Traditional goal setting : goals set by top managers flow down through the organization and become sub-goals for each organizational area. Management by objectives: a process of setting mutually agreed-upon goals and using those goals to evaluate employee performance

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Planning and Goal setting

Q: Does formal planning improve organizational performance?

Formal planning generally means higher profits , higher return on assets, and other positive financial results. Quality of planning process and the appropriate implementation of the plan probably contribute to more high performance than does the extent of planning In those organizations where formal planning did not lead to higher performance, the environment (e.g. governmental regulations, unforeseen economic challenges) was often to blame.

Q: What strategies do managers use?

Corporate - what business to be in and what to do in those Growth (expanding) concentration vertical integration horizontal integration diversification Stability strategy (during periods of uncertainty) Renewal (address declining performance) Retrenchment strategy Turnaround strategy Competitive strategy - How to compete cost leadership differentiation focus stuck in the middle The functional - strategy that varies within the different departments

5 important questions on Planning and Goal setting

Does formal planning improve organizational performance?

Formal planning generally means higher profits, higher return on assets, and other positive financial results.
Quality of planning process and the appropriate implementation of the plan probably contribute to more high performance than does the extent of planning
In those organizations where formal planning did not lead to higher performance, the environment (e.g. governmental regulations, unforeseen economic challenges) was often to blame.

Why is strategic mgt important?

- Makes differences in performances
- Because of change, examine relevant factors in planning future actions
- Organizations are complex and diverse

What strategies do managers use?

Corporate - what business to be in and what to do in those

Growth (expanding)

concentration
vertical integration
horizontal integration
diversification

Stability strategy (during periods of uncertainty)
Renewal (address declining performance)

Retrenchment strategy
Turnaround strategy

Competitive strategy - How to compete

cost leadership
differentiation
focus
stuck in the middle

The functional - strategy that varies within the different departments

How to set goal?

Traditional goal setting: goals set by top managers flow down through the organization and become sub-goals for each organizational area.
Management by objectives: a process of setting mutually agreed-upon goals and using those goals to evaluate employee performance

What is the cascading method?

the waterfall. What happens at an upper lower, has effect in lower levels. This can also be the other way around (from bottom to upper level). This is not only something done through traditional goal setting. Organization goals – department goals – team goals – individual goals. Cascading is used in both traditional goal setting as well as in management by objectives.