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Definition of Goals and Goal-Setting

Discuss about the Management and Organizations in a Global Environment.

A goal is an observable and measurable outcome that has more than one objective to be attained within a more or less specified timeframe (Barrett 2007, p.9). Goal-setting, on the other hand, refers to the process of choosing what one wants to accomplish and formulating a plan that will ensure the achievement of the outcome desired. For effective goal-setting, an organization needs to do more than simply choosing what it wants to do; it has to work at attaining whatever goal it has set for itself. This means that it must come up with a plan so that its work gets the organization to where it wants to be. Overall, goals are grouped into two, that is, either long term or short term. Long term goals constitute plans made for an organization’s or a person’s future, such as lifestyle, career, retirement, and family goals (Reve2003, p.24). Short term goals refer to those that an organization or a person will attain in the near future, possibly in less than a year. These are considered to be the stepping stone on the way to attaining long term goals.

In today’s harsh business environment, all business organizations must have written goals considered to be part of their business strategy. They should also aim at having goals that are particular, achievable, timely, relevant, and measurable (Lunenburg 2011, p.27). There are various benefits associated with goal setting, for instance the fact that it provides focus, improves group cohesion, and increases employee motivation. Goal setting gives workers something to aim at in their day to day tasks. Furthermore, most business goals cannot be attained unless employees collaborate together as a whole. Incorporating workers in the process of goal setting tends to increase their buy-in for the project and the organization. It informs them that their input is worthy and significant, thus giving them a sense of ownership (Ashkenas 2007, p.106).

Goal setting allows workers to measure their progress and see how their efforts are impacting the attainment of the organizational goals. Employees can also evaluate just how far they have to go to reach the goals.  Goal setting is quite influential given that it provides a focal point and outlines dreams. It gives an organization or individual the aptitude to polish in on the specific actions needed to be done to attain everything they desire. Today’s organizations acknowledge the fact that setting goals is a vital part of choosing the business that is most appropriate. On the other hand, goals are considered to be powerful contributors to victorious business development because they force organizations and individuals to think through what they want from the business and how business growth may or may not provide that (Cherrington n.d., p.110).

Definition of Plans and Types of Plans

A plan is a must have for any given organization today. This is a written record of projected future course of action that is aimed at attaining certain goals or objectives within a given period of time (Zhang, Luo & Grandt 2009, p.3473). Through organizational planning, a company’s immediate and long term goals are identified, and strategies formulated and monitored to ensure their achievement. Planning incorporates resource allocation and staffing, and is currently considered one of the most significant duties of a management team. Different types of plans can be implemented by an organization, for instance, operational, tactical, contingency, and strategic.

Operational plans are specific outcomes projected from work groups, individuals, and departments (Hill & Jones 2007, p.90). These plans are not only measurable and precise, but a manager can use them to attain their job duties. It should be noted that operational plans are not a means to securing funds, but rather an effective step by step guide to running a business to triumphantly establish a service or product that will succeed in the marketplace. Notably, these plans tend to act as a blueprint for organizational processes which are a significant guide to top managers and other important stakeholders (Drucker n.d., p.94). The main aim of operational plans in any given organization is to outline, in detail, the organization’s function and future development projections. A structure outlining the management approach is provided, covering aspects such as staffing, marketing, financial, and other resources necessary in running a victorious business.

Operational plans are usually implemented at the start of a business and once this has been accomplished, an operational plan is an excellent instrument in the development and  management of the business. An operational plan can further be divided into two main types which are the single-use plan and standing plan (Latham & Locke 2007, p.297). The former is created to perform a course of action that cannot be repeated in future. This means that it is used once to attain special goals for the organization. On the other hand, a standing plan is created for activities that take place on a regular basis over a given period of time. It assists the organization to solve issues that frequently occur.

Today’s organizations are realizing that the level of formality and detail of operational plan greatly varies depending on the complexity and size of the task. Perhaps the most significant part of determining this type of plan of an organization is to consider the long term future of the business (Barrett 2007, p.10). That is why organizations need to consider the estimate of the project lifecycle, exit strategies, and sustainability. Lack of knowing what is involved with the establishment of operational plans means a business not operating effectively, thus negatively affecting profitability. Business management is itself fashioned around the operational plans thus without them, the organization is bound to fail. So far, operational plans have been an excellent way of ensuring that all areas of a business are being focused upon in a positive manner.

Operational Plans

Tactical plans are mostly concerned with what the lower level units within each department must do, how they must go about it, and who is responsible at each level. These are simply the means required to activate a plan and make it work. Tactical planning has become such a significant part of an organization’s strategic planning to the extent that management consulting organizations are hired to help them prepare tactical plans (Lunenburg, 2011). The secret to having a well established tactical plan is having specifically outlined actions allocated to specific workers with specific deadlines. It is important for tactical plans to concentrate on a number of key organizational goals to ensure the employees understand how their activities eventually tie into these goals. Tactical plans are usually developed by those who are concerned with getting their work done on a daily basis. They formulate these plans so as to know what to do, when they need to do it and how this will be achieved (Zhang, Luo & Grandt 2009, p.3486).

A strategic plan refers to an outline of phases formulated with the goals of the whole company in its entirety, rather than with the goals of certain departments or units (Cherrington n.d., p.112). Strategic planning starts with the company’s mission, and tends to look ahead over more than two years. It moves an organization from where it presently is to where it desires to be. Intelligent and victorious management is determined by regular pursuit of flexibility, mastery, and adaptation of transforming conditions. Effective strategic plans clarify not only where the organization is heading and actions necessary to make progress, but also how it will realize its success. To make the most of a strategic plan, an organization needs to give careful thought to the strategic objectives written down, and support the goals with logical, thoroughly studied, and quantifiable benchmarks for assessing outcomes (Yankey & Vogelsang-Coombs 2008, p.36).

Firm management requires contingency plans. These identify alternative courses of action that can be applied if and when the initial plan has proved to be inadequate due to changing circumstances. It is impossible to forecast the future or how events past a company’s control will influence its ability to continue functioning. However, organizations can prepare for occurrences past their control using contingency plans. These are considered to be a blueprint for how to address unexpected occurrences. Notably, a contingency plan safeguards resources, identifies key staff, and reduces customer hassle, while allocating particular duties in the context of the recovery (Hill & Jones 2007, p.92). A contingency plan is both organization-wide and department-specific (Drucker n.d., p.95).

Tactical Plans

There are a number of benefits associated with contingency planning. For instance, a well documented contingency plan enables workers to move quickly into recovery mode rather than waiting for guidance. It prevents panic. Instilling this form of plan means that those responsible are coerced into assessing all probable ramifications in the event of a disaster (Latham & Locke 2007, p.298). In assessing an organization’s business strategy, a contingency plan should give it the mobility required to move focus to distinct aspects of the organization and change operating plans as the needs in the market are always shifting.

Businesses, particularly small ones, can be negatively affected by all forms of transformations or occurrences, from entrance of new rivals into a market, to natural disasters. As already indicated, a contingency plan is a document outlining how a business will react to emergencies if they were to take place. Additionally, contingency planning is a process where contingency plans are created. Various factors have been observed to influence a manager’s approach to planning for instance their goals (Reve2003, p.27). The way they choose to react to different contingencies will echo their final goal for the organization. Government regulations are also another form of contingency factor that can greatly influence planning. A shift in these regulations could most likely reduce the profitability of business operations, forcing the business to move its concentration to more profitable activities.

The amount of time spent while brainstorming probable contingencies and how to address them can influence a manager’s approach to planning. This is because the manager might fail to plan for particular occurrences or opt the best way to react to contingencies (Bertolini, Duncan & Waldeck 2015, p.98). Organizations that are not well equipped to address contingencies might be slower to react to threats and opportunities, thus hindering the planning process. Notably, a manager’s level or position in the organization is another contingency factor influencing a manager’s approach to planning. Lower level managers are mostly operational planners while the upper level ones are strategic planners. The length of future loyalties can also affect planning.

Environmental contingency factors are perhaps the most commonly linked to contingency planning, and tend to affect the future of a business. It is quite evident that the business world has undergone a huge technological transformation and this has forced organizations to update their operating systems so as to maintain their competitive edge while satisfying their customers. Organizations that are yet to embrace technology have found themselves struggling to keep p with the current trend. Managers in such organizations are not able to effectively plan for contingencies and eventually fail in achieving their goals. Today, it is possible for managers to effectively plan using plans that are not only specific, but also flexible (Doran 2015, p.35).  

Strategic Plans

What most business individuals do not realize is that running a business is more like running a marathon where goals are one’s mile markers along the way. Goal setting is powerful in that it concentrates attention on attaining desirable outcomes (Cherrington n.d., p.114). Workers prefer knowing what management expects them to attain, and goals provide the needed direction. Goal setting is quite important in organizational planning in that it provides a clear direction for the company. Without target goals, leaders tend to have a difficult time communicating the meaning of a company’s activities and efficiently managing the team. Organizational goals are significant in planning as they assist both workers and managers in establishing career and job objectives. Precise organizational goals ensure consistency in goals of each unit (Yankey & Vogelsang-Coombs 2008, p.32). Furthermore, efficiency and production are optimized especially when each role is lined up with others toward the attainment of collective goals.

Goal setting in planning is also significant in that it encourages competition and enables the organization to differentiate itself from its rivals. Goals generally drive activities such as Research and Development, service, and marketing, all which have a direct impact on an organization’s positioning in the market. As most organizations today have realized, well defined goals have five main characteristics which makes them effective. These characteristics have an acronym, SMART, which stand for Specific, Measurable, Achievable, Realistic, and Time-Oriented (Hill & Jones 2007, p.93). It is possible that the whole human venture is directed toward goal setting and achievement. Without these, life becomes a set of chaotic occurrences one cannot control. SMART goals setting tends to bring organization and accountability into one’s objectives and goals.

The characteristics of goals establish confirmable paths towards particular objectives, with precise estimations of how these goals will be attained. In the business world, SMART goal setting is considered to be one of the most efficient and yet least utilized instruments for attaining organizational goals. Organizations are yet to realize that SMART goal setting establishes transparency throughout the organization (Jones 2010, p.48). Specific goals are those which aim at a given part for development while Measurable ones calculate or suggest a marker of development. Achievable goals are goals which outcomes can logically be attained with available resources. Realistic goals tend to specify who will work on the goals in an effort to achieve them, and time-oriented goals pinpoint when the outcomes can be attained.

Applying SMART goals in today’s organization is significant in assisting them to plan and reach their goals. This approach to goal setting is considered valuable for self enhancement and employee motivation especially in today’s harsh business environment where numerous distractions are present (Locke & Latham 2013, p. 75). Without goals, an organization or business cannot clarify its end vision. It is not also advisable to have a vague goal because it will be confusing to an organization or individual. Goal setting in planning allows an organization to concentrate on the attainment of specific objectives. Another significance of SMART goals is that it tends to inspire self discipline. This is because employees will be able to work on things that will lead them to the organizational goals, with ease. Implementing the characteristics of goals will let the organization go beyond its limits, and become better and stronger (Ashkenas 2007, p.108).

As already indicated, goals usually create a sense of direction that guides an organization’s choices and operations. Notably, goal setting is a significant contributor to organizational values and culture. If the goals are profit-oriented, the work culture is more focused on profit generation activities. Being able to balance gains with service goals helps an organization to establish and maintain a positive reputation as a community-minded entity (Baker 2010, p.60). Goal setting in planning assists in the reduction of redundancy of work while at the same time avoids wasteful activities that do not go along with the organization’s mission. From what has been observed in the recent past, focused objectives promote collaboration and communication among individuals within a company. Given that senior managers are at times expected to make rough decisions with respect to managing costs and generating outcomes, they also direct workers through group objectives and inspiration.

The theory of goal setting discovered that people who set particularly hard goals tend to perform better than those who set easy ones (Barrett 2007, p.11). Goals also indicate and give guidance to employees regarding what needs to be done and exactly how much effort is needed. Some of the significant characteristics that have been identified under this particular theory include the willingness to work towards achievement of organizational goals as the source of job motivation, and certain goals leading to greater output and better organizational performance. Miles and Vergen realized that goals need to be realistic and to some extent, challenging. This is because it tends to give an individual a sense of pride and victory upon achievement of the goals, setting him/her up for achievement of the next goal (Zhang, Luo & Grandt 2009, p.3500).

Engagement in goal setting makes the goals more welcoming and results in more participation. From what Miles and Vergen observed, individuals tend to perform better when they are devoted to attaining certain goals, enabling organizations to profit from implementing the goal setting theory. Goals can be more specific by attaching quantity to them or defining particular projects that must be done. They also act as an energizer in that higher goals bring about greater effort and vice versa (Drucker n.d., p.98). For an organization to successfully implement goal setting in its environment, it needs to get feedback from managers and other workers as they make an effort to fulfill goal progresses. What some organizations in today’s business world may not realize is that a single goal may at times become overpowering, particularly where a long term or complicated goal is concerned. That is why attaining such goals require a logical amount of time, including time to learn and put into practice talents that will eventually meet expectations.

Once in a while organizations or individuals take time to outline goals they desire to achieve, but in most instances they tend to fail in meeting the threshold because they set the goals in an unrealistic manner (Bertolini, Duncan & Waldeck 2015, p.100). The main issue as identified by Miles and Vergen is that most individuals or organizations do not set targets upon which they can gauge performance on their way to goal attainment. Keeping in mind that goal setting is a high priority in today’s organizations, it is also the mechanism by which a business delivers outcomes against its plans. Greater profitability, increased revenue, inspired innovation, and improved shareholder value cannot be realized without an arranged process that deconstructs strategies while spilling measurable and significant components of these strategies through the workforce (Jones 2010, p.43). 

Management experts have observed that knowing what is anticipated of organizations and employees at the workplace is quite critical to workers remaining engaged in their tasks. Notably, Miles and Vergen also identified a few conditions that need to be satisfied to ensure best practice in goal setting. Having a goal statement which establishes the basis for the whole goal setting process is one of the conditions that were identified. As already highlighted previously, this can be done through SMART goals approach (Latham & Locke 2007, p.299). Once a well established goal statement has been formulated, it is important to create some goal steps that will provide a list of the most significant things that need to be done so as to attain the set goal. The third condition is loyalty and motivation. These two factors are considered to be what makes people or organizations strive to achievement. They give the necessary desire, resolve, and push to fulfill all the other steps involved in the goal setting process.

More and more organizations are now acknowledging the fact that commitment is what sets them on a straight path to attaining their goals, creating costly negative outcomes for failure (Reve2003, p.30). Setting goals that will eventually motivate individuals is quite difficult and requires much effort and good judgment. Unfortunately, some people tend to confuse goal setting with wishful thinking, and this can be seen in departmental and organizational mission statements that are unclear. Moreover, such mission statements cannot inspire anyone to do anything in particular to help achieve them.

Management by Objectives, also referred to as MBO, is a management example aiming to improve organizational performance by plainly defining objectives that are agreed to by employees and management (Lunenburg 2011, p.22). This theory states that having a say in action plans and goal setting should guarantee better loyalty and engagement among workers, in addition to the alignment of objectives across the company. Management by Objectives was initially drawn by management expert, Peter Drucker, in 1954. A key principle of this theory is the creation of a management information system to gauge real performance and attainments against the identified objectives. Among the main advantages of MBO are that it tends to improve worker loyalty and motivation while ensuring better communication between employees and the management (Doran 2015, p.36). Drucker believed MBO was not the answer-to-all, but an instrument to be made use of. The model gives organizations a process and calls for 5 main phases to be considered and put management method into practice.

Firstly, an organization needs to either determine or modify organizational goals for the whole organization. Secondly, translation of the objectives to workers needs to be made, and this is best expressed using the SMART goals concept. Thirdly, an organization needs to stimulate the engagement of workers in setting goals. By so doing, these workers are given greater motivation since they possess greater empowerment (Cherrington n.d., p.115). In the fourth step, progress is monitored. Lastly, the same progress is assessed and rewarded accordingly. Honest feedback on what worked and what did not is usually included in this last step.

Management by Objectives is quite significant in today’s organizations as it defines duties and roles for workers, assisting them write out their future course of action in the company. It directs them to deliver their level best and attain the set goals within the specified period of time. A number of benefits and limitations are associated with MBO, for instance, given that this model is outcome-oriented and concentrates on goal setting and scheming, it pushes managers to conduct comprehensive planning (Yankey & Vogelsang-Coombs 2008, p.31). Moreover, managers are expected to create quantifiable marks and principles of performance together with precedence for these marks. The duties and power of the personnel is also clearly outlined.

Another benefit of MBO is that it makes people more aware of the organizational goals. People feel proud of being incorporated into the organizational goals, thus greatly enhancing their loyalty and attitude. This model is significant in today’s organizations as it highlights the regions in which workers need further training (Hill & Jones 2007, p.99). As a result, career development is observed. MBO improves communication between senior management and subordinates. On the other hand, one of the limitations of Management by Objectives includes the fact that it an only be triumphant if it has the total support of the senior management. Despite the fact that MBO favors both the management and employees, it may actually be resented by the subordinates. This is because they may be under constant pressure to be in good terms with the management when setting goals which may also be idealistically high.

Subordinates or the employees may believe that Management by Objectives is simply an extra of the senior administration’s plan to make them toil harder and be more committed and engaged. The model does not leave any ground for prejudiced goals (Jones 2010, p.40). Furthermore, there is much formality involved and it takes most of the manager’s time. Another limitation is that the prominence is more on short tenure goals rather than the long term ones. This makes it hard to accurately predict the variables influencing planning process due to the frequently transforming socio-economic and hi-tech setting which affect stability of organizational goals. In addition, most managers may not be sufficiently talented in interpersonal relations, something that is necessary in today’s business world.

What most organizations do not realize is that group goal attainment is much more difficult. For instance, the manufacturing department cannot manufacture a set quota if it is not generously supplied with unrefined materials and the required human resources (Latham & Locke 2007, p.300). Overall, considering the benefits and limitations of Management by Objectives, it is possible to improve the effectiveness of this particular model. Organizations need to secure senior management support and loyalty in order to succeed. Both the management and subordinates should see themselves as being players of the same team. The model should be on total values organization and the whole company, rather than being a divisional progression or performance evaluation method. Some companies tend to simply add new MBO to an old system, when it is supposed to be a huge undertaking. This model should be completely embraced as a form of managing which should be wholly synthesized with the organizational culture.

References

Ashkenas, R 2007, ‘Simplicity-minded management’, Harvard Business Review, pp. 101 – 109.

Baker, R 2010, ‘No, management is not a profession’, Harvard Business Review, pp. 52 – 60.

Barrett, D 2007, ‘Paradigm shifts for the twenty-first century management science’, Cost Management, pp. 5 – 11.

Bertolini, M, Duncan, D & Waldeck, A 2015, ‘Knowing when to reinvent’, Harvard Business Review, pp. 90 – 101.

Cherrington, DJ N.d., Organizational behavior, Allyn and Bacon, Boston.

Doran, JT 2015, ‘There’s a S.M.A.R.T. way to write management’s goals and objectives’,

Drucker, P n.d., The practice of management, Harper & Brothers, New York.         

Hill, CWL & Jones, GR 2007 Strategic management: An integrated approach, South-Western, Independence, KY.

Jones, GR 2010 Organizational theory, design, and change: text and cases, 6th Edition, Pearson, Upper Saddle River, NJ.

Latham, GP & Locke, EA 2007 ‘New developments and directions of goal-setting research,’ European Psychologist, 12(4), pp. 290 – 300.

Locke, EA & Latham, GP, eds 2013, New developments in goal setting and task performance, Routledge Academic, New York.

Lunenburg, FC 2011 ‘Goal-setting theory of motivation,’ International Journal of Management, Business, and Administration, 15(1).

Management Review, 70(11), pp. 35 – 36.

Reve, J 2003 Understanding motivation and emotion, Wiley, Hoboken, NJ.

Yankey, JA & Vogelsang-Coombs, V 2008 Strategic planning, Oxford University Press, New York.

Zhang, Z, Luo, L & Grandt, M 2009, ‘A simulation approach for evaluation and improvement of organizational planning in collaborative product development projects,’ International Journal of Production Research, 47(13), pp. 3471 – 3501.

Management by Objectives

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