PLANNING

AND
GOAL-
SETTING
Management by Stephen P. Robbins
and Mary Coulter (14E)
CONTENTS:
01 THE WHAT AND WHY OF PLANNING
• What is planning?
• Why do managers plan?
• Planning and performance.

02 GOALS AND PLANS

• Types of goals.
• Types of plans.

03 SETTING GOALS AND DEVELOPING PLANS

• Approaches to setting goals.
• Developing plans.
• Approaches to planning

04 CONTEMPORARY ISSUES IN PLANNING

• How can managers plan effectively in dynamic environments?
• How can managers use environmental scanning?
• Digital tools.

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1
THE WHAT AND
WHY OF
PLANNING
What is Planning?
Planning is a management function that involves setting goals,
establishing strategies to achieve those goals, and developing
plans to integrate and coordinate work activities.
⦁ When we use the term “planning”, we refer to FORMAL
PLANNING.

 FORMAL PLANNING
In formal planning, specific
goals covering a specific time
period are defined and these
are shared with
organizational members.

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Why do managers plan?
There are four reasons of why planning is important:
1) Planning provides direction
2) Planning reduces uncertainty
3) Planning minimizes waste and redundancy
4) Planning establishes the goals or standards used in
controlling

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Is planning
worthwhile?

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The relationship between Planning
and Performance
⦁ Firstly, formal planning is associated with positive financial results –
higher profits, higher return on assets, and so forth.
⦁ Secondly, doing a good job planning and implementing those plans
play a bigger part in high performance than how much planning is
done.
⦁ Thirdly, often external environment is the culprit in low performance.
⦁ Lastly, the planning-performance relationship seems to be influenced
by planning time frame. (At least four years of formal planning is
required).

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2
GOALS AND
PLANS
What are goals?
Goals (or objectives) are the desired outcomes or STATED VS REAL GOALS
targets.  Stated goals – official
⦁ statements of what an
They guide management decisions and form the
organization says and
criteria.
wants its stakeholders to
⦁ There are two types of goals; financial and believe.
strategic.  Real goals – those goals
in an organization really
Financial goals Strategic goals – pursues.
related to the
– related to the
performance of
expected internal the firm relative to
financial factors in its
performance of environment (e.g.
the organization. competitors)

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What are plans?
Plans are documents that outline how
goals are going to be accomplished.
⦁ They describe how resources are to be
allocated and establish activity
schedules.

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What are the different types of
plans?

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Each category explained:
Breadth

Strategic Operational

 Establish the  Specify the details of

organization’s overall how the overall goals
goals. are to be achieved.
 Seek to position the  Cover a short period of
organization in terms of time.
its environment.
 Cover extended periods
of time.

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 Time Frame

Long-term Short-term

 Plans with a time frame  Plans covering one

beyond three years. year or less.

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 Specificity

Specific Directional

 Plans that are  Flexible plans that set

completely defined and out general guidelines
leave no room for and provide focus, yet
interpretation. allow discretion in
implementation.

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 Frequency of
Use

Single-use Standing

 A one-time plan  Ongoing plans that

specifically designed to provide guidance for
meet the need of a activities performed
unique situation. repeatedly.

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3
SETTING
GOALS AND
DEVELOPIN
G PLANS
What are the approaches to setting
goals?
Goals can be set either through a traditional process or
by using management by objectives.
i. Traditional Goal Setting
ii. Management by Objectives (MBO)

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 TRADITIONAL GOAL-SETTING
Traditional goal setting is an approach to
setting goals in which goals are set at the top
level of the organization and then broken
into sub goals for each level of the
organization

DOWNSIDE OF THIS
APPROACH:
• Goals lose clarity and
focus as lower-level
managers attempt to
interpret and define the
goals for their areas of
responsibility.

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 Maintaining the
heirarchy of
organizational goals:
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 of
reaching higher level goals.

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MANAGEMENT BY OBJECTIVES (MBO)
A process of setting mutually agreed upon
goals and using these goals to evaluate
employee performance

 Specific performance goals are jointly

determined by employees and managers.
 Progress towards accomplishing goals is
periodically reviewed.
 Rewards are allocated on the basis of
progress towards the goals.

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 Problems with an MBO
program:
⦁ Less effective in dynamic environments that
require constant resetting of goals.
⦁ Overemphasis on individual accomplishment may
create problems with teamwork.
⦁ Allowing the MBO program to become an annual
paperwork shuffle.

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STEPS IN GOAL-SETTING:
Review results and
Review the organization’s Determine goals individually analyze whether goals are
or with others. being met.
mission, or purpose.
(ARE GOALS SPECIFIC, (WHAT CHANGES ARE
(DO GOALS REFLECT THE MEASURABLE, AND NEEDED IN MISSION,
MISSION?) TIMELY?) RESOURCES OR GOALS?)

1 3 5

2 4

Evaluate available resources. Write down the goals

(ARE RESOURCES and communicate them.
SUFFICIENT TO (IS EVERYBODY ON
ACCOMPLISH THE THE SAME PAGE?)
MISSION?)
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The process of Developing Plans
The process of developing plans is
influenced by three contingency factors:

___________________________________________________
CONTINGENCY FACTORS IN PLANNING
There are three contingency factors that affect the choice of plans;
i. Organizational level – strategic plans at higher levels and
operational plans at lower levels.
ii. Degree of environmental uncertainty – when uncertainty is
high, plans should be specific but flexible. Managers must be
prepared to change or amend plans they’re implemented and
even abandon the plan when needed.
iii. Commitment concept – current plans affecting future
commitments must be sufficiently long-term in order to meet
those commitments.

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 APPROACHES TO PLANNING

 ESTABLISHING A FORMAL  INVOLVING ORGANIZATIONAL

PLANNING DEPARTMENT MEMBERS IN THE PROCESS
• Create a group of planning specialists • Plans are developed by members of
that help managers write organizational organizational units at various levels and
plans. then coordinated with other units across
• Planning is a function of management; it the organization.
should never become the sole
responsibility of planners.

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4
CONTEMPORAR
Y ISSUES IN
PLANNING
How can managers plan effectively in
dynamic environments?
 Develop plans that are specific but flexible.
 Understand that planning is an ongoing
process.
 Change plans when conditions warrant
alterations.
 Persistence in planning eventually pays off.
 Flatten the organizational hierarchy to foster
the development of planning skills at all
organizational levels.

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How can managers use environmental
scanning? Environmental
scanning: screening
A manager’s analysis of the external environment may
information to detect
be improved by environmental scanning. emerging trends
• One of the fastest-growing forms of environmental
scanning is competitor intelligence, gathering
information about competitors that allows managers
to anticipate competitors’ actions rather than merely
react to them.
• Managers do need to be careful about the way
information, especially competitive intelligence, is
gathered to prevent any concerns about whether it’s
legal or ethical

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DIGITAL TOOLS
Business intelligence:
 Managers can use digital tools to data that managers can
use to make more
make sense of business intelligence
effective strategic
data decisions.

 Specific examples of digital tools

Digital tools:
include software such as Microsoft technology, systems, or
software that allow the
Excel, online services such as
user to collect,
Google Analytics, or networks that visualize, understand,
or analyze data.
connect computers and people, such
as social media.. Three Prevalent Digital Tools:
• Data visualization tools.
• Cloud computing network
• Internet of things (IoT)
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Thankyou!


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