Professional Documents
Culture Documents
He who will not worry about what is far off will soon find something worse than worry
Microsofts Windows Is everywhere Revenues & stock prices are at an all time high If Bill plans succeed, one wont be able to escape Microsoft
Software will follow you on vacations Riding along in your car to map out the best travel route Control your appliances & feed programs & information to an entire citys television sets
Why should Bill Gates worry about the future & suffer new product setbacks rather than concentrate on the business that has made Microsoft a dominant corporate Power?
Difficult for employees & top executives to see the need to contemplate future developments when a Company is successful like Microsoft Bill Gates as a leader to decide where he wants the Company to be in future & how to get there
If you were in gates position, how would you make sure Microsoft employees keep todays business healthy while also taking a long-range view toward an uncertain future?
Goal
Desired future state that Organization attempts to realize Goals are important because Organization exists for a purpose & goals define and state that purpose Example: P&G set goal of doubling its revenues over a 10 year period GE: every business owned by the firm would be either number 1 or number 2 in its industry
PLAN
Is a blue print for goal achievement & specifies the necessary resource allocations, schedule, tasks & other actions Goals specify future ends Plans specify todays means
Planning Example:
Compaq Goal to transform itself from a supplier of PCs to corporations into a maker of Machines for every market
From small pocket communicators to home computers, all at high competitive price
Levels of Goals
Levels of Strategies
A Large Company
Corp Level Strategy making is not just a task for top executive All managers at all level must be involved
Division Level
Functional Level
Operational Level
Mission Statement Our mission is to operate a chain of restaurants that will prepare & serve high quality food on timely basis & at reasonable prices
Start or purchase new restaurant Chain within few years Provide 14% return to investors for at least 10 years Increase per store sales 5% per year for 10 years Target & attract two new market segments during next 5 years Develop new promotional strategy for next year
VP-Marketing
Keep corporate debt to no more than 20% of liquid assets for next ten years Revise computerized accounting system with in five years
VP- Finance
Restaurant Manager Hire & train new assistant manager Decrease waste by 5% this year Implement incentive system within 1 year
Advertising Director
Implement this years promotional strategy Develop regional advertising campaigns with in 1 year Negotiate 5 % lower advertising rates next yr
Accounting Manager
Competitive payroll system for each restaurant this year Pay all invoices within thirty days
Mission Statement
Goals In Organizations
Organizational Mission The Organization reason for existence Describes the Organizations values, aspirations and reason for being Well-defined mission is the basis for development of all subsequent goals and plans More than half of the companies in the US now have a formal statement of some kind
A facilitator, or committee of top mangers- merge these statements into a single document & distribute the draft to all mangers
Request for modifications, additions, deletion is needed next along with meeting to revise to revise the document
Process of developing a mission statement represents a great opportunity for strategists to obtain needed support from all managers in the firm
Customers
Products Services
Markets
Technology Employees
Mission Elements
Survival Growth Profit Self-Concept Philosophy
Public Image
Who are the firms customers Customers What are the firms major products or Product/Service services?
Geographically, where does the firm compete? Markets Is the firms Technology Current Technology Concern for survival, growth & profitability
Is the firm committed to growth & financial soundness ?
What are the basic beliefs, values, aspiration & ethical priorities of the firm?
Organization
Customers
Products Services
Markets
Technology
PepsiCo Dell
Yes Yes
No Yes
No Yes
Yes Yes
No Yes
COMPONENTS
Organization
Philosophy
SelfConcept
Yes No
No Yes
No Yes
No No
Strategic Goals
Broad statement describing where the organization wants to be in the future They pertain to the Org as a whole rather than to specific divisions or departments Also called official goals, because they are the stated intentions of what the organization wants to achieve Ex: P&G goal to double the sales revenues
Strategic Plans
The action steps by which the company intends to attain strategic goals The strategic plan is the blueprint that defines the organizational activities and resource allocations in the form of cash, personnel, space & facilities required for meeting these targets The purpose of strategic plans is to turn organizational goals into realities within that time period Plans are set by BOD & Top management Have extended time Horizon
Tactical Goals
The results that major divisions and departments within the organization intend to achieve These goals apply to middle management and describe what major subunits must do in order for the Org to achieve its overall goal Ex: P&G might center on which new products to launch, which existing products to revise, and so forth
Tactical Plans
Designed to help execute major strategic plans & to accomplish a specific part of the companys strategy Have a shorter time horizon than strategic plans The word tactical comes from the military Define what the major departments & organizational subunits will do to implement the overall strategic plan It involves middle management
Operational Goals
Are set by and for lower level managers Specific results are expected from departments, work groups and individuals They are precise and measurable Process 150 sales applications each week
achieve 90 % of deliveries on time Example: P&G might target number of new products to launch each of the next five years
Operational Plans
Developed at the lower levels of the Org to specify action steps toward achieving operational goals & to support tactical plans Have a short-term focus & relatively narrow in scope Is the departments managers tool for daily & weekly operations Goals are stated in quantitative terms & the departments plan describes how goals will be achieved Operational planning specifies plans for supervisors, deptt managers and individuals employees Example: Book
Goal Hierarchy
Example : Strategic goal translate Lower mangT level Excellence service to customers Open new sales office
emerging areas of service opportunities 2.Improve marketing of existing products 3. develop a strategic market plan based on customer needs
How ever if goals are too easy, employee may not feel motivated Managers should, however make sure that goals are set within the existing resource base, not beyond depts time, equipment & financial resource
( Kmart: set a goal to have more revenues than Wal-Mart next year)
Linked To Rewards
The ultimate impact of goals depends on the extent to which salary increases, promotions and awards are based on goal achievement People who attain goals should be rewarded
Rewards give meaning & significance to goals and help commit employee to achieving goals Failure to attain goals often is due to factors outside employees control Example: Federal Express stated goal of encouraging risk Lost $233 M on an unsuccessful service called Zapmail, no one was punished
Single Use Plans: developed to achieve a set of goals that are not likely to be repeated in the future
Non programmed decision making of a kind situation
Programs Projects
Programs
Projects
A single use plan for a large Plans created to set of activities complete various aspects of a program Integrated set of plans Project may be a part of broader program
Example: NASA (to reach moon) Example : Lunar model capable of landing on the moon and returning to the earth
Standing Plans
Are the ongoing plans that are used to provide guidance for tasks performed repeatedly within the organization Policies Standing Operating Procedures Rules & Regulations
Rules & Regulations : Narrowest of the standing plans, describe exactly how specific activities are to be carried out
McDonalds prohibiting customers from using its telephones
Standing Plan : Ethical behavior by employees Policy : Employees expected to behave ethically in their dealings with suppliers & customers Rule : Requires any employee who receives from customer a gift larger than $10 report the gift SOP: recipient of the gift to make disclosure in writing with in 30 days
MBO
Is a method whereby managers and employees define goals for every department, project, and person and use them to monitor subsequent performance 1) Setting Goals 2) Developing Action Plans 3) Reviewing Progress 4) Appraising overall Performance
Setting Goals
This is the most difficult step in MBO Setting goals involves employees at all levels and looks beyond day-to-day activities to answer the question What are we trying to accomplish? A good goal should be concrete & realistic, provide a specific target & time frame & assign responsibility Goals maybe quantitative or qualitative, depending on whether outcomes are measurable Example: salesperson Jones will obtain 16 new accounts in December Quantitative terms Marketing will reduce complaints by improving customer service next year Qualitative terms Mutually agreed : All members should participate in setting goals
Reviewing progress
A periodic progress review is important to ensure that action plans are working. These reviews can occur informally between managers and subordinates (Org may wish to conduct 3, 6, 9 month reviews during the year) this checkup allows managers & employees to see whether they are on target or whether corrective action is necessary The point of MBO is to achieve goals The Action plan can be changed whenever goals are not being met
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Summary