Essentials of Planning and Managing by Objectives

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the purpose or mission often becomes fuzzy. For example, manyconglomerates have regarded their mission as synergy,* which isaccomplished through the combination of a variety of companies.Objectives or CoalsObjectives, or goals (the terms are used interchangeably in this book), arethe ends toward which activity is aimed. They represent not only the endpoint of planning but also the end toward which organizing, staffing, leading,and controlling are aimed. The nature of objectives and management byobjectives will be discussed in greater detail later in this chapter.StrategiesFor years, the military used the word strategies to mean grand plans made inlight of what it was believed an adversary might or might not do. While theterm still usually has a competitive implication, managers increasingly use itto reflect broad areas of an enterprise's operation. In this book, strategyis defined as the determination of the basic long-term objectives of anenterprise and the adoption of courses of action and allocation of resourcesnecessary to achieve these goals.PoliciesPolicies also are plans in that they are general statements or understandings that guideor channel thinking in decision making. Not all policies are "statements"; they areoften merely implied from the actions of managers. The president of a company, forexample, may strictly follow—perhaps for convenience rather than as policy—the practice of promoting from within; the practice may then be interpreted as policyand carefully followed by subordinates. In fact, one of the problems of managers is tomake sure that subordinates do not interpret as policy minor managerial decisionsthat are not intended to serve as patterns.Policies define an area within which a decision is to be made and ensure that thedecision will be consistent with, and contribute to, an objective. Policies helpdecide issues before they become problems, make it unnecessary to analyze* The concept of synergy can be expressed simply as a situation in which 2 plus 2 becomes equal to 5, orin which the whole is greater than the sum of the pans.
the same situation every time it comes up, and unify other plans, thuspermitting managers to delegate authority and still maintain control overwhat their subordinates do.There are many types of policies. Examples include policies of hiring onlyuniversity-trained engineers, encouraging employee suggestions for improvedcooperation, promoting from within, conforming strictly to a high standardof business ethics, setting competitive prices, and insisting on fixed, ratherthan cost-plus, pricing.ProceduresProcedures are plans that establish a required method of handling futureactivities. They are chronological sequences of required actions. They are guidesto action, rather than to thinking, and they detail the exact manner in whichcertain activities must be accomplished. For example. Case WesternUniversity outlines three steps for its appraisal process: (1) setting performanceobjectives, (2) performing a mid-year review of the objectives, and (3) conductinga performance discussion at the end of the period.' Procedures often cutacross departmental lines. For example, in a manufacturing company, theprocedure for handling orders may involve the sales department (for the originalorder), the finance department (for acknowledgment of receipt of funds and forcustomer credit approval), the accounting department (for recording thetransaction), the production department (for the order to produce the goods orthe authority to release them from stock), and the shipping department (fordetermination of shipping means and route). A few examples illustrate therelationship between procedures and policies. Company policy may grantemployees vacations; procedures established to implement this policy willprovide for scheduling vacations to avoid disruption of work, setting rates ofvacation pay and methods for calculating them, maintaining records to ensureeach employee of a vacation, and spelling out the means for applying for leave.
Page 1 and 2: Essentials of Planning and Managing
Page 3: .Types of PlansPlans can be classif
Page 7 and 8: ProgramsPrograms are a complex of g
Page 9 and 10: 2. Establishing ObjectivesThe secon
Page 11 and 12: 8. Quantifying Plans by BudgetingAf
Page 13 and 14: Hierarchy of objectivesAs Figure 4-
Page 15 and 16: Examples of objectives for key resu
Page 17 and 18: Multiplicity of objectivesObjective
Page 19 and 20: 113evolving Concepts in Management
Page 21 and 22: Failures of management by objective
Page 23 and 24: KEY IDEAS AND CONCEPTSFOR REVIEWPla

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