New Era of Management: Richard L. Daft 10th Edition

NEW ERA OF
MANAGEMENT
RICHARD L. DAFT
10th edition
Planning and Goal
Setting
CHAPTER 7
Chapter Topics to discuss
7-8
Environment of Management
History of Management Corporate Culture, Ethics and
Evolution of Management Social Responsibility
thinking
Management
Planning Leading Controlling
Organizing
-Leadership -Managerial and
-Managerial planning -Motivation Quality control
& goal setting -Designing adaptive -Communication
- Strategy organizations -Teamwork
formulation & -Managing change &
Implementation innovation
- Managerial -Human resource
decision
3 making Management
Chapter
Topics to discuss
7-8
1. Managerial Planning and Goal
Setting (CH7)
2. Strategy Formulation and

Implementation (CH8)
15/03/2023 4
Chapter
7-8
1. Planning and Goal Setting (CH7)
15/03/2023 5
Chapter Chapter Outline
7-8
4. Benefits and Limitations of
1. Overview of the goal-setting
Planning
and planning process
5. Planning for a turbulent
− Levels of goals and plans
environment
− The organizational planning
− Contingency planning
process
− Crisis Planning
2. Goal-setting in Organizations
− Building Scenarios
− Organizational Mission
6. Innovative approaches to
− Goals and Plans
Planning
− Strategy maps
➢ Set Stretch goals for excellence
3. Operational Planning
➢ Use performance dashboards
− Criteria for effective goals
➢ Deploy intelligence teams
− Management by Objectives
− Single-use and Standing Plans
15/03/2023 6
Chapter
Learning Outcomes
7-8
• Define goals and plans and explain the relationship between them.
• Explain the concept of organizational mission and how it influences goal
setting and planning.
• Describe the types of goals an organization should have and how
managers use strategy maps to align goals.
• Define the characteristics of effective goals.
• Describe the four essential steps in the management by objectives (MBO)
process.
• Explain the difference between single-use plans and standing plans.
• Describe and explain the importance of contingency planning, scenario
building, and crisis planning in today’s environment.
• Summarize the guidelines for high-performance planning in a fast-
changing environment.
7
Copyright ©2010 by South-Western, a division of Cengage
Learning. All rights reserved.
Chapter
PART 1
7-8
• OVERVIEW OF THE GOAL-SETTING
AND PLANNING PROCESS
8
Chapter 1. Overview of the
7-8 goal- setting
• Goal - A desired future state that the organization
attempts to realize
• Plan - A blueprint specifying the resource allocations,

schedules, and other actions necessary for attaining
goals
• Planning – determining the organization’s goals and

the means for achieving them:
– the most fundamental management function
– the most controversial management
function
15/03/2023 9
Chapter
Overview of Goals and Plans
7-8
• There are different levels of planning and

goals in an organization
• Goals at each level of the organization
guide the organization
10
Chapter Levels of Goals/Plans
7-8 and their Importance
11
Chapter Characteristics of
7-8 Goals and Plans
✓ Legitimacy
✓ Source of motivation and commitment
✓ Resource allocation
✓ Guides to action
✓ Rationale for decisions
✓ Standards of performance
12
Chapter
The Organizational Planning Process
7-8
13
Chapter 2. Goal- setting in
7-8 Organizations
✓ Organizational Mission
✓ Goals and Plans
✓ Strategy maps
15/03/2023 14
Chapter
Organizational Mission
7-8
• The Mission is the reason the organization
exists
– Top of the goal hierarchy
– Describes the values, aspirations and reason
for being
– A well-defined mission is the basis for all
other goals
15
Chapter
Organizational Mission
7-8
• Mission Statement
– Broadly states the basic business scope and
operations that distinguishes it from similar
types of organizations
– May include the market and customers
– Some may describe company values, product
quality, attitudes toward employees
• Mission statements outline the stated
purpose and values to stakeholders
16
Chapter
Level 2 Strategic Goals and Plans
7-8 by Senior Management
Strategic Goals
– Where the organization wants to be in the
future
– Pertain to the organization as a whole
Strategic Plans
– Action Steps used to attain strategic goals
– Blueprint that defines the organizational
activities and resource allocations
– Tends to be long term
15/03/2023 17
Chapter Tactical Goals and Plans
by Middle Management
7-8
Level 3
●Tactical Goals
- To Define the outcomes that major
divisions and departments must
achieve
●Tactical Plans
-To help execute major strategic plans
-Shorter time frame than strategic plans
15/03/2023 18
Chapter Operational Goals and
Level 3
7-8 Plans
by Lower Management
• Operational Goals
- Specific, measurable results
- Expected from departments, work groups, and
individuals
• Operational Plans
- To specify action steps toward achieving
operational goals
- Tool for daily and weekly operations
- Schedules are an important component
15/03/2023 19
Chapter
Types of Goals and Plans
7-8
• Strategic Goals – official goals, broad statements
about the organization
– Define the action steps the company intends to attain
– The blueprint that defines activities
• Tactical Goals – help execute major strategic plans
– Specific part of the company’s strategy
– Plans of the divisions and departments
• Operational Goals – results expected from
departments, work groups, and individuals
– Lower levels of the organization
– Specific action steps 20
Chapter Goal Alignment with
7-8 strategy map
- Strategy map: a visual representation of the key drivers of an organization’s
success, showing the cause-and-effect relationship among goals and plans
15/03/2023 21
Chapter Aligning Goals
7-8 with Strategy Maps
• Goals should be consistent and mutually
supportive
• The achievement of goals at low levels

permits the attainment of high-level goals
• Individuals, teams, and departments

should be working in concert
22
Chapter Goal Alignment with
7-8 strategy map
- Means-end Chain
• Achievement of goals at lower levels permits the
attainment of high-level goals
• Traditional organizational responsibility
– Strategic = top management
– Tactical = middle management
– Operational = 1st line management & workers
15/03/2023 23
Chapter Strategy Map for
7-8 Aligning Goals
Goals
should be
consistent
and
mutually
supportive
24
Chapter
7-8 3. Operational planning
✓ Criteria for effective goals

✓ Management by objectives
✓ Single-use and Standing
plans
15/03/2023 25
Chapter
Operational Planning
7-8
• Operational goals should direct employees
and resources toward outcomes
• It is important to establish effective goals

– Management by objective
– Single-use plans
– Standing plans
26
Chapter Characteristics of
7-8 Effective Goal Setting
27
Chapter
Management by Objective
7-8
Defined by management scholar

Peter Drucker in his 1954 book,
The Practice of Management
Process of defining goals and

monitoring progress
28
Chapter
Model of the MBO Process
7-8
29
Chapter
MBO Benefits and Problems
7-8
30
Chapter
Standing Plans
7-8
● A policy is a general guide to action
and provides direction for people
within the organization
● Rules describe how a specific action
is to be performed
● Procedures define a precise series of
steps to be used in achieving a
specific job
15/03/2023 31
Chapter Single-Use and
7-8 Standing Plans
32
Chapter 5. Planning in a
7-8 turbulent environment
✓Contingency plan
✓Building scenarios
✓Crisis planning
15/03/2023 33
Chapter Planning for a Turbulent
7-8 Environment
• Contingency Planning – plans for
emergencies, setbacks or unexpected
conditions
• Building Scenarios – visualizing future

possibilities
• Crisis Planning – preparing to cope with

unexpected events
34
Chapter Contingency Plans
Specific Situations - unexpected conditions
7-8
• Identify Uncontrollable Factors
– Economic turndowns
– Declining markets
– Increases in costs of supplies
– Technological developments
– Safety accidents
• Minimize Impact of Uncontrollable Factors
– Forecast a range of alternative
responses to most-likely high-impact
15/03/2023contingencies 35
Chapter
Building Scenarios
7-8
• Looking at trends and discontinuities and
• imagining possible alternative futures to
build a framework within which unexpected
future events can be managed
• Manager think about what could be
Forces managers to rehearse mentally what they would do

if their best-laid plans were to collapse
15/03/2023 36
Chapter
Crisis Management Planning
7-8 Sudden - Devastating –Require Immediate Response
• Prevention
– Build trusting relationship with key
stakeholders
– Open communication
• Preparation
– Crisis Management Team
– Crisis Management Plan
– Establish an Effective Communications
system
15/03/2023 37
Chapter Essential Stages of
7-8 Crisis Planning
38
Chapter 6. Innovative
7-8 approaches to planning
➢Set Stretch goals for excellence
➢To achieve Six Sigma quality
➢Use performance dashboards
➢To oversee plans and measure progress
toward goals
➢Deploy intelligence teams
➢Cross-functional group of people who work
together to gain a deep understanding of a
specific competitive issue and offer insight and
39
15/03/2023 recommendations for planning
Chapter Planning for High
7-8 Performance
Traditional Approach: High-Performance
• Done by top Approach:
executives (top down) • Decentralized planning
• Central planning • Managers plan
departments throughout the
• Planning specialist organization
• Now involves line-
Stretch Goals and Big managers and
Hairy Audacious employees
Goals (BHAG) are big • Dynamic plans for fast-
and inspiring changing needs
40
Chapter Performance Dashboard
7-8 for Planning
• Gauge progress
toward goals
• Align and track

goals
• All employees can

track progress
41
Strategy Formulation and
Implementation
CHAPTER 8
Chapter
Learning Objectives
7-8
• Define the components of strategic
management.
• Describe the strategic planning process
and SWOT analysis.
• Understand grand strategies for domestic
and international operations.
• Define corporate-level strategies and
explain the portfolio approach.
15/03/2023 43
Chapter
I. Manager’s Challenge
Learning Plan
7-8
Thinking Strategically
II.
A. What Is Strategic Management?
B. Grand Strategy: Growth (internal growth vs Diversification), Stability (pause strategy),
Retrenchment (liquidation, divestiture)
C. Purpose of Strategy
D. Levels of Strategy
III. The Strategic Management Process
A. Strategy Formulation Versus Implementation
B. Situation Analysis
IV. Formulating Corporate-Level Strategy
A. Portfolio Strategy
B. The BCG Matrix
C. Diversification strategy
V. Formulating Business-Level Strategy
A. Porter’s Competitive Forces and Strategies
VI. Formulating Functional-Level Strategy
VII.New trends in Strategy
VIII.Global Strategy
IX. Strategy Execution
44
II. Thinking strategically
Chapter
Strategic Management
7-8
• Set of decisions and actions used to implement
strategies that will provide a competitively superior
fit between the organization and its environment so
as to achieve organizational goals
• To think strategically means to take long term view

and see the big picture
• Responsibility = top managers and chief executive
15/03/2023 46
Chapter
Strategic Management
7-8
Managers ask such questions as...
What changes and trends are occurring?
Who are our customers?
What products or services should we
offer?
How can we offer these products or
services most efficiently?
15/03/2023 47
Chapter
Grand Strategy
7-8
• General plan of major action to achieve
long-term goals
• Falls into three general categories
1. Growth
2. Stability
3. Retrenchment
A separate grand strategy can be defined for global operations
15/03/2023 48
Chapter
Grand Strategy: Growth
7-8
• Growth can be promoted internally by
investing in expansion or externally by
acquiring additional business divisions
- Internal growth = can include development
of new or changed products
- External growth = typically involves
diversification – businesses related to
current product lines or into new areas
15/03/2023 49
Chapter Grand Strategy:
7-8 Stability
• Stability, sometimes called a pause
strategy, means that the organization
wants
– to remain the same size or
– to grow slowly and in a controlled fashion
15/03/2023 50
Chapter Grand Strategy:
7-8 Retrenchment
• Retrenchment = the organization goes
through a period of forced decline by either
shrinking current business units or selling off or
liquidating entire businesses
– Liquidation = selling off a business nit for the cash

value of the assets, thus terminating its existence
– Divestiture = involves selling off of businesses that

no longer seem central to the corporation
15/03/2023 51
Purpose of Strategy
• Strategy is the plan of action that prescribes resource
allocation and other activities for dealing with the
environment, achieving a competitive advantage, that
help the organization attain its goals
Strategies focus on:

●Core competencies: something the organization does
especially well in comparison to its competitors ( so to create
competitive advantage)
●Developing synergy: joint effect greater than the sum
of its parts acting alone
●Creating value for customers: value as
combination of benefits received and costs paid
52
Chapter Three Levels of Strategy in
7-8 Organizations
15/03/2023 53
III. The strategic management
process
Strategic Management Process
Chapter
7-8 Current Mission
Goals, Strategies
External Environment Internal Environment

National, Global Core Competence,
Synergy, Value Creation
SWOT
Strategic Factors Strategic Factors
Opportunities & Threats Strengths, Weaknesses
New Mission
Goals, Grand Strategy
Formulation of Strategy
Corporate, Business, Functional
Implementation of Strategy
via Changes in: Leadership culture, Structure, HR,
15/03/2023 Information & control systems 55
Chapter Strategy Formulation vs.
7-8 Implementation
• Strategy Formulation = stage of strategic
management that involves planning and
decision making that lead to the establishment
of the organization’s goals and of a specific
strategic plan
• Strategy Implementation = stage of strategic

management that involves the use of managerial
and organizational tools to direct resources
toward achieving strategic outcomes
15/03/2023 56
Chapter
Situation analysis
7-8
• Situation analysis:
• includes a search for SWOT that
affect organizational performance
15/03/2023 57
Chapter
Checklist for Analyzing Organizational Strengths
7-8 and Weaknesses
Exhibit 8.4
15/03/2023 58
IV. Formulating corporate-level strategy
- Portfolio strategy
- BCG matrix
- Diversification strategy
Chapter Portfolio Strategy
7-8
• Portfolio Strategy: Mix of BCG Matrix
business units and
product lines that fit
together in a logical way
to provide synergy and
competitive advantage
• SBU: unique business
mission, product line,
competitors, and
markets relative to other
SBUs in the corporation
15/03/2023 60
Chapter Diversification strategy
7-8
• Diversification the strategy of moving into new lines of
business
• Related diversification: the new business is related to the
company’s existing business activities
• Unrelated diversification: an organization expands into a
totally new line of business
• Vertical intergration: company expands into businesses
that either produce the supplies needed to make products
and services or that distribute and sell those products and
services to customers
15/03/2023 61
V. Formulating business-level strategy
- Porter’s competitive forces & strategies
- Partnership strategies
Strategic Management Process
Chapter
7-8 Current Mission
Goals, Strategies
External Environment Internal Environment

National, Global Core Competence,
Synergy, Value Creation
SWOT
Strategic Factors Strategic Factors
Opportunities & Threats Strengths, Weaknesses
New Mission
Goals, Grand Strategy
Formulation of Strategy
Corporate, Business, Functional
Implementation of Strategy
via Changes in: Leadership culture, Structure, HR,
Information & control systems 63
15/03/2023 Copyright ©2010 by South-Western, a division of Cengage 63
Chapter Five Forces Affecting Industry
Competition
7-8 Exhibit 8.6
•Internet reduces Potential New

barriers to entry Entrants
Internet blurs differences among

competitors in an industry
Threat of Substitute Rivalry Bargaining

Products among Power of
Competitors Buyers
•Internet expands market size, but •Internet shifts greater power
creates new substitution threats to end consumers
•Internet tends to increase the

bargaining power of suppliers Bargaining Power of Suppliers
64
Source: Based on Michael E. Porter, Competitive Strategy: Techniques for Analyzing Industries and Competitors (New York: Free Press, 1980).
15/03/2023
Chapter Competitive Edge Through
7-8 Competitive Strategies
• Differentiation (chiến lược khác biệt hóa sản
phẩm)= attempt to distinguish products or services
from that of competitors
• Cost leadership (chiến lược dẫn đầu về chi phí
thấp) = aggressively seeks efficient facilities,
pursues cost reductions, and uses tight cost
controls to produce products more efficiently than
competitors
• Focus (chiến lược tập trung)= concentrates on a
specific regional market or buyer group
15/03/2023 65
VI. Formulating functional-
level strategy
- actions plans adopted by major
departments to support execution of
business-level strategy to achieve
strategic goals
Chapter
7-8
VII. New trends in strategy

• Strategic flexibility
• Strategic partnership
Chapter Continuum of Partnership
7-8 Strategies
Exhibit 8.8
Organizational Combination Acquisitions
Mergers
Joint Ventures
Strategic
Alliances
Strategic Business Partnering
Preferred Supplier Arrangements
Low High
Degree of Collaboration
15/03/2023 68
Chapter
VIII. Global Strategy
7-8
• Globalization = product design and
advertising strategies are standardized
around the world
• Multi-domestic = adapt product and
promotion for each country
• Transnational = combine both
globalization and national
responsiveness
15/03/2023 69
ChapterGlobal Corporate Strategies
7-8
High Globalization
Strategy Transnational Strategy
• the world as a single global • to balance global efficiencies
market and local responsiveness
• Standardization for global • Combines standardization and
Need for Global Integration
products/advertising customization for

strategies product/advertising strategies
Export Strategy
Multi-domestic Strategy
•Domestically focused
• Handles markets independently
•Exports a few domestically for each country
produced products to selected
countries
• Adapts product/advertising to
local tastes and needs
Low
70
Low Need for©2010
Copyright National Responsiveness
by South-Western, a division of Cengage High
IX. Strategy Execution
- Implementation requires vision,

intuition, and employee participation =>
Implementation through changes
Chapter
7-8 Implementing Strategy Tools
• Leadership
• Clear roles and accountability
• Candid communication
• Appropriate human resource
practices
15/03/2023 72
Chapter Tools for Putting Strategy into
7-8 Action
Environment
Organization
Visible Leadership
✓Motivate people
✓Shape cultures and values
✓Model desired behaviors
Clear roles and accountability

Cqndid Communication ✓ Delegate authority and
Strategy ✓Open lines of communication responsibility Performance
✓Encourage debate ✓ Create teams
✓Be honest ✓ Define roles
Human resources
✓ Recruit employees
✓Manage transfers
✓Provide training
73
Source: Adapted from Jay R. Galbraith and Robert K. Kazanjian, strategy Implementation: Structure, Systems and Process, 2d ed. (St. Paul, Minn.: West, 1986), 115,
Used with permission.
Chapter
Practices (NEM 2012)
7-8
• Discussion questions: Questions 1, 2, 4
&6
• Cases for Critical Analysis:
– Nielsen Media Research (p.262)
– Edmunds Corrugated Parts and Services
(p.264)

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NEW ERA OF

Planning Leading Controlling

2. Strategy Formulation and

1. Planning and Goal Setting (CH7)

• Plan - A blueprint specifying the resource allocations,

• Planning – determining the organization’s goals and

• There are different levels of planning and

• The achievement of goals at low levels

• Individuals, teams, and departments

✓ Criteria for effective goals

• It is important to establish effective goals

Defined by management scholar

Process of defining goals and

• Building Scenarios – visualizing future

• Crisis Planning – preparing to cope with

Forces managers to rehearse mentally what they would do

• Align and track

• All employees can

• To think strategically means to take long term view

– Liquidation = selling off a business nit for the cash

– Divestiture = involves selling off of businesses that

Strategies focus on:

External Environment Internal Environment

• Strategy Implementation = stage of strategic

External Environment Internal Environment

•Internet reduces Potential New

Internet blurs differences among

Threat of Substitute Rivalry Bargaining

•Internet tends to increase the

VII. New trends in strategy

Organizational Combination Acquisitions

Preferred Supplier Arrangements

products/advertising customization for

- Implementation requires vision,

Clear roles and accountability

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