Decision Making and Planning
     Decision Making and Planning
      • Decision Making
        Decision Making
         Is the cornerstone of planning.
           Is the cornerstone of planning.
         Is the catalyst that drives the planning process.
           Is the catalyst that drives the planning process.
         Underlies every aspect of setting goals and 
           Underlies every aspect of setting goals and 
           formulating plans.
           formulating plans.
      • Planning
        Planning
         All organizations plan, but not in the same fashion.
           All organizations plan, but not in the same fashion.
         All planning occurs within an environmental context.
           All planning occurs within an environmental context.
         All goals require plans to guide in their achievement.
           All goals require plans to guide in their achievement.
         All goals are tied higher goals and plans.
           All goals are tied higher goals and plans.
     © 2010 South-Western, Cengage Learning, Inc. All rights reserved.    7–2
     Organizational Goals
     Organizational Goals
                                    Purposes of Goals
         Guidance and         Promotion of           Source of           Evaluation 
        unified direction     good planning         motivation          and control
      © 2010 South-Western, Cengage Learning, Inc. All rights reserved.                7–3
     Kinds of Goals
      Kinds of Goals
                               Setting Organizational Goals
                 By Level                    By Area                   Time Frame
            Mission statement               Operations                Long-term goals
              Strategic goals                Marketing               Intermediate goals
               Tactical goals                 Finance                Short-term goals
             Operational goals              Production                 Explicit goals
                                                                     Open-ended goals
      © 2010 South-Western, Cengage Learning, Inc. All rights reserved.                     7–4
     Responsibilities of Setting Goals
     Responsibilities of Setting Goals
      • Who Sets Goals?
         Who Sets Goals?
         All managers
            All managers
              Managerial responsibility for goal setting 
                Managerial responsibility for goal setting 
                should correspond to the manager’s level 
                should correspond to the manager’s level 
                in the organization.
                in the organization.
      • Managing Multiple Goals
         Managing Multiple Goals
         Optimizing allows managers to balance 
            Optimizing allows managers to balance 
            and reconcile inconsistent or conflicting 
            and reconcile inconsistent or conflicting 
            goals.
            goals.
              Managers can pursue one goal and exclude 
                Managers can pursue one goal and exclude 
                all others or to seek a mid-range goal.
                all others or to seek a mid-range goal.
     © 2010 South-Western, Cengage Learning, Inc. All rights reserved.          7–5
    Kinds of Organizational Plans
     Kinds of Organizational Plans
                              Strategic Plans
                           (upper management)
                               Tactical Plans
                           (middle management)
                             Operational Plans
                          (lower-level managers)
     © 2010 South-Western, Cengage Learning, Inc. All rights reserved.    7–6