Analyzing Goal Setting and Planning in Organizations: A Report

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Management and Organizations in a Global Environment
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Executive summary
Goal-setting plays a crucial role in undertaking effective planning. For an organisation,
goal setting and planning provides a foundation to success. This report involves the
discussion regarding the significance of goal-setting in planning along with the study of
Miles & Vergen’s landmark. Following this, the report throws light on the concept of
management by objectives as well as different types of plans available to an
organisation. This report also includes a brief discussion about the contingency factors
that influence the approach significantly to planning by a manager.
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Table of Contents
Introduction...................................................................................................................... 4
Outline the importance of goal setting in planning and the characteristics of clear goals.
......................................................................................................................................... 5
Discuss Miles & Vergen’s landmark study into goal setting and the three conditions they
identified to be satisfied to ensure best practice in goal setting.......................................7
Discuss Management by Objectives................................................................................9
Discuss contingency factors which influence a manager’s approach to planning..........11
Discuss different types of plans..................................................................................... 13
Conclusion..................................................................................................................... 14
References.....................................................................................................................15
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Introduction
Goal setting refers to the methodology involving the identification of what an
organisation desires or wants to attain. This methodology supports the plan for
achieving the desired outcomes or goals. Planning is the primary function of
management that involves the development of a plan or strategy for achieving pre-
determined goals and objectives. Goal-setting in preparation offers guidelines to an
organisation as to how to perform. Miles and Vergen Landmark involve three necessary
conditions for the goal-setting in planning named believable, conceivable, and
achievable goals. Management by objectives implies one of the significant approaches
a manager uses to undertake the planning. Decision-making for planning approach by
manager affects by specific contingent factors that need due consideration. A manager
is in charge of planning the organisational design along with the study of these
contingency factors. The organisational design must develop with the alignment of all
these contingency factors effectively. A manager undertakes the planning process for
the development of a plan considering the organisational need for the plan.
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Outline the importance of goal setting in planning and the characteristics of clear
goals.
Goal-setting considers as the proactive way for transforming the ideas into reality and
ultimately to productivity and success. Goal-setting is an effective and active way when
it combines with the planning task. Some organisations fail even after undertaking the
task of goal-setting effectively. One of the main reasons for their failure states as poor
planning. Planning does not ensure success, but it brings the organisation closer to the
success or desired outcomes. When an organisation realises the significance of goal-
setting, it enables the organisation to accomplish the crucial tasks or things (Lenzen et
al., 2017). Following are the critical points for explaining what goal-setting means for an
organisation.
Goals are the source of focus
Goal-setting helps in the clarification of priorities associated with an organisation when it
determines the goals and objectives. Having high potential but not focusing on the
capabilities, efficiency, and resources would be useless and waste of time, efforts, and
energy of an organisation. An organisation cannot accomplish a goal without having a
focus on the efforts and resources.
Motivational source
It is appropriate to consider that the goals help in shaping the foundation for the
motivational drive. Goals provide focus on efforts which results in the development of
high motivation (Kotlar, and De Massis, 2013). Goals drive the employees and
management to attain the goals within the prescribed timeframe. This motivation helps
in moving forward towards the success of an organisation.
Goals are the measurement for progress
Goals derive the benchmarks using which an organisation can measure its progress.
The actual outcomes compare with the planned goals that further helps in identifying the
improvement areas. This comparison also involves adjustment of goals as per the
current conditions and requirements. However, the manager must be aware of the fact
that the measurement of success can undertake effectively when the goals developed
using the SMART criteria. The goals require being specific, measurable, attainable,
relevant, and time-bound.
Goals encourage teamwork
There are mainly two types of goals in an organisation named organisational goals for
everyone as a whole and personal goals for every employee. Attainment of common
goals brings different employees together to making collective efforts (Zellweger et al.,
2013). In this way, goals help in promoting teamwork culture within an organisation
which further results in a positive working environment and enhanced productivity.
Promotion of teamwork through goals drives rapidly when the team performance gets
rewarded.
Characteristics of Well-defined goals
Mere goal-setting is not sufficient for achieving successful planning. The goals must be
well-defined and be able to measure the success of short-term, mid-term and long-term
as well. Successful goal-setting and planning framework involves well-defined goals
(Hajer et al., 2015). A well-defined goal constitutes with specific characteristics. These
characteristics are collectively known as the SMART framework. The SMART
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framework defines the goals to be specific, measurable, achievable, relevant, and time-
oriented.
Specific
A goal is useful when it involves some particular action. An organisation requires
specificity in the goal-setting for placing focus on the task that enables the organisation
moving forward and in the right direction. These specific actions in a goal transform into
an action plan that ensures that the actions are directing rightly.
Measurable
Measurable criteria imply that a goal must have a measuring scale associated with it.
The goal should develop in a way that it can be measurable. It means that a goal must
have the ability to measure the success or progress with the help of accessible numbers
possessing a direct indication. Such measurable criteria should also be meaningful for
the goal and the organisation.
Attainable
Attainable is what every organisation must consider while developing goals. The goal
must have the ability to get achieved (Yourcoach.be, 2019). The goals must not involve
any such action or element that is impossible or cannot attain. It would be a waste of
time, efforts, and energy when the organisation drives towards the attainment of an
impossible task.
Relevant
It is necessary for an organisation to have goals that are relevant to the jobs, vision, and
mission. Irrelevancy in goal-setting does not motivate the employees or the organisation
since that would not be fruitful for them even after the attainment of that goal. The
personal goal of an employee requires alignment with the respective job description and
organisational vision and mission.
Time-oriented
Every goal must have a timeline for achievement. The organisation requires knowing
about the time when the goal would evaluate. Absence of deadline in goal-setting leads
to the impossibility of the goal accomplishment (Corporatefinanceinstitute.com, 2019).
Moreover, an organisation can also set timelines for different milestones in a goal to
make sure that the efforts are making in the right direction.
Discuss Miles & Vergen’s landmark study into goal setting and the three
conditions they identified to be satisfied to ensure best practice in goal setting.
The study of Miles and Vergen framework provides a deep understanding of how the
aims improve by an individual or an organisation through the development of goals that
are motivation-oriented towards either the transformation of the current strategies or
enhancement of the individual or teamwork efforts. As per this framework, the values
integrate into the goal-setting process. Some goals help in improving performance, and
these goals require being realistic, specific, learning-oriented, accepted, determined by
people, able for performance evaluation, and connected with the rewards and
feedbacks. The main aim of this framework study implies yielding the much-expected or
desired results effectively. This framework states that the goals should develop based
on three necessary conditions named conceivable, achievable, and believable.
First condition: Conceivable
As per this condition, the goal must be conceivable as they should develop considering
high objectives of the attainment of better and new achievement levels. This high
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objective should involve small goals that can achieve timely. This condition implies that
the goal should not include beyond capabilities, too low or too challenging to achieve, or
similar to past achievements (Carroll, Ng, and Birch, 2013). Such goals would reduce
the motivation level of employees, promote dishonesty, and adversely affect the
performance. Therefore, a goal is useful when it is realistic, challenging, and
achievable. High goals play a significant role in motivation and become effective when it
accomplishes.
Second Condition: Achievable
This condition implies that a goal requires acceptance as achievable. Agreement to the
goal refers as the initial step in the goal development process. Goal commitment is the
acceptance of the goal to be achievable, and it survives on crucial factors named self-
efficacy and significance. Goal failures can avoid when an organisation believes that the
goal is attainable. The higher performance level of a goal can attain when the
organisation itself develops the goals due to the possession of the controlling rights over
the process of goal-setting (Afidegnon, 2019). An effective goal is clearly defined for
improving the motivation level of employees.
Third condition: Believable
According to this framework, the third condition states as the goal to be believable. To
be believable, a goal requires being measurable as well as specific. These are the
external factors including the space as well as time for measuring and evaluating the
progress of goal achievement. The goal requires being able to answer- When, What,
Where, Who, and Why. A short goal should allocate a short time and also an accurate
goal leads to the enhancement in the motivation and performance of the employees
(Soliman, 2018). Performance motivation attains when a goal possesses the quality of
understandable, preciseness and convincing. Relevance and motivation need for the
goal achievement apart from specificity.
Discuss Management by Objectives.
Management by Objectives
The founder of this theory was Peter Drucker who developed this theory in the year
1954. Management by Objectives refers to a strategic management tool used for
performance improvement with the approach of a clear definition of objectives. These
objectives require being agreed and accepted by the employees as well as the
organisation. This theory implies that the participation opportunity to the employees in
the goal-setting and planning for the goals achievement plan increases the commitment
and participation level of employees. Application of this theory involves the comparison
between the actual outcomes and performance based on pre-determined objectives.
When this theory applies, the employees are very well aware of their respective roles
and responsibilities (Gotteiner, 2016). Moreover, it assists the employees in defining the
future course of action within the organisation. MBO motivates the employees for giving
their efforts and performance for attaining the targets within the specified timeline.
Main principles of Management by Objectives
 Organisation objective setting
 Subordinates’ objectives setting
 Alignment of goals and resources
 Recycling objectives
 Periodical review of employee performance along with an appraisal
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Process of applying Management by Objectives
 Determination of the organisational goals and objectives
 Determination of individual goals and objectives (Synnott, 2017)
 Monitoring employee performance and progress continuously
 Evaluation of the employee performance by the managers
 Providing feedback periodically on the employee performance
 Performance appraisals
Significance of Management by Objectives
 Clear definition of roles & responsibilities and participation in the goal-setting and
planning process makes it clear to the employees as to what the organisation is
expecting from them.
 With this theory, an organisation can develop a positive working environment by
maintaining an adequate level of communication among the employees. Effective
communication helps in eliminating the chances of conflicts, misunderstandings,
and confusions.
 MBO process helps mostly in boosting the morale of the employees and their
commitment level as well (Islami, Mulolli, and Mustafa, 2018). The employees
provide with the opportunity to participate in the process of goal-setting and the
development of action plans. The high commitment level of employees assists
the organisation in developing new and innovative ideas during the development
process of organisational objectives.
 Separate key responsibility areas develop for every employee based on his
educational background, qualifications, interest, and capabilities. It helps in
achieving higher productivity and performance from the employees. Moreover,
chances of job misalignment and confusions eliminate from the adoption of the
MBO process.
 Employees gain satisfaction when they are aware of their duties, roles, and
responsibilities. MBO process also promotes motivation and commitment of the
employees which enhances employee satisfaction. The more satisfaction the
employee gains, the more the chances of retention within an organisation. It
means that the MBO process indirectly helps in reducing the employee turnover
rate (FĂRCAȘ, and VUȚĂ, 2015).
Limitations of Management by Objectives
 It requires absolute support from the top management for the successful
application of this theory.
 It provides a significant focus on short-term goals which makes it difficult for an
organisation to undertake long-term planning.
 It demands cooperation for the successful application and absence of this
cooperation rises when inter-dependency of goals realises among these
departments. It makes difficult the attainment of team goals.
 It ignores the working conditions of employees by focusing entirely on the targets
and objectives for every employee.
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Discuss contingency factors which influence a manager’s approach to planning.
Development of organisational design depends on specific contingent factors that can
be external or internal. Some critical organisational design principles comprise
motivation of accountability and focus on maximisation of the staff skills and capabilities.
Organisational structure refers to the methodology of determining and the integration of
a business structure. This design constitutes the resource allocation, developing a chain
of command, and identifying organisational components. It is the responsibility of the
managers to develop appropriate organisational design considering the critical factors
named organisational size, environment, strategy, organisational age, and technology.
Size of an organisation
The complication in the organisational structure enhances with the increase in the
organisational size. The formal organisational structure follows mainly in large-sized
organisations (Yen, and Tian, 2012). The structure of large organizations differs from
that of the small organizations in the context of rules & regulations, labor division, and
procedures for budgeting. Small business successfully runs on simple structure where
no formal structure follows. Moreover, the involvement of top management also
depends on the organizational size.
Environment
An organization operates in an environment which is highly flexible, dynamic, and
uncertain. Therefore, the decision-making of an organisation influences mainly from the
external and internal environmental factors. Organizations require adaptability skills and
coordination for surviving the flexible and unstable environment. Effective functioning of
an organization directly impacts from the environmental stability as well as predictability.
An organization receives inputs from the environment and gives back in the form of
output (Tran, and Tian, 2013). This fact makes it necessary for the managers to
understand the external environment for identifying the impact of certain factors such as
resources, uncertainty, and competition level.
Strategy
Objectives and goals achieve by developing organisational structures, and these
structures develop adopting different strategies. Strategy and organisational structure
share a healthy relationship that when strategy changes, change in organisational
structure requires undertaking. The strategies improve and adapt using the corporate
mission, capabilities, and resources as well. The approach builds for achieving the
vision, and the organisational structure requires development in a way that can assist
with this strategic aim.
Technology
The technological environment influences positively on the organisational structure by
improving organisational performance. Technology mainly utilises by the organisations
for transforming the inputs into outputs such as machinery, materials, and knowledge
and so on (Burton, and Obel, 2018). Technology assists in performance improvement
by enhancing the effectiveness and efficiency of communication as well as the flow of
resource. The crucial technological contingencies named analyzability and variety of
work activities influence the organisational structure the most. Virtual organisations are
the recent trends in the organisational structure using technology where different
organisations connect through the internet.
Age of the organisation
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The evolution of an organisation encompasses different stages that initiate from birth,
youth, midlife, and conclude at the maturity stage. With evolution, an organisation
adopts standardised procedures, regulations, and systems. The organisation is informal
at the birth stage without the existence of rules and regulations. The organisation grows
in youth stage by hiring a greater number of employees and developing rules and
regulations. In the midlife stage, the organisation enlarges with the extensive rules and
regulations, hiring of professionals, and decentralised decision-making. In the maturity
phase, the organisation successfully puts the budgets, labour, resources, control
systems, and rules and regulations in their respective suitable place.
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Discuss different types of plans.
Planning is the principal function of the management that provides a foundation for
other management functions. Planning is a pervasive function that requires conducting
at all the management levels whether top, middle, or lower. There are different types of
plan available to the managers depending on the management level. The plans of top
management differ widely from that of the lower level management. Planning is crucial
for an organisation since it involves the control of the resources available and priorities
effectively. The plan connects with management and leadership where improvement in
planning results in the enhancement of the administration and management as well.
There are mainly three types of organisational plan such as strategic, operational, and
tactical plans. These plans interconnect in a way that their connectivity helps in driving
the organisational efforts and resources towards the attainment of the organisational
goals and objectives.
Strategic Plans
Strategic plans developed by the top management of an organisation. Strategic plans
comprise of mission, values, and vision implying the long-term thinking of an
organisation. This plan provides an overview of the whole organisation in a broader
context. The main aspects of a strategic plan comprise the strengthening the
operations, ensuring the efforts towards common goals, and determining priorities and
others. A strategic plan helps in determining the vision of an organisation, required
actions, and ensuring whether the organisation is attaining the success (Misni, and Lee,
2017). Strategic planning assists the organisation in determining where it stands in the
business environment and where it wants to hold. The crucial elements of the strategic
plan integrate mission statement, values, vision statement, long-term goals, action
plans, and SWOT analysis and so on.
Tactical plans
Tactical plans develop for the attainment of short-term goals, and the timeline for these
plans generally range from one to three years or less. The tactical plan creates for
driving the efforts towards the achievement of strategic goals. Middle management is
responsible for the development of tactical scenarios. Tactical plans concern with the
present situation and are usually more comprehensive than the future-oriented strategic
plan. In simple terms, tactical plans are the breakdown of the long-term strategic plans
into short-term goals (Majukwa, and Haddud, 2016). After this, the suitable course of
actions establishes for attaining the objectives of strategic plans.
Operational plans
An operational plan refers to the detailed plan depicting a clear overview of the teams,
departments, and sections of an organisation. The operational plan develops by lower
level management in which day-to-day activities required for running the organisation
are planned (Churchill, 2014). The goal of the operational plan outlines as the
department-focused. Small companies need a single operational plan while large
companies operate based on multiple plans for operations. Operational plans develop
with the central aim of supporting the achievement of the tactical plan.
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Conclusion
Goal-setting and planning framework involves different types of plans, the significance
of goal-setting in those plans, and the approach to planning named management by
objectives. An organisation develops strategic, tactical, and operational plans for
gaining success and performance improvement. Management by objectives is a
practical approach to planning which involves employee participation. An organisation
should never underestimate the significance of goal-setting and planning in
organisational success.
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