuals, teams, and departments
should be working in concert
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Strategy Map for

Aligning Goals
Goals
should be
consistent
and
mutually
supportive

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Operational Planning

Operational goals should direct employees

and resources toward outcomes
It is important to establish effective goals
Management by objective
Single-use plans
Standing plans
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Characteristics of
Effective Goal Setting

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chapter6 Management by Objective

Defined by management scholar
Peter Drucker in his 1954 book,
The Practice of Management
Process of defining goals and
monitoring progress

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Model of the MBO Process

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chapter6 MBO Benefits and Problems

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Single-Use and
Standing Plans

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Planning for a Turbulent

Environment

Contingency Planning plans for

emergencies, setbacks or unexpected
conditions
Building Scenarios visualizing future
possibilities
Crisis Planning preparing to cope with
unexpected events
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Essential Stages of
Crisis Planning

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Traditional Approach:
Done by top
executives (top down)
Central planning
departments
Planning specialist
Stretch Goals and Big
Hairy Audacious
Goals (BHAG) are big
and inspiring

Planning for High

Performance
High-Performance
Approach:
Decentralized planning
Managers plan
throughout the
organization
Now involves linemanagers and
employees
Dynamic plans for fastchanging needs
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Performance Dashboard
for Planning

Gauge progress
toward goals
Align and track
goals
All employees can
track progress

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