A desired future state that the organization attempts to realize.
A blueprint specifying the resource allocations, schedules, and other actions necessary for attaining goals
The act of determining the organization’s goals and the means of achieving them.
Goals and plans have become general concepts in our society. A goal is a desired future state that the organization attempts to realize. Goals are important because organizations exist for a ,purpose and goals define and state that purpose. A plan is a blueprint for goal achievement and specifies the necessary resources, allocations, schedules tasks, and other actions. Goals specify future ends; plans specify today’s means. The word planning usually incorporates both ideas; it means determining the organization’s goals and defining the means for achieving them.
Exhibit illustrates the levels of goals and plans in an organization. The planning process starts with a formal mission that defines the basic purpose of the organization especially for external audiences. The mission is the basis for the strategic (company) level of goals and plans, which in turn shapes the tactical (divisional ) level and the operational (departments) level. Top managers are typically responsible for establishing strategic goals and plans that reflect a commitment to both organizational efficiency and effectiveness as described. Tactical goals and plans are the responsibility of middle managers, such as the heads of major divisions or functional units. A division manager will formulate tactical plans that focus on the major actions the division must take to fulfill its part in the strategic plan set by top management. Operational plans identify the specific procedures or processes needed at lower levels of the organizations such as individual departments and employees. Front line managers and supervisors develop operational plans that focus on specific tasks and processes and that help to meet tactical and strategic goals. Planning at each level supports the other levels.
Levels of Goals / Plans and their Importance
Mission statements >>
External Message: Legitimacy for investors, customers, suppliers community.
Internal message: Legitimacy motivation, resources allocation. Guides rationale standards
Strategic Goals/ Plans Senior management (Organizational as whole) >>
Tactical Goals / Plans Middle Management) Major divisions functions) >>
Operational Goals / Plans / Lower Management (Departments, Individuals).
Purposes of goal and plans:
The complexity of today’s environment and uncertainty about the future overwhelm many managers and cause them to focus on operational issues and short term results rather than long term goals and plans. However planning generally positively affects a company’s performance. In addition to improving financial and operational performance developing explicit goals and plans at each level illustrated in Exhibit is important because of the external and internal messages they send. These messages go to both external and internal audiences and provide important benefits for the organization.
Legitimacy; An organization’s mission describes what the organization stands for and its reason for existence . It symbolizes legitimacy to external audiences such as investors, customers and suppliers. The mission helps them and the local community to look on the company in a favorable light and hence, accept its existence. A strong mission also has an impact on employees enabling them to become committed to the organization because they can identify with its overall purpose and reason for existence. One of the traits often cited by employees in Fortune magazine’s list of the 10 best Companies to Work For in America is a sense of purpose and meaning . For example at Medtronic, a medical products company employees are inspired by the mission to alleviate pain, restore health and extend life.
Source: New Era Management