PreTest: Group Work

1. Planning definition2. Purposes of planning3. Difference between goal and plan4. Types of plans5. Steps in goal setting

1st Core Management Function: Planning

What is planning?

What is ‘Planning’?

Planning involves:

◦Defining the organization’s goals (in specific time period)

◦Establishing strategies for achieving those goals

◦Developing plans to integrate and coordinate work activities

Proposes of Planning

Provides direction

Reduces uncertainty

Minimizes waste and redundancy

Establishes the goals or standards used in controlling

Goals (objectives)

are desired outcomes or targets

are foundation of planning

Plans

are documents that outline how goals are going to be met

usually include resource allocations, schedules, and other necessary actions to accomplish the goals

Types of Goals

Types of Goals (I)

Financial goals: goals are related to financial performance of org.

Strategic goals: goals are related to all other areas of org.’s performance

McDonald’s states its financial targets are 3-5% average annual sales and revenue growth

Nissan released new GT-R supercar to beat the performance of Porsch’s 911 Turbo

Types of Goals (II)

Stated goals: official statements of what an organization says and wants others to believe its goals are (can be found in organization written announcement i.e. annual report or PR announcement)

Real goals: goals an organization actually pursues (by observing what organizational member are doing)

Tesco’s goal is to “create value for customers to earn their lifetime loyalty”

Stated goals are often irrelevant to what actually goes on

Many U.S. universities claim their goal is limiting class sizes, facilitating close student-faculty relationships, but they commonly hold 300+ student lecture classes!

Types of Plans

BreadthTime

FrameSpecificity

Frequency of Use

Strategic

Operational

Long term

Short term

Directional

Specific

Single use

Normal use

1 2 3 4

Types of Plans (by breadth)

Strategic plans: plans that apply to entire org. and establish the org.’s overall goals (broad plans)

Operational plans: plans that encompass a particular operational area of org. (narrow plans)

Types of Plans (by time frame)

Long-term plans: plans with a time frame beyond 3 years

Short-term plans: plans covering 1 year or less

(In between short and long plans is intermediate plan)

Types of Plans (by specificity)

Specific plans: plans that are clearly defined and no ambiguity might cause any misunderstanding

Directional plans: plans that are flexible which set out general guidelines (provide focus but not lock managers into specific goals or courses of action)

Types of Plans (by frequency of use)

Single-use plan: one-time plan specifically designed to meet the needs of a unique situation

◦ Project: plan that specify activity, work methods or process, time frame (start-end), and other details that are required to accomplish one specific goal

◦ Program: plan that comprises of more than one relevant activities or projects to accomplish the goal

Types of Plans (by frequency of use)

Standing plans: ongoing plans that provide guidance for activities performed repeatedly include policies, rules, and procedures◦ Rules: a formal and widely-accepted statement of plan all org. members

need to strictly apply◦ Policy: a deliberate plan of action to guide decisions and achieve rational

outcome(s), it’s a broader scope, as a guideline to achieve specific goal, than rule

◦ Procedures: specified series of actions or operations which have to be executed in the same manner in order to always obtain the same result under the same circumstances to avoid any confusion of work sequences

Contingency plan: it will be used when any emergency situation occurs or failure of current plan occurs and cannot be implemented

Planning Process

Planning Process

Mission stateme

nt

Vision stateme

nt

Strategic planning

Tactical planning

Operational

planning

Goals GoalsGoals

Action Plans

Action Plans

Action Plans

1

2

3

Mission Statement

“What is our reason for being?” = the purpose of organization = talks about company’s present

It is a broad statement that provides an overall guide to what organizational members think is important

Top management and the board of directors are

responsible for formulating a mission statement

Vision Statement

“What do we want to become?”= a long-term goal describing “what” an

organization wants to become. = talks about company’s future

“It should describe what’s happening to the world you compete in and what you want to do about it” (from Fortune article)

Top managers are responsible for developing vision statement after formulate mission statement

Ford Motor Company

Mission Statement “We are a global family with a proud heritage,

passionately committed to providing a personal mobility for people around the world. We anticipate consumer needs and deliver outstanding products and services that improve people’s lives.”

Vision Statement “Our vision is to become the world’s leading

consumer company for automotive products and services.”

The Minor Food Group

Our vision is to be a global integrated operator of multiple restaurant concepts with the objective of providing 100% satisfaction to all stake holders. Our core values are to:◦be customer focused ◦be results oriented ◦develop people ◦be innovative

Gloria Jean’s Coffees

The Gloria Jean’s Coffees Vision is to be the most loved and respected coffee company in the world.

To achieve our Vision we are committed to serving you, our guests, with the consistently highest quality coffee and outstanding personalized service in a vibrant store atmosphere. Our Values are based on… ◦ a commitment to excellence ◦ building partnerships that are based on integrity and trust ◦ a belief in people and changing lives ◦ fostering a culture of joy and passion throughout our

company

Our Starbucks Mission

To inspire and nurture the human spirit— one person, one cup, and one neighborhood at a time.

Here are the principles of how we live that every day: Our Coffee

It has always been, and will always be, about quality. We’re passionate about ethically sourcing the finest coffee beans, roasting them with great care, and improving the lives of people who grow them. We care deeply about all of this; our work is never done.

Our PartnersWe’re called partners, because it’s not just a job, it’s our passion. Together, we embrace diversity to create a place where each of us can be ourselves. We always treat each other with respect and dignity. And we hold each other to that standard.

Our CustomersWhen we are fully engaged, we connect with, laugh with, and uplift the lives of our customers— even if just for a few moments. Sure, it starts with the promise of a perfectly made beverage, but our work goes far beyond that. It’s really about human connection.

Our StoresWhen our customers feel this sense of belonging, our stores become a haven, a break from the worries outside, a place where you can meet with friends. It’s about enjoyment at the speed of life—sometimes slow and savored, sometimes faster. Always full of humanity.

Our NeighborhoodEvery store is part of a community, and we take our responsibility to be good neighbors seriously. We want to be invited in wherever we do business. We can be a force for positive action— bringing together our partners, customers, and the community to contribute every day. Now we see that our responsibility—and our potential for good—is even larger. The world is looking to Starbucks to set the new standard, yet again. We will lead.

Our ShareholdersWe know that as we deliver in each of these areas, we enjoy the kind of success that rewards our shareholders. We are fully accountable to get each of these elements right so that Starbucks—and everyone it touches—can endure and thrive.

Environmental Mission Statement

Starbucks is committed to a role of environmental leadership in all facets of our business.

We fulfill this mission by a commitment to:◦ Understanding of environmental issues and sharing information

with our partners. ◦ Developing innovative and flexible solutions to bring about

change. ◦ Striving to buy, sell and use environmentally friendly products. ◦ Recognizing that fiscal responsibility is essential to our

environmental future. ◦ Instilling environmental responsibility as a corporate value. ◦ Measuring and monitoring our progress for each project. ◦ Encouraging all partners to share in our mission.

Planning Process

Mission stateme

nt

Vision stateme

nt

Strategic planning

Tactical planning

Operational

planning

Goals GoalsGoals

Action Plans

Action Plans

Action Plans

Strategic Planning: 1-5 Years

Top management Focus on…

Chief Executive Officer, president, vice president, general managers, division heads

Long-term decisions about overall direction of organization.

Managers need to pay attention to environment outside organization, be future-oriented, deal with uncertain and highly competitive conditions.

Tactical planning: 6-24 months

Middle management Focus on…

Functional managers, product-line managers, department managers

Implement policies and plans of top management

Supervise and coordinate activities of first-line managers

Make decisions often without base of clearly defined information procedures

Operational Planning: 1-52 weeks

First-line management Focus on…

Unit managers, team leaders, first-line supervisors

Direct daily tasks of nonmanagerial personnel; decisions often predictable, following well-defined set of routine procedures

Goals Types

1. Strategic Goals

2. Tactical Goals

3. Operational Goals

1. are set by and for top management and focus on objectives for the organization as a whole which may contain org. areas of market, innovation, human resources, financial resources, physical asset, productivity, social responsibility, and profit

2. are set by and for middle managers and focus on the actions needed to achieve strategic goals

3. are set by and for first-line managers and are concerned with short-term matters associated with realizing tactical goals

Mission “To produce products are satisfied customer need

and maximize stakeholders benefit

with ethical practices”

Strategic Goal- To increase market share from 20% to 30% and double the productivity within 3 years-To remain the sales profit level of 20% -To remain the 50% of net profit as a dividend

Operation Director- To reduce cost of production 3% per year- To increase 25% productivity by this year

Marketing Director- To introduce 3 new product items to the market by this year- To increase sales volume of 20% by this year

Financial Director- To remain the proportion of assets:liability as 2:1- To get Bht 50 million loan from bank by this year

Plant Manager- To reduce wastage less than 50 ppm by this year- To employ 100 new staff to increase production capacity

Marketing Manager- To launch 3 new TVC advertisements within 3 months- To have organization’s news release at least 5 news via each type of media

Financial Manager- To send the financial analysis to all affiliates within 7 days starting from the day receiving the budget

Mission

Strategic Goals

Tactical Goals

Operational Goals

Example

Setting SMART Goals

Setting SMART Goals

Specific

Measurable

Attainable

Results-Oriented

Target Dates

= SMART Goals

Example: An airline business

Specific

“As many planes as possible should arrive on time”

“90% of planes should arrive within 15 minutes of scheduled arrival time”

Measurable

“As many planes as possible should arrive on time”

“90% of planes should arrive within 15 minutes of scheduled arrival time”

Attainable

Not too easy as “half the flights should arrive on time”

Not impossible as “all flights must arrive on time, regardless of weather”

The goal should be challenging, realistic, and achievable within the scope of the time, equipment, and financial support available

Results-Oriented

The goals should focus on the relevant outcome which support the organization’s mission and vision

In writing out the goals, start with the word “To” and follow it with action-oriented verbs— “complete,” “acquire,” “increase” to show what should be the expected result from this goal setting

For example “to decrease by 10% the time to get passengers settled in their seats before departure”

Target Dates

“From tomorrow onward, 90% of planes should arrive within 15 minutes of scheduled arrival time”

“90% of planes should arrive within 15 minutes of scheduled arrival time start from the next quarter onward”

Too soon to accomplish?

Summary: Steps in Goal Setting

1. Review the organization’s mission, or purpose - goals should reflect mission

2. Evaluate available resources – goals should be possible to accomplish with the available resources

3. Determine the goals individually or with input from others – goals should be in the same direction with other org.’s unit goals

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

5. Review results and whether goals are being met – if not, change them as needed

Well-Written Goals

Written in terms of outcomes rather than actions

Measurable and quantifiableClear as to a time frameChallenging yet attainableWritten downCommunicated to all necessary

organizational members

KKUIC Student Union: Sports Division

Mission Statement

We are the team to support KKUIC students’ sport activities which include athletes and supportive teams in order to encourage students the outside-classroom learning of sportsmanship, sense of group loyalty and ability to work as a team.

Vision Statement

Our vision is to build KKUIC the high reputation in sports and cheering teams both in campus and national level.

SMART Goal: KKU Inter-faculty Games 2012

In KKU Inter-faculty Games, 75% of KKUIC students, including athletes and supportive teams, will participate the games.

Action Plans

SU Sport Division: Identify types of sport KKUIC will join and the estimation of the budget

for this event

Write to project proposal for budget from KKUIC

Announce KKUIC students about this event and persuade them to be a part of it and not forget to mention about activity points they are going to get

Being the contact center for KKUIC sport managers and KKU sport division

Allocate budget for each sport once the project proposal is approved and collect all expense records from each sport managers

Clear up all expenses for this project and report all match results to KKUIC Student Development

Evaluate the project by summarizing all the figures of participants both athletes and supportive teams

Action Plans

Athletes◦ Announce students information about the games and its

necessity via both meetings and announcement boards

◦ Applications are opened for athletes and managers in all sports with specified due date

◦ Once we have athletes and managers, managers have to arrange practice schedules, provide them all supports within given budget, be the coordinator for athletes and KKU sports division, and keep the record of no. of athletes

◦ After games finish, managers are required to clear up all expenses for that sport and submit all the match results to KKUIC SU sports division

Action Plans

Supportive Teams◦Announce students information about the games and its

necessity via both meetings and announcement boards

◦Applications are opened for supportive team manager and supportive members (students who are not interested in being athlete in any kind of sports) with specified due date

◦Once we have managers, managers have to organize how they are going to cheer up KKUIC teams, coordinate with sport managers on the schedule of the matches, and keep the record of no. of supportive members

Approaches to Setting Goals

Approaches to Setting Goals

A) Traditional Goal SettingB) Management by Objectives (MBO)

A) Traditional Goal Setting

An approach to setting goals in which top managers set goals that flow down through the organization and become subgoals for each organizational area

B) Management by Objectives (MBO)

A process of setting mutually agreed upon goals and using those goals to evaluate employee performance

The purpose of MBO is to motivate rather than control subordinates

4 Elements of MBO Program

Goal specificity

Participative decision making

Explicit time period

Performance feedback

Steps in MBO

1. The organization’s overall objective and strategies are formulated

2. Major objectives are allocated among divisional and departmental units

3. Unit managers collaboratively set specific objectives for their units with their managers

4. Specific objectives are collaboratively set with all department members

5. Action plans, defining how objectives are to be achieved, are specified and agreed upon by managers and employees

6. The action plans are implemented7. Progress toward objectives is periodically reviewed, and

feedback is provided8. Successful achievement of objectives is reinforced by

performance-based rewards

Characteristics of Good Plans

1. Practical and Goal Oriented: be a realistic plan

2. Clear: everyone get the same direction and no question after reading plan

3. Cost Effective and Efficient: concern with effective and efficient ways of using resources

4. Flexible and Adaptable with any situation

5. Acceptable by all relevant units

Planning Tools

1. Function-oriented Project Management: it is a plan for specific project that manager need to include the major functions such as objectives, time frame, location, method or procedure, staff, responsible person or unit, and budget

2. Responsibility-oriented Project Management: clearly identify the person who is responsible for each function with details of responsibility area and time frame

3. Gantt Chart

Gantt Chart

A Gantt chart is a type of bar chart that illustrates a project schedule.

Gantt charts illustrate the start and finish dates of the terminal tasks and summary tasks of a project.

Source: http://en.wikipedia.org/wiki/Gantt_chart

New product design and sales

Plan Responsibility 2012 2013

Oct Nov Dec Jan Feb Mar

1. New product design

Production + Marketing departments

2. Product testing and modification

Production + Marketing departments

3. Promotion plan Marketing + Sales departments

4. Production Production department

5. Product distribution

Sales department

6. Promotion activities

Marketing department

Contingency Factors in Planning

1. Organizational level: different level of managers and their different types of planning

2. Degree of environmental uncertainty: when the uncertainty is high, plan should be specific but flexible to any unexpected change

3. Length of future commitments: i.e. planning for too long or too short a time period is inefficient and ineffective

Effective Planning in Dynamic Environments

Using plans that are specific but flexible.

Keep organizational hierarchy flatter helps make planning more effective.