BMEC (FINALS) Flashcards
involves defining the organization’s goals, establishing an overall strategy for achieving these goals, and developing plans for organizational work activities.
Planning
Purposes of Planning
- Planning gives direction to managers and nonmanagers of an
organization. - Planning reduces uncertainty.
- Planning minimizes waste and uncertainty.
- Planning establishes goals or standards used in controlling.
Elements of Planning
Goals and Plan
Desired outcomes for individuals, groups, or entire organizations
Provide direction and evaluation performance criteria
GOALS
Documents that outline how goals are to be accomplished
Describe how resources are to be allocated and establish activity
schedules
PLAN
Are related to the expected internal financial performance of the organization.
Financial goals
Are related to the performance of the firm relative to factors in its external environment (e.g., competitors).
Strategic goals
are those that an organization actually pursues, as defined by the actions of its members.
Real goals
are official statements of what an organization says and what it wants its various stakeholders to believe its goals are.
Stated goals
Strategic versus operational plans.
Breadth
(long-term plans) are
plans that apply to the entire organization, establish the organization’s overall goals,
and seek to position the organization in terms of its environment.
Strategic plans
(short-term plans) are plans that specify the details of how the overall goals are to be
achieved.
Operational plans
Short-term versus long-term plans.
Time frame
are plans that cover
one year or less.
Short-term plans
are plans with a time frame beyond three years.
Long-term plans
Specific versus directional plans.
Specificity
are plans that are
clearly defined and leave no room for interpretation.
Specific plans
are flexible plans
that set out general guidelines.
Directional plan
Single-use versus standing plans.
Frequency of use
is a one- time plan specifically designed to meet the needs of a unique situation.
Single use plans
are ongoing plans that provide guidance for activities performed repeatedly.
Standing plans
Goals can be established through the process of traditional goal setting or
through
MBO (Management by Objectives)
is an approach to setting goals in which goals are set at the
top level of the organization and then broken into subgoals for each level of the
organization.
Traditional goal setting
assumes that top managers know what is best because of their ability to see the “big picture.” Employees are to work to meet the goals for their particular
area of responsibility.
Traditional goal setting
integrated network of goals in which the accomplishment of
goals at one level serves as the means for achieving the goals, or ends, at the next
level.
Means–Ends Chain
The integrated network of goals that results from establishing a
clearly-defined hierarchy of organizational goals.
Achievement of lower-level goals is the means by which to reach
higher-level goals (ends).
Means–Ends Chain
is a process of setting mutually agreed-upon goals
and using those goals to evaluate employee performance.
Management by objectives (MBO)
Specific performance goals are jointly determined by employees and
managers.
Progress toward accomplishing goals is periodically reviewed.
Rewards are allocated on the basis of progress towards the goals.
Management by objectives (MBO)
Key elements of MBO:
Goal specificity, participative decision making, an explicit
performance/evaluation period, feedback
Five Steps in Goals Setting
- Review the organization’s mission (the purpose of the organization).
- Evaluate available resources.
- Determine the goals individually or with input from others
- Write down the goals and communicate them to all who need to know.
- Review results and whether goals are being met. Make changes as needed.
Characteristics of Well Designed Goals
- Written in terms of outcomes
- Measurable and quantifiable
- Clear as to time frame
- Challenging yet attainable
- Written down
- Communicated to all necessary organizational members
Three Contingency Factors in Planning
- Manager’s level in the organization
- Degree of environmental uncertainty
- Length of future commitments
Strategic plans at higher levels
Operational plans at lower levels
Manager’s level in the organization
Stable environment: specific plans
Dynamic environment: specific but flexible plans
Degree of environmental uncertainty
current plans affecting future commitments
must be sufficiently long-term to meet those commitments.
Commitment concept
A group of planning specialists who help managers write organizational
plans.
Planning is a function of management; it should never become the sole
responsibility of planners.
Establishing a formal planning department
Plans are developed by members of organizational units at various levels and then
coordinated with other units across the organization.
Involving organizational members in the process
