Time Span of Goals and Plans
1. Strategic goals and plans generally involve
time periods of 3-5 years.
2. Tactical goals and plans typically involve time periods of 1 to 3
3. Operational goals and plans can be for as short a period as 1 week or
as long as 1 year.
Characteristics of Well-Designed Goals
a. Written in terms of outcomes
b. Measurable and quantifiable
c. Clear as to a time frame
d. Challenging but attainable
e. Written down
f. Communicated to all organizational members
Steps in Goals Setting—Five Steps
a. Review the organization’s mission.
Goals should reflect what the mission statement says.
b. Evaluate available resources.
c. Determine individually, or with input from others, the goals.
d. Write down the goals and communicate them to all who need to know.
e. Review results and whether goals are being met.
The process of developing plans is influenced
by three contingency factors and by the planning approach
1. Contingency Factors in Planning.
a. Manager’s level in the organization.
Operational planning usually dominates the planning activities of
lower-level managers. As managers move
up through the levels of the organization, their planning becomes more
b. Degree of environmental uncertainty. The greater the environmental
uncertainty, the more plans
should be directional and emphasis placed on the short term.
1) When uncertainty is high, plans should be specific, but flexible.
2) Managers must be prepared to rework and amend plans, or even to
abandon their plans.
c. Length of Future Commitments.
1) Commitment concept means that plans should extend far enough to meet
made when the plans were developed.
2) Planning for too long or for too short a time period is inefficient
Approaches to Establishing Goals
Goals can be established through a process of
traditional goal setting or through management by objectives
Traditional goal setting
is defined as the process whereby goals are
set at the top of the
organization and then broken down into sub goals for each level in an
1) Top managers are assumed to know what’s best because they see the
2) These goals are also often largely non operational.
3) Specificity is achieved as each manager applies his or her own set of
interpretations and biases.
4) However, what often results is that
objectives lose clarity and
unity as they move from top to bottom.
5) When the hierarchy of objectives is clearly defined, it forms an
in which higher-level objectives are
linked to lower-level objectives. These lower-level objectives
serve as the means for the accomplishment of the higher-level
objectives. And the goals at the lower levels (means) must be
achieved in order to reach the goals at the next level (ends.)
Goal setting has some potential pitfalls
1. Setting difficult goals increases the
that they will not be reached.
2. High goals may increase the stress
levels of organizational members.
3. Failure to meet high goals may undermine the
4. Non goal areas
may be ignored.
5. Setting goals may encourage excessive
6. Inappropriate goals may lead to
dishonesty and cheating.
Management by Objectives
Management by objective (MBO) is a process
through which specific goals are set collaboratively for the
organization as a whole and every unit and individual within it; the
goals then are used as a basic for
planning, managing organizational activities, and assessing and
In Management by objectives (MBO)
specific performance goals are jointly
determined by employees
and their managers, progress toward accomplishing these goals is
periodically reviewed, and rewards are
allocated on the basis of this progress.
1) MBO was first described by Peter Drucker and consists of four
i) Goal specificity
ii) Participative decision making
iii) Explicit time period
iv) Performance feedback
2) MBO makes objectives operational through the process by which they
cascade down through the
Although there is considerable variation across organizations, MBO
processes typically include six steps.
1. Organizational goals are developed based on organizational missions.
2. Specific goals are established for departments, subunits, and
a. In the top-down process, upper-level managers, conferring with their
immediate managerial subordinates, formulate specific objectives for
areas of responsibility. These in turn enter into the formulation of
objectives for the next level down, and so forth.
b. In the bottom-up process, operational goals are proposed by
managers on the basis of what they think they can achieve. These in turn
are developed into tactical and finally strategic plans.
3. Action plans are formulated, describing what is to be done, how,
when, where, and
by whom in order to achieve a particular goals.
4. Individuals are given the responsibility of reaching their objectives
and that goals
will ultimately be met.
5. Performance is appraised at the end of the goal-setting cycle,
typically at one-year
intervals. Praise, recognition, and rewards should be given for
of MBO are that it
1. Aids coordination of goals and plans.
2. Helps clarify priorities and expectations.
3. Facilitates vertical and horizontal communications.
4. Fosters employee motivation.
of MBO are that it
1. Tends to falter without strong, continual commitment from top
2. Necessitates considerable training of managers.
3. Can be misused as a punitive device.
4. May cause overemphasis of quantitative goals.
The “spirit” of MBO is tremendous. In practice however, MBO has been
successful only about 20 to 25
percent of the time, primarily because of lack of support from top
management and poor goal-setting and