Chapter 4

GOAL SETTING, AND

PLANNING Work Activities
FUNCTIONS OF MANAGEMENT
 Table of Contents-Planning
1. Goals and Plans

2. Setting goals

3. Why set Goals

4. How to Set a goals

5. Types of Goals/Levels

6. Goals should be Smart

7. Importance of Goal setting

8. Definition, Scope and Performance of Planning

 Table of Contents-Planning

1. Why do Managers Plan

2. Types of Planning

3. Developing/Approaches of Plans

4. Contemporary issues in planning

5. Planning Process
 Learning Objectives
1. Define goals
2. Describe the types of goals organizations might have.
3. Explain why it’s important to know an organization’s stated and real goals.
4. Describe Responsibilities of Setting Goals
5. Show steps in Goal settings
6. Describe the Importance of Planning
7. Define Planning
8. Explain Planning Process
9. Differentiate Types of Planning
10. Define Decision Making Process
11. List of Decision Types
12. Discuss contemporary issues in planning
 Meaning and Concept and Definitions of Functions of
Management
Management is a dynamic process consisting of several-elements or activities.
These elements or activities, which every manager has to perform are known
as the function of management. The nature and significance of management
can be better understood by a study of its function. There are five functions
generally accepted functions of management. Planning, organizing, staffing,
leading, controlling. These functions work together in the creation, execution

and realization of organizational goals.

 Organizational Goals vs. Personal Goals

All organizations have goals. Goals give an organizations purpose and direction to move

towards the entire years. A goals is statement describing what an organization or individual

wishes to accomplish. These goals not only drive the organization as whole but also guide

employee’s efforts towards achieving the company’s vision.

 Objectives or Goals

Objectives are important ends towards which organizational and individuals activities are

directed. Objectives can be long-term or short-term, broad or specific. Objectives or goals

are the ends towards which activity is aimed. Objectives emanate primarily from the mission

statement of the organization .Objective should be expressed as specifically as possible so

that results can be seen and verified

 Types/Levels of Goals

• 1.Short Term Goals: a short term goals is something you want to do in the near future. The near

future can mean today, this weeks, or this month. Daily goals, weekly goals, monthly goals.

• 2.Long Term Goals:a long term goal is something you want to accomplish in the future. Long term

goals require time and planning. They are something you can do this day or even two. Long term

goals are usually several years. Example opening a new branches into all states in the country.
 Types/Levels of Goals
There are two main types of organizational goals
Official goals /Stated Goals
Official goals are the formally stated goals of an organization and are described in its
public statements such as corporate charts, mission and Vision statements, and annual
reports. The purpose of official goals is to help build the organization’s public image and
reputations. Stated goals are what the company states to the public as the official mission
Operative Goals/Real Goals
Operative goals are the concrete steps an organization plans to take to achieve its vision
and purpose. They are the outcomes the organization actually seeks to attain through its
operative activities such as financing, strategic etc. Real goals is the one adopted and
actively pursued by the organization
 Who sets Goals
Responsibilities of Setting Goals

Traditional goal-setting is an approach to setting goals in which top managers set goals that

then flow down through the organization and become sub goals middle lower for each

organizational area.All managers: managerial responsibility for goal setting should

correspond to the manager’s level in the organization.

 Goal settings Process

Review the organizations mission or purpose

Evaluate available resources such as financial resources

Write down the goals and communicate them to all who need to know

Review results and whether goals are being met

 Approaches to Setting Goals
Setting Goals and Developing Plans

as we stated earlier, goals provide the direction for all management decisions and
actions and form the criteria against which actual accomplishments are measured.
Everything organizational members do should be oriented toward achieving goals.
These goals can be set either through a traditional process or by using management
by objectives. In traditional goal-setting, goals set by top managers žflow down
through the organization and become sub goals for each organizational area.
 Concept of Planning
Planning means looking ahead and chalking out future course of action to be followed.it is
a preparatory steps.it is a systematic activity which determines 6 W’s
when,how,where,when,who and why is going to perform a specific job.it is rightly said “
Well plan, is half done”
 Difference between Plan and Planning

Plan: is a noun, it is used when the plan is complete. I have a plan.it is a

specific documented intention consisting of an objective (end) and an action

statements (means). Documents that outline how goals are going to be met.

Planning: is a verb it is the action of creating plan. I am planning my next

project.
 Definition of Planning

Planning is a process in which decisions are taken in advance.

GOALS and plans Planning is often called the primary management function because it establishes the basis for

all the other things managers do as they organize, lead, and control. It involves two important aspects: goals and

plans. Goals (objectives) are desired outcomes or targets. They guide management decisions and form the criteria

against which work results are measured. That’s why they’re often described as the essential elements of

planning. You have to know the desired target or outcome before you can establish plans for reaching it. Plans

are documents that outline how goals are going to be met. They usually include resource allocations, schedules,

and other necessary actions to accomplish the goals. As managers plan, they develop both goals and plans

ce.
 Why do managers Plan/Benefits of Good Plan.

1. Provides direction

2. Reduces uncertainty

3. Minimizes waste and redundancy

4. Establishes the goals and standards for controlling

5. Encourages innovation & creativity

6. Gives competitive edge to the enterprise

 Is Planning a necessity in an organization

In organizations, planning is the process of setting goals & choosing the means to achieve

those goals. Without plans, managers cannot know how to organize people & resources

effectively. Without a plan, managers & their followers have little chance of achieving their

goals. Faulty plans affect the future of an entire organization. Hence, planning is crucial
 Nature & Characteristics of Planning:

1. Focus on objectives

2. It is an intellectual process

3. Planning is pervasive

4. Planning is an integrated process

5. Planning is directed towards efficiency

6. Planning is flexible

7. Planning is the most basic of all management functions

8. Planning is a continuous & never-ending process

9. The efficiency of planning is measured by what it contributed to the objectives

 Essentials of a good plan:
The essentials of a good plan are as follows:
1. It should be based on a clearly defined objective
2. It must be simple
3. It should be comprehensive
4. It should prove for a proper analysis & classification of action
5. It must be flexible
6. It must be balanced
7. It must use all available resources & opportunities utmost before creating
new authorities & new resources
8. It should be free from social & psychological bases of the planners as well as
the sub-ordinates
9. There should be proper co-ordination among short-term & long-term plans
 Objectives of planning:

1. Planning helps in effective forecasting

2. Planning provides certainty in the activities
3. Planning gives a specific direction to the organization
4. It establishes co-ordination in the enterprise
5. It is helpful in creating a healthy competition
6. It provides economy in the management
7. It can forecast the risk
8. It provides important information
9. It is helpful in facing competition
10. It is very much helpful in the accomplishment of budgets
 Scope and Performance of Planning
Planning and Performance
Generally there is a positive relationship between planning, and performance,
but we can’t say that organizations that formally plan always outperform those
don’t plan.
Scope of Planning
Scope of planning involves identifying the goals, objectives, task, resource,
budget and timeline.
 Why do Managers Plan
Why Do Managers Plan? Planning seems to take a lot of effort. So why should managers plan? We can give
you at least four reasons:
1. Planning provides direction to managers and non-managers alike. When employees know what their
organization or work unit is trying to accomplish and what they must contribute to reach goals, they can
coordinate their activities, cooperate with each other, and do what it takes to accomplish those goals.
Without planning, departments and individuals might work at cross-purposes and prevent the
organization from efficiently achieving its goals.
2. Planning reduces uncertainty by forcing managers to look ahead, anticipate change, consider the impact
of change, and develop appropriate responses. Although planning won’t eliminate uncertainty, managers
plan so they can respond effectively.
3. Planning minimizes waste and redundancy. When work activities are coordinated around plans,
inefficiencies become obvious and can be corrected or eliminated.
4. Planning establishes the goals or standards used in controlling. When managers plan, they develop goals
and plans. When they control, they see whether the plans have been carried out and the goals met.
Without planning, there would be no goals against which to measure work effort.
 Planning and Performance

Planning and Performance Is planning worthwhile? Numerous studies have looked at the

relationship between planning and performance. Although most have shown generally

positive relationships, we can’t say that organizations that formally plan always outperform

those that don’t plan. But what can we conclude? First, generally speaking, formal planning

is associated with positive Financial results—higher profits, higher return on assets, and so

forth. Second, it seems that doing a good job planning and implementing those plans play a

bigger part in performance than how much planning is done.

 Approaches to Planning
In the traditional approach, planning is done entirely by top-level managers who often are

are assisted by a formal planning department, a group of planning specialists whose sole

responsibility is to help write the various organizational plans. Under this approach, plans

developed by top-level managers flow down through other organizational levels, much like

the traditional approach to goal-setting. As they žflow down through the organization, the

plans are tailored to the particular needs of each level. Although this approach makes

managerial planning thorough, systematic, and coordinated, all too often the focus is on

developing “the plan”—a thick binder (or binders).

 Approaches to Planning

formal planning department A group of planning specialists whose sole responsibility is

helping to write organizational plans IBM replaced its traditional annual top-down

planning process with an ongoing planning approach that involves employees from line

managers to senior executives. The new approach enables IBM to explore and identify

customer needs, new markets, technologies, and competitors from around the world and

to create new ventures

 Types of Planning

1.Types of Planning in General

• Formal planning: Written and shared with organizational members, written, specific, and

long-term focus, involves shared goals for the organization. Specific, time-oriented goals,

goals written and shared

• Informal Planning: not written down, short-term focus; specific to an organizational unit.
 Types of Plans in Terms of Time Frame

2.Types of Plans in Terms of Time Frame

Long-Term Plans

Plans with time frames extending beyond 5 years, Long Term Planning is considering for a time
period of 5 years Example#1 Strategic Planning is some Time beyond 5 years

Medium-Term Planning

Medium-term planning is considering for a period of 1-5 Years.

Short-Term Plans

Plans with time frames on one year or less

3.Types of Plans in Terms of Management/Frequency of Use

• Single-Use Plan

• A one-time plan specifically designed to meet the need of a unique situation.

• Standing Plans

• Ongoing plans that provide guidance for activities performed repeatedly.

 Types of Plan in Terms of Specificity
4. Types of Plan in Terms of Specificity

Specific Plans

Plans that are clearly defined and leave no room for interpretation

Directional Plans

Flexible plans that set out general guidelines and provide focus, yet allow discretion in
implementation
 In Terms Breadth Type Plans

5.In Terms Breadth Type Plans

Strategic Plans
• Apply to the entire organization.

• Establish the organization’s overall goals.

• Seek to position the organization in terms of its environment.

• Cover extended periods of time.

Operational Plans
• Specify the details of how the overall goals are to be achieved.

• Cover a short time period.

plans:
Founder, Board of Directors, or Top Managers

• Mission statement: Broad organizational goal which

justifies an organization's existence.

Top & Middle Managers

• Strategic plans: Plans designed to meet an organization's

broad goals.

Middle & First Line Managers

• Operational plans: Plans that contain details for carrying

out, or implementing, the strategic plans in day -to -day
activities.
 PROCESS/STEPS IN PLANNING

1. BEING AWARE OF OPPORTUNITIES:

An awareness of opportunities in the external environment as well as within the

organization is the real starting point for planning

2. ESTABLISHING OBJECTIVES :

The second step in planning is to establish objectives for the entire enterprise and then for
each subordinate work unit

3. DEVELOPING PREMISES:

Premises are assumption about the environment in which the plan is to be carried out
 PROCESS/STEPS IN PLANNING

4.DETERMINING ALTERNATIVE COURSES:

• The forth step is planning is to research for and examine alternative courses of action.

5.EVALUTATIN ALTERNATIVE COURSES :

• After seeking out alternative courses and examining their strong and weak points, the
next step is to evaluate the alternatives by weighing them in light of premises and goals.

6.SELECTING A COURSES:

• This is the point at which the plan is adopted-the real point of decision-
making.
The Steps Of the Planning
Process
8 Budgeting.

7 Formulating Derivative Plans

6 Selecting a Course.

5 Evaluating Alter native Courses.

4 Determining Alternative Courses.

3 Developing Premises.

2 Establishing Objectives.

1 Being aware of Opportunities.

 Contemporary issues in Planning

We conclude this chapter by addressing three contemporary issues in planning.

Specifically, we’re going to look at how managers can plan effectively in dynamic

environments; how managers can use environmental scanning, especially competitive

intelligence; and how digital tools can be used to assist in planning activities