Chapter 5: Planning and Goal Setting Flashcards
a desired future circumstance or condition that the organization attempts to realize.
goal
a blueprint for goal achievement and specifies the necessary resource allocations, schedules, tasks, and other actions.
plan
determining the organization’s goals and defining the means for achieving them.
planning
Goals define and state the ______ of a company.
purpose
Goals specify (future/today’s) means. Plans specify (future/today’s) means.
future; today’s
The planning process starts with a ______ _____ that defines the basic purpose of the organization, especially for external audiences. The mission is the basis for the ______ (company) level of goals and plans, which in turn shapes the ______ (divisional) level and the _______ (departmental) level.
formal mission; strategic; tactical; operational
Who is typically responsible for establishing STRATEGIC goals and plans that reflect a commitment to both organizational efficiency and effectiveness?
Top managers
________ goals and plans are the responsibility of middle managers, such as the heads of major divisions or functional units.
Tactical
identify the specific procedures or processes needed at lower levels of the organization, such as individual departments and employees.
Operational plans
Who develops operational plans that focus on specific tasks and processes and that help meet tactical and strategic goals?
Lower management (frontline managers and supervisors)
T or F: Managers who set distal (long-term goals) tend to see better results than those that set proximal (short-term goals)
False; opposite
What is at the top of the levels of goals and plans? Why?
The mission statement; because it drives everything (ex: can’t set a strategic goal if you don’t know what the mission statement is)
What are the levels of goals and plans from lowest to highest?
- Operational Goals/Plans
- Tactical Goals/Plans
- Strategic Goals/Plans
- Mission Statement at the top
What are the 5 steps of the organizational planning process?
- Develop the Plan
- Translate the Plan
- Plan Operations
- Performance Management
- Monitor and Learn
Of the management functions, _______ is considered the most fundamental.
a. leading
b. planning
c. controlling
b. planning
What are the two things done in Step 1: Develop the Plan, of the Organizational Planning Process?
- Define mission, vision
- Set goals
What are the four things done in Step 2: Translate the Plan, of the Organizational Planning Process?
- Define tactical plans and objectives
- Develop strategy map
- Define contingency plans and scenarios
- Apply flexible goal setting
What are the four things done in Step 3: Plan Operations, of the Organizational Planning Process?
- Define operational goals and plans
- Select measures and targets
- Set stretch goals
- Plan for crises
What are the four things done in Step 4: Performance Management, of the Organizational Planning Process?
Use:
1. management by objectives
2. performance dashboards
3. single use plans
4. decentralized responsibility
What are the two things done in Step 5: Monitor and Learn, of the Organizational Planning Process?
- Hold planning reviews
- Hold operational reviews
T or F: The organizational planning process prevents managers from thinking merely in terms of day-to-day activities.
True
Goals are ______ ______, which means they are defined by an individual or a group.
socially constructed
An organization’s purpose/reason for existence; describes the organization’s values, aspirations, and reason for being
mission
At the top of the goal hierarchy is the _________.
mission
One of the defining attributes of successful companies is that they have a ______ mission that guides decisions and actions.
clear
a broadly stated definition of purpose that distinguishes the organization from others of a similar type
formal mission statement
a well-designed mission statement can enhance ________ motivation and organizational __________.
employee; performance
broad statements describing where the organization wants to be in the future.
strategic goals (sometimes called official goals)
T or F: Strategic goals pertain to the organization as a whole rather than to specific divisions or departments.
True
define the action steps by which the company intends to attain strategic goals.
strategic plans
Strategic planning tends to be (short-term/long-term) and may define organizational action steps from _____ to ______ years in the future.
long-term; two-five
the results that major divisions and departments within the organization intend to achieve
tactical goals
designed to help execute the major strategic plans and to accomplish a specific part of the company’s strategy.
tactical plans
T or F: Tactical plans typically have a shorter time horizon than strategic plans—that is, over the next year or so
True
results expected from departments, work groups, and individuals (lower management)
operational goals
Operational goals are _______ and _______.
precise; measurable
Sarah is a middle manager at Enterprise Corporation. As such, she is most likely responsible for the achievement of __________ goals.
a. Operational
b. Strategic
c. Lower-level
d. Tactical
d. tactical
What characteristic of effective goals does this describe:
managers establish goals based on the idea of measurement and clarity. A few carefully chosen goals with clear measures of success can focus organizational attention, energy, and resources more powerfully
cover key result areas
Tools used to assess what is important to an organization and how well the organization is progressing toward attaining its strategic goal, so that managers can establish lower-level goals that drive performance toward the overall strategic objective.
key performance indicators (KPIs)
What are the 5 characteristics of effective goals?
- Are specific and measurable
- Have a defined time period
- Cover key result areas
- Are challenging but realistic
- Are linked to rewards
a system whereby managers and employees define goals for every department, project, and person and use them to monitor subsequent performance.
Management by Objectives (MBO)
What are the 4 major activities/steps that make MBO successful?
- Set Goals
- Develop Action Plans
- Review Progress
- Appraise Overall Performance
What is a potential problem that can be caused by using MBO?
if there’s an overemphasis on “meeting the goals”, this can obscure the means that people use to get there. People may cut corners, ignore potential problems, or behave unethically just to meet the targets.
T or F: MBO can stand alone.
False; it’s only a part of effectively managing people to achieve goals
What are the 4 benefits of MBO?
- Focuses manager and employee efforts on activities that will lead to goal attainment.
- Can improve performance at all company levels.
- Improves employee motivation.
- Aligns individual and departmental goals with company goals.
a systematic approach that focuses attention on the methods and processes used to achieve goals.
management by means (MBM)
What method/system is based on the idea that when managers pursue their activities in the right way, positive outcomes will result and focuses people on considering the means rather than just on reaching the goals.
management by means (MBM)
What are the 4 benefits of goals and planning?
- Provide a source of motivation and commitment.
- Guide resource allocation.
- Are guides to actions.
- Set a standard of performance.
What are the 4 limitations of goals and planning?
- Can create too much pressure.
- Can create a false sense of certainty.
- May cause rigidity in a turbulent environment.
- Can get in the way of intuition and creativity.
What are the 3 planning approaches that can be used to help brace organization’s for a turbulent environment (for unexpected events)?
- Contingency Planning
- Scenario Building
- Crisis Planning
define company responses to be taken in the case of emergencies, setbacks, or unexpected conditions. (ex: Covid outbreak, reacting to an unexpected hurricane, etc.)
contingency planning
a forecasting technique that looks at current trends and discontinuities and visualizes future possibilities.
scenario building
what type of planning prepares the organization, its managers, and its employees to cope with sudden catastrophic events.
crisis planning
What are the 2 essential stages of crisis planning?
- Prevention (activities that managers undertake to try to prevent crises and to detect warning signs of potential crises)
- Preparation (all the detailed planning to handle a crisis when it occurs)
Which management method focuses manager and employee efforts on activities that will lead to goal attainment?
a. Tactical planning
b. Management by objectives
c. Management by walking around
d. Contingency planning.
b. Management by objectives
What are the 2 major steps in the prevention stage of crisis planning?
- Build relationships
- Detect signals from the environment
What are the 3 major steps in the preparation stage of crisis planning?
- Designate crisis management team and spokesperson
- Create detailed crisis management plan
- Set up effective communications system
A crisis management plan should be a _____, _______ document that is regularly ______, practiced, and updated as needed.
living, changing; reviewed
Jeff is a top manager at a textile factory. He is developing a crisis plan to be implemented in the event that the company has a toxic spill or similar industrial accident. Which issue should be addressed in the crisis prevention stage?
a. Designating a crisis management team
b. Building open, trusting relationships with key stakeholders
c. Designating a crisis management spokesperson
d. Setting up an effective communications system
e. All of the above
b. Building open, trusting relationships with key stakeholders
the planning experts work with managers in major divisions or departments to develop their own goals and plans.
decentralized planning
T or F: Planning comes alive when employees are involved in setting goals and determining the means to reach them.
True
reasonable yet highly ambitious goals that are so clear, compelling, and imaginative that they fire up employees and engender excellence.
stretch goals
term used to describe any goal that is so big, inspiring, and outside the prevailing paradigm that it hits people in the gut and shifts their thinking
Big hairy audacious goals (BHAG)
T or F: A company that focuses on gradual, incremental improvements in products, processes, or systems will be left behind.
True
What is one specific type of planning that largely determines which organizations succeed and which ones struggle.
strategic management
means to take the long-term view and see the big picture, including the organization and the competitive environment, and consider how they fit together.
strategic thinking
In for-profit firms, strategic planning typically pertains to _______ _______ in the marketplace.
competitive actions
In nonprofit organizations, strategic planning pertains to events in the ________ _________.
external environment
refers to the set of decisions and actions used to formulate and execute strategies that will provide a competitively superior fit between the organization and its environment to achieve organizational goals.
strategic management
What is the first step in strategic management?
Define an explicit strategy
a plan of action that describes resource allocation and activities for dealing with the environment, achieving a competitive advantage, and attaining the organization’s goals.
strategy
stage of strategic management that includes the planning and decision making that lead to the establishment of the organization’s goals and a specific strategic plan.
strategy formulation
the stage of strategic management that involves the use of managerial and organizational tools to direct resources toward achieving strategic outcomes.
strategy execution
refers to what sets the organization apart from others and provides it with a distinctive edge for meeting customer/client needs in the marketplace.
competitive advantage
What are the 4 elements of competitive advantage?
- Target Customers → define the customers and which of their needs are to be served.
- Achieve Synergy → synergy: the energy that results from joint efforts that is greater than the sum of the parts acting alone.
- Create Value → deliver value: the combination of benefits received and costs paid.
- Exploit Core Competence → core competencies: something that the org. does especially well in comparison to its competitors.
The plan of action that describes resource allocation and activities for dealing with the environment, achieving a competitive advantage, and attaining the organization’s goals is known as a:
a. Goal
b. Objective
c. Mission
d. Vision
e. Strategy
e. Strategy
T or F: The heart of strategy is to deliver value to customers.
True
Strategies developed by top leaders with little input from people on the front lines can be biased and fail to be embraced by the people who need to carry them out. This is highlighting the importance of __________.
crowdsourcing
What adds diversity of thought, gets top executives closer to understanding the implications of their choices, and helps to avoid limited-perspective biases of top managers?
crowdsourcing
Includes a careful assessment of the Strengths, Weaknesses, Opportunities, and Threats that affect organizational performance.
SWOT analysis
Strengths and weaknesses are _______ characteristics, while opportunities and threats are _________ characteristics.
internal; external
What are two approaches to understanding corporate-level strategy?
- Boston Consulting Group (BCG) Matrix
- Diversification.
an approach to understanding corporate-level strategy that organizes businesses along two dimensions– business growth rate and market share.
BCG Matrix
pertains to how rapidly the entire industry is increasing.
business growth rate
defines whether a business unit has a larger or smaller share than competitors.
market share
What category of the BCG Matrix does this describe:
- High market share and high business growth rate
- Rapid growth and expansion
Stars
What category of the BCG Matrix does this describe:
- Low market share and high business growth rate
- New ventures. Risky– a few become stars, others are divested.
Question Marks
What category of the BCG Matrix does this describe:
- High market share and low business growth rate
Cash cows
What category of the BCG Matrix does this describe:
- Low market share and low business growth rate
- no investment. keep if some profit. consider divestment.
Dogs
The star has a large market share in a ______ _______ industry.
rapidly growing
T or F: The cash cow is visible and attractive and will generate profits and a positive cash flow even as the industry matures and market growth slows.
False; the STAR
The cash cow exists in a ______, _____-_______ industry but is a dominant business in the industry with a large market share.
mature, slow-growth
The question mark exists in a _____, ______ ________ industry but has only a small market share. The question mark business is risky: It could become a star, or it could fail. The corporation can invest the cash earned from cash cows in question marks with the goal of nurturing them into future stars.
new, rapidly growing
The dog is a poor performer. It has only a small share of a ______-_______ market. The dog provides little profit for the corporation and may be targeted for divestment or liquidation if turnaround is not possible.
slow-growth
Double Click, Inc. has a number of strategic business units. Its handheld computer unit has a large market share in this rapidly growing industry. Its handheld computer business would be classified by the BCG matrix as:
a. A dog
b. A star
c. A question mark
d. A cash cow
e. Stuck in the middle
b. A star
What are Porter’s Five Forces?
- Potential New Entrants
- Bargaining Power of Buyers
- Bargaining Power of Suppliers
- Threat of Substitute Products
- Rivalry Among Competitors
To find a competitive edge within the specific business environment, Porter suggests that a company can adopt one of three strategies:
- Differentiation
- Cost Leadership
- Focus
What are the 6 organizational characteristics associated with the differentiation strategy?
- Acts in a flexible, loosely knit way; strong coordination among departments
- Strong capability in basic research
- Creative flair, thinks “out of the box”
- Strong marketing abilities
- Rewards employee innovation
- Corporate reputation for quality or technological leadership
What are the 5 organizational characteristics associated with the cost leadership strategy?
- Strong central authority; tight cost controls
- Maintains standard operating procedures
- Easy-to-use manufacturing technologies
- Highly efficient procurement and distribution systems
- Close supervision; finite employee empowerment
a strategy with which managers seek to distinguish the organization’s products and services from those of others in the industry.
differentiation
a strategy with which managers aggressively seek efficient facilities, cut costs, and use tight cost controls to be more efficient than others in the industry.
cost leadership strategy
managers use either a differentiation or a cost leadership approach, but they concentrate on a specific regional market or buyer group.
focus strategy
Mingles, Inc. concentrates its efforts on its target market of 18-25 year olds. It is using Porter’s ________ strategy.
a. Focus
b. Differentiation
c. Cost leadership
d. Multidomestic
e. Universal
a. Focus
