Chapter 07 Organizational Planning and Goal Setting

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Human Relations
Goal Setting Planning
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Goals and Plans
Human Relations
Goal
?A desired future state that the organization
wants to achieve.

• What do we want?

Plan
?A blueprint of the actions necessary to reach
the desired goal.

• How do we get there?

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Levels of Goals/Plans - NASA
Human Relations

• A Mission Statement describes our purpose.

Mission Statement

• Everything we do is focused on getting there.

• Strategic level is the Big Picture.

Strategic Goals
Strategic Plans

• Take a man to the moon by 1970.

Senior Management

• Tactics break strategies into steps.

Tactical Goals
Tactical Plans

• Build a rocket and launch pad.

Middle Management

• And smaller steps.

Operational Goals
Operational Plans

• Build part of a rocket.

Lower Management
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Mission Statement
Human Relations

• Answers the question What drives us?

Mission Statement

• Beat GM!

Honda
A good Mission Statement

• Elicits an emotional, motivational response in
  company
• employees.

• Is easily understood and can be transferred into
  individual
• action.

• Points to a tangible and measurable goal.

• Speaks to the competitive environment in which
  the
• company operates.

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Mission Statement
Principles of Management

• A Mission Statement points to goals that are
  definable, measurable, actionable, and with
  emotional appeal that everyone understands and
  can act upon.

Mission Statement
An Organizations Mission

• Reflects managements vision of who the firm
  serves.

• Provides a clear vision of what the firm
  provides customers.

• Directs managers where the firm should be
  staking out a
• competitive position in the marketplace.

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Mission Statement
Human Relations
To provide any customer a means of moving people
and things up, down, and sideways over short
distances, with higher reliability than any
similar enterprise in the world.
Mission Statement
Elevator
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Human Relations
Mission Statement
To offer food prepared in the same high-quality
manner world-wide, tasty, reasonably priced, and
delivered in a consistent, low-key and friendly
atmosphere.
Mission Statement
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Mission Statement
Human Relations
To offer all of the fine customers in our
territories all of their household needs in a
manner in which they continue to think of us
fondly.
Mission Statement
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Human Relations
Mission Statement
To provide our customers with error-free
financial instruments delivered in a timely
fashion. Error-free means absolutely no errors.
Timely means within 48 hours.
Mission Statement
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Human Relations
Strategic Goals and Plans
Strategic Goals
Strategic Plans

• Strategic level is the Big Picture.

Senior Management
An Organizations Strategic Goals

• Helps managers at lower levels focus. Avoids
  pitfall of them
• trying to move in too many directions at
  once.

Senior Management formulates Strategic Goals so

• Lower level managers know where the firm is at
  present.

• And know where the firm is headed.

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Human Relations
Strategic Goals and Plans
Nike
Strategic Goals
Strategic Plans
Senior Management

• Protect and improve Nikes position as the
  number one athletic
• brand in America.
• Intensify the companys effort to develop
  products that women
• want and need.
• Explore the market for products specifically
  designed for the
• requirements of maturing Americans.
• Continue the drive for increased margins through
  inventory
• management and new product development.

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Human Relations
Tactical and Operational Goals and Plans
Tactical Goals
Tactical Plans

• Tactics break strategies into smaller more
  specific steps .

Middle Management

• And operational goals are even more specific
  steps .

Operational Goals
Operational Plans
Lower Management
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Human Relations
Tactical and Operational Goals and Plans
Strategic Goal Build momentum in fitness market.

• Marketing manager works with advertising manager
  and sales
• manager to devise point-of-purchase displays
  for fitness
• centers. Sales manager incorporates sales
  calls to fitness
• centers in each salespersons sales plan.

Strategic Goal Increase margins via inventory
management.

• Purchasing managers evaluate production lead
  times and
• tighten ROPs. Information Technology
  manager assigns
• inventory analyst to task of updating with
  more current
• software.

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Human Relations
Cool Bottled Water, Inc.
Cool Bottled Water is a company that sells
private label water drawn from the Sammamish
Slough near Woodinville, Washington State.
Private Label refers to the labeling of the
bottles. Major companies and restaurant chains
that want to create brand awareness order bottles
to be labeled with their own custom brand.
Our Mission Statement Our goal is to help our
customers increase the publics awareness of
their names by providing them with premium
bottled water labeled with their own name.
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Human Relations
Strategic Level
Strategic Goal To develop a source of water, a
bottling plant, and a marketing team to develop
and promote the product to large companies and
restaurant chains in Washington, Oregon, and
California, and to launch Day Zero on August
15th, 2002. To achieve ROI of 15.

• Strategic Plan
• Product development will be the responsibility
  of the Research
• and Development team, who are charged with
  maintaining purity
• and clarity standards.
• Production will be the responsibility of the
  Production and
• Warehouse Team. Plant specifications to be
  suited to needs.
• Marketing Plan development will be the
  responsibility of the
• Marketing team.

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Human Relations
Tactical Level
Tactical Goal Production Team Produce bottled
water per industry specifications for less than
35 cents per unit.
Tactical Plan Production Team Water will be
drawn from two locations along the Slough on
properties owned by the Clapping Hands Ranch.
Water rights will be secured starting Day Zero
minus 90 for 99 years via a mineral rights lease
attached to the deed of the Ranch, which will be
binding on subsequent owners. The water will be
tested monthly for purity, and bottled in the
companys bottling plant in Woodinville adjacent
to the south source. The north-source water will
be piped approximately one mile to the bottling
plant. Approximately 500 gallons are available
each day, and will be bottled in clear plastic
1/8th gallon bottles with safety caps.
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Human Relations
Operational Level
Operational Goal Bottling Team Sub-unit of
Production Team Acquire bottling equipment of
sufficient capacity and technology to maintain
output and quality standards.

• Operational Plan Bottling Team Sub-unit of
  Production Team
• Prepare RFP for equipment called out in
  specifications from
• Research and Development. Consider
  cost, ease of
• operation, reliability, and
  productivity, and choose
• appropriate equipment.
• Install equipment per factory specifications by
  Day Zero 95.
• Test output for 90 days prior to Day Zero.

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Human Relations
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Model of the MBO Process
Step 2 Developing Action Plans
Step 1 Setting Goals
?Corporate Strategic Goals
?Departmental Goals
?Individual Goals
Action Plans
Review Progress
Step 3 Reviewing Progress
Corrective Action
Appraisal of Overall Performance
Step 4 Appraising Overall Performance
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Human Relations
MBO Benefits and Problems
Benefits of MBO
Problems with MBO
1. Constant change prevents MBO from taking hold.
1. Manager and employee efforts are focused on
activities that will lead to goal attainment.
2. An environment of poor employer-employee
relations reduces MBO effectiveness.
2. Performance can be improved at all company
levels.
3. Strategic goals may be displaced by
operational goals.
3. Employees are motivated
4. Mechanistic organizations and values that
discourage participation can harm the MBO process.
4. Departmental and individual goals are aligned
with company goals.
5. Too much paperwork saps MBO energy.
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Single-Use Plansfor Goals not Likely to be
Repeated
Human Relations

• A program is a complex set of objectives and
  plans to achieve an important, one-time
  organizational goal.
• A project is similar to a program, but generally
  smaller in scope and complexity.

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Standing Plans
Human Relations

• A policy is a general guide to action and
  provides direction for people within the
  organization.
• Rules describe how a specific action is to be
  performed.
• Procedures define a precise series of steps to be
  used in achieving a specific job.
• Total quality management (TQM) to improve quality
  and production. http//www.dbainc.com/public_html/
  dba2/library/tqm.html
• 6 Sigma Continuous evaluation and improvement.
• http//www.isixsigma.com/sixsigma/six_sigma.asp

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Contingency Plans
Human Relations

• May be defined as scenarios.
• Define company responses to be taken in case of
  setbacks or unexpected conditions.

Is just rolling the dice good enough?
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Strategic Planning
Human Relations

• Strategy The plan of action that describes
  resource allocation activities for dealing with
  the environment to attain organizational goals.

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Strategic Management Questions
Human Relations

• What changes and trends are occurring?
• Who are the customers?
• What products or services should we offer?
• How can we offer these products or services
  efficiently?

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Strategic Management Process Situation Analysis
via SWOT
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External Opportunities and Threats
Competitors what will emerge?
The Economy
Customers what will they want?
Trends in Technology
Legal and Political Factors