Organizational Planning & Goal Setting

1. ORGANIZATIONAL PLANNING AND GOAL SETTING Chapter 7: MANAGEMENT 6 th Edition By: Richard Daft Prepared by: GREGAR DONAVEN E. VALDEHUEZA, MBA Lourdes College Instructor

4. External Message Legitimacy for: investors, suppliers, customers, community Internal Message legitimacy, motivation, guides, rationale, standards Mission Statement Strategic Goals/Plans Senior Management (organization as a whole) Tactical Goals/Plans Middle Management (major divisions, functions) Operational Goals/Plans Lower Management (departments, individuals)

7. Mission Statement Strategic Goals/Plans Senior Management (organization as a whole) Tactical Goals/Plans Middle Management (major divisions, functions) Operational Goals/Plans Lower Management (departments, individuals)

14. MISSION Finance V.P. Keep outstanding accounts below $500,000 Keep borrowing below $2 million Provide monthly budget statements for departments Have delinquent accounts of no more than 2% of total Supervisor – Automatic Machines Produce 150,000 standard units at average cost of $16 Have machine downtime of less than 7% Respond to employee grievances within 24 hours STRATEGIC GOALS President 12% return on investment ; 5% growth No employee layoff ; Excellent service to customer TACTICAL GOALS Production V.P. Manufacture 1,200,000 products at average cost of $19 Increase manufacturing productivity by 2% Resolve employee grievances within 3 working days OPERATIONAL GOALS Accounts Receivable Manager Issue invoices within 5 days of sale Check new customers’ credit within 1 working day Allow no account to be overdue more than 5 months Call delinquent accounts weekly Manufacture both standard and custom metal products for various applications in the machine tool industry

20. 5. Too much paperwork saps MBO energy. 4. Mechanistic organizations and values that discourage participation can harm the MBO process. 4. Departmental and individual goals are aligned with company goals. 3. Strategic goals may be displaced by operational goals. 3. Employees are motivated. 2. An environment of poor employer-employee relations reduces MBO effectiveness. 2. Performance can be improved at all company levels. 1. Constant change prevents MBO from taking hold. 1. Manager and employee efforts are focused on activities that will lead to goal attainment. Problems with MBO Benefits of MBO