planning college

7/30/2019 Planning College

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A man in 1962 thought of opening up a running shoecompany and was able to sell 1300 pairs in the first year.

He alongwith his former track coach from the University

of Oregon, started an athletic shoe company called the

Blue Ribbon Sports, to evoke the image of a winner.

That year they sold 1,300 pairs of running shoes at the

local track meets from the trunk of a car.

In the meantime, Knight also worked as a C.P.A and an

accounting professor until 1969, when he decided to

devote himself full time to Blue Ribbon Sports.

Then in 1972, Blue Ribbon Sports became Nike, named

after the mythological Goddess of victory.


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Nike grew out of an idea Philip Knight expressed

in a graduate school paper he wrote in 1962 while he wasgetting his MBA at Stanford.

Between 1972 and 1990, Nike experienced tremendous

growth. Sales in 1972 were $2 million. By 1982 sales

reached $694 million. In 1990, sales reached $2billion.

The Nike/Jordan story began in mid 1980s, when Nike

managers felt the company slipping from its position as the

leading athletic shoe maker in the United States.

In 1984, company earnings dropped for the first time in a

decade.

In 1985, competitor Reebok even captured the market

share lead for a short period of time.


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By mid 1980s, the market experienced a general slow

down.

Nike managers realized that they had lagged behind their

competitors in responding to demands for increasingly

specialized shoe types.

Enter Jordan.

What Jordan brought to Nike was image.

After striking a deal with Nike, Jordan went on to become

one of the most celebrated sports figure of all time, both as

an athlete and as a product endorser.

The ``Air Jordan line of basketball shoes is a product

inextricably linked to a star.

Nike people concentrated their efforts on a single goal: Air

Jordan.


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Nikes director of investor relations, said, ``we pointed all

our guns in the same direction, firing all at once-the

product, the athlete, TV and print ads and point of

purchase displays.

``Every corporate marketing resource was aligned and

timed to coincide with and support the introduction of Air

Jordans.

Jordan rescued Nike from six consecutive quarters of

declining earnings.

Nike expected to sell 1,00,000 pairs of Air Jordan

basketball shoes in the first year the were introduced;actual sales reached three to four million pairs.

``Its one of the best things thats ever happened to us,

said the Nike spokesman.


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On October 6, 1993, 30 year old Michael Jordan, the

Chicago Bulls gravity defying basketball star, retired

from the National Basketball Association (NBA).

In the wake of untimely death of his father, he decided to

put an endfor the time being at least-to his professional

basketball career.

But even before Jordan stunned the sports world with his

retirement announcement, Knight and his managers were

deciding to look out for options , as they knew that as

unique as his talents are, Jordan would not play

professional basketball forever.


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One new venture was the ``Nike Town concept.

A Nike Town was part sports museum, part store, and partamusement park, and was intended to be a celebration of

Nikes ``energy and youth and vitality product image.

Nike towns featured 3-D commercials, giant tropical fish

tanks, and basketball courts.

Nike was planning to open up more of such stores after

opening up in Portland and Chicago.

``Its part of a whole program of image making said

David Manfredi, partner in Elkus/Manfredi Ltd., the

Boston based firm that had designed similar stores for

Sony also.

When the Chicago Nike town opened it attracted 5000

customers a week who spent approx. $50 each.


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To keep up with the changing marketplace, Nike managers

are already diversifying.

In 1992, Nike opened retail outlets in which apparel, shoes,and Nike paraphernalia are sold.

Nike managers attributed a $100 million increase in gross

profits in 1992 to its retail sales division.

In 1993, Nike managers expanded their marketing strategyto focus on women audiences, the presence of whom was

growing in the market.

Nike has also created in-store events, called ``Dialogue

that include, fashion shows of Nike sports apparel andfeature motivational speakers like biathlon champion Liz

Downing and marathon runner Priscilla Welsh.


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The decision to start catering to women was not taken

haphazardly.

Then womens marketing director, kate Bednarski, had to

put in a lot of efforts to make others believe that this move

would not cannibalize sales in mens market.

Once Nike was convinced that there exists a viable market,

the womens team put long hours of brainstorming, and

arrived at a series of ads featuring women as capable, and

powerful people.

Then immediate response within the company was not

very favorable. But they were able to convince themanagement that with low initial investment it was worth a

try.


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Objective is defined as a specific commitment to achieve ameasurable result within a given time frame.

Goals provide a sense of direction

Goals focus our efforts

Goals guide our plans and decisions

Goals help us evaluate our progress


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A process planners use, within time and resource

constraints, is to gather, interpret, and summarize all

information relevant to the planning issue under

consideration.

Study past and current conditions, and forecast future

trends.

Focus on internal forces and influences from the external

environment.


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Generate alternative future goals and plans to achieve

them.

Goals -targets or ends the manager wants to reach.

Plans-the actions or means to achieve goals.

Identify alternative actions, resources needed, and

potential obstacles.

Single use plan-designed to achieve goals that are

unlikely to be repeated in the future.Standing plan- designed to achieve an enduring set of

goals.

Contingency plan- actions to be taken if initial plans

fail.


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Evaluate the advantages, disadvantages, and potentialeffects of each alternative goal and plan.

Prioritize those goals.

Consider the implications of alternative plans.

Identify the priorities and trade-offs among goals and

plans.

Leads to a written set of goals and plans that areappropriate and feasible within a predicted set of

circumstances.


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Plans are useless unless they are implemented properly.

managers must understand the plan, have the necessary

resources, and be motivated to implement it.

Must continually monitor the actual performance in

relation to the goals and plans.

Develop control systems to take corrective action.


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4-16

Specificformal

planningsteps

Identifying and

diagnosing the problem

Generating alternative

solutions

Evaluating

alternatives

Making the

choice

Implementing

Evaluation

Situational

analysis

Alternative

goals and plans

Goal and

plan evaluation

Goal and

plan selection

Implementation

Monitor and

control

Generaldecision

-

m

akingstages


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Mission Statement

Strategic Plans

Operational Plans

Founder, BoD,

Top Managers

Top & Middle

Managers

Middle & First

Line Managers

This is an ideal situation. However, this may vary with

size of the organization, level of

centralization/decentralization, management philosophy

and the like.


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Defines organization for key stakeholders.

Creates an inspiring vision of what organization can be and

can do.

Outlines how the vision is to be accomplished.

Establishes key priorities.

States a common goal and fosters a sense of togetherness.

*Sony Corporation of Japan, founded after World War II, has

become a leading manufacturer of a variety of productssuch as audio, video and information technology products.


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Also one of the most recognized entertainment company.

The company emphasizes on innovation and product

development.

The company is driven by its mission which is stated in its

founding prospectus which emphasizes on open

mindedness and an environment in which engineers have a

great deal of freedom that encourages innovation andapplication of advanced technologies.

Sony emphasizes on adaptation, innovation, and risk taking

contributed to the firms success.

Guided by its mission, Sony developed great strengths indeveloping high quality products in the six business

segments: electronics, games, music, pictures, insurance,

and others.


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Sony aims for greater eco-efficiency in its businessactivities through maximizing the efficiency of non-

renewable energy and resource use and providing products

and services with greater added value.

Efforts will be on reducing harmful effects on the

environment by ensuring compliance with all applicable

environmental regulations and reducing the environmental

impact of energy and resource use on a continuous basis.


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To be a competitive value provider in internationalbusiness for Group companies and all our partners.

Become a globally networked enterprise seizing

opportunities worldwide to generate USD 25 million

annual profits by 2008.

Vivid description of vision by 2008, we would have:


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Achieved aggressive and profitable growth of our 5 core

businesses & initiated new businesses.

Consistently achieved customer delight by focusing on

value adding activities throughout our value chain.

A strong global supply base for world class goods &

services.

Institutionalized Tata Excellence Business Model and

achieved best in class status.

Become an exciting organization which attracts & retains

best talent worldwide for global competitiveness.

Become a proactive, integral & responsible member of our

environment & communities.


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Integrity

Spirit of Entrepreneurship

Agility

Passion for Excellence

Unity


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Mission captures the very essence of the organization.

Mission statement moves the strategic planning process

from the present to the future. The mission statement must ``work not only today but

for the intended life of the strategic plan.

Mission statement has both an internal and an external

dimension.


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The strategy team needs to develop a compelling vision for

the future.

A vision statement describes a picture of the preferredfuture.

The vision should project a compelling story about the

future.

A vision statement describes how the future will look if theorganization achieves its mission.


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A mission statement

concerns what an

enterprise is all about.

A vision statement is

what the enterprise

wants to become.

Strategic planning is asystematic process

whose purpose is to

map out how the

enterprise should getfrom where it is today to

the future it envisions.


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Personal mission statementencompasses life philosophy

and says who you are, what your life goals are, why you

live, and what your deepest aspirations are.

Yourpersonal vision statement is a description of where

you are going, which values and principles guide you to

reach that point., what you want to help realize in your life,what ideal characteristics you would like to have, and what

your ideal profession, living and health conditions are.


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Organizational mission encompasses the identity andthe core competence of the firm and indicates its reasons

for existence, for who it exists, why it exists, what itsprimary goal is, and who are its most importantstakeholders.

Mission of ESSO Imperial Oilthe companys missionis to create shareholder value through the development

and sale of hydrocarbon energy and related products. Organizational vision encompasses a long-term dream

of the firm and indicates the transformation pathnecessary to accomplish this. Vision is an image of the

desired future. The organizational vision is, contrary to the

organizational mission, tied to a time horizon and therelated concrete goals.


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The organizational vision is also linked to a number of

core values, in order to strengthen the one-mindedness of

the employees, and favorably influence their behavior andthe organizational culture.


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Organizational mission, vision, objectives and strategies of

Shell Oil Refinery Pernis

In 1998, Shell Pernis has taken it upon itself to be a world

class refinery: a refinery with a perfect operation that

belongs to the best in Europe and the top in the Benelux.

To achieve this, plan PERFECT 98 was launched in mid

1996 within the organization to change and attune theorganization optimally to the dynamics of the market.

The decentralization of the functional structure was

central, whereby the activities were organized as much as

possible around the primary process, which is ``theproduction of oil and chemical products for shell

companies.


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Mission

Profitable production of oil and chemical products for shell

companies all over the world.

Vision

To achieve the mission Shell Pernis wants to be a bigproducer who:

Is efficient, cheap, and as much competitive.

Worker, customer-oriented and delivers the agreed upon

quality. Acts safe and eco-conscious.


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Time Horizons

Scope

Degree of Detail


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The Balanced Scorecard (BSC) began as a concept for

measuring whether the smaller-scale operational activities

of a company are aligned with its larger-scale objectives interms of vision and strategy.

It was developed and first used at Analog Devices in 1987.

By focusing not only on financial outcomes but also on the

human issues, the Balanced Scorecard helps provide a more

comprehensive view of a business, which in turn helps

organizations act in their best long-term interests


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To use the scorecard for planning, it is necessary to:

o clarify the vision

o develop business unit scorecards

o review business unit scorecards

o communicate the scorecard to the entire

companyo conduct annual strategy reviews


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CustomerStriving to be 3rdplace Repeat business 30-40% annual expansion Brand extension

Process Brewing the perfect cup Brewing the perfect cup at home Retail skills and customer service Coffee knowledge Empowerment

Financial $1 billion company (market value) $100 million annual profits 800% stock appreciation 2000+ stores

People/LearningCommitment/trust (low turnover) Training Beanstock program Opinion surveys Flexible schedules

Vision

And

Strategy


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A companys strategy consists of the competitive moves,

internal operating approaches, and action plans devised by

management to produce successful performance.

Strategy is managements game plan for running the

business.

Managers need strategies to guide HOW theorganizations business will be conducted and HOW

performance targets will be achieved.


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Where Are We Now?

Where Do we Want toGo?

How Will We Get There?


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A strategic plan specifies

where a company is

headed and HOW

management intends to

achieve the targeted levels

of performance.


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Developing a mission and a vision Setting Objectives

Analysis of internal strengths and weaknesses and analysis

of external opportunities and threats.

Crafting a Strategy (Strategy Formulation)

Implementing and Executing Strategy (Administration)

Evaluating Performance, Reviewing the Situation and

Initiating Corrective Action (Strategic Control)


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Reflects managements vision ofwhat the organization seeks to do

and to become.

Sets forth a meaningful direction forthe organization.

Outline Who we are, What we do,

and Where we are headed.


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The purpose is to convertthe mission into Specific

Performance Targets

Serve as yardsticks fortracking company

progress and performance.

Should be set at levels thatrequire stretch and

disciplined effort.


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HOW to outcompete rivals and win acompetitive advantage.

HOW to respond to changing industry and

competitive conditions.

HOW to defend against threats to the

companys well-being.

HOW to pursue attractive opportunities.

SWOT analysis


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Elements Of Environmental Analysis

Social

analysisHuman resources

analysis

Industry and

market analysis

Environmental

Analysis

Competitor

analysis

Technological

analysis

Macroeconomic

analysisPolitical and

regulatory analysis


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Resourcesare rare

Resources

are

organized

Resources

are

inimitable

Resources

are

valuable

Core

competencies


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Marketing auditOperations

analysis

Financial

analysis

Internal

Resource

Analysis

Human resource

assessment

Other internal

resource analysis


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Process of assessing how well one companys basic

functions and skills compare to those of othercompanies.

Goal is to thoroughly understand the best practices of

other firms.

Xerox & L.L. Bean

Comparison of strengths, weaknesses, opportunities,

and threats.

Helps summarize the major facts and forecasts derivedfrom external and internal analyses

Used as the basis for identifying primary and secondary

strategic issues confronting the organization


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focuses on domainselection; where will they compete.

E,g., Visteon Corporation vis--vis Ford Growth & diversification

IBM & GE

GEs CEO Geffrey Immelt has stated

that GEs future depends on pursuingbusinesses that leverage humancapital.

Mergers & acquisitions

HP & Compaq

Strategic alliances & joint ventures

Sony Ericsson

Renault SA and Mahindra &Mahindra Ltd.


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Sony Ericsson is a joint venture established in 2001 by

the Japanese consumer electronics company Sony

Corporation and the Swedish telecommunicationscompany Ericsson to make mobile phones.

Reason was to combine Sonys consumer electronics

expertise with Ericssons technological leadership.

Renault is Frances largest car maker and Mahindra &Mahindra Ltd. Is Indias largest maker of SUVs. The

two companies have come together to make Logan

Sedan in India.


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Viewed in terms of domain navigation;how the company will compete against

rival firms in order to create value forcustomers.

Low cost strategy: compete on

productivity & efficiency

Wal-Mart, Southwest Airlines

Outsourcing

Differentiation strategy: compete onvalue addition

Fed-Ex

Sony


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translate strategic prioritiesinto functional areas of organization. In thisregard, for example, HR policies & practicesneed to achieve two types of fit: external &internal.

External Fit/Alignment

Focuses on fit between the business objectives

and & the major initiatives in HR. Internal Fit/Alignment

HR practices should be aligned with oneanother internally to establish a configurationthat is mutually reinforcing.

Job design, staffing, training, PA,compensation, all need to focus on the sameworkforce objectives.

Charles Schwab & Co.

.

.

.

.

.


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Changing market conditions Moves of competitors

New technologies and production capabilities

Evolving buyer needs and preferences

Political and regulatory factors New windows of opportunity

Fresh ideas to improve the current strategy

A crisis situation


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The managers of FedEx had transformed the company

from a small package-delivery service into the major forcein overnight delivery.

However, as competition was closing in from several sides,

they needed to decide on directions for the future.

FedEx managers didnt see FedEx only as a package-delivery service, but as part of a larger, more complex

industry, in terms of``information delivery.

But even other overnight carriers and competitors like

United Parcel Service and the U.S. Postal Service werealso worried about information carriers such as MCI,

AT&T, and other telecommunication companies.


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Therefore, it was important for company managers to

speculate on future directions of all these companies.

FedEx managers wanted to keep its image of being at theforefront of trends alive.

The company had started with overnight delivery long

before anyone realized that this service could become such

an integral part of doing business. The technology and the innovation made it possible to go

from handling 40 packages a night to 1.7 million .

Now managers needed to plan how to use these assets to

meet the information delivery needs of the future.


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Since, 1979, the processes of doing business have changed

drastically.

For important documents, businesses now think in terms ofhours instead of days.

FedEx had to be ready to meet the needs of tomorrows

businesses, and to it had to anticipate the needs today.

The postal service was obviously a threat its operationswere somewhat limited as to future directions.

Though it could challenge in terms of price and service, it

would probably continue to specialize in the same type

of product.

United parcel Services was also a direct challenger.


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Zapmail seemed a well timed innovation and a way to stay

ahead of the competition, but FedEx managers didnt

anticipate the number of businesses that would buy theirown FAX machines.

They discontinued Zapmail in 1986.

The Zapmail was just one example ofCEO Fred Smiths

responsiveness to the rapidly changing world ofinformation delivery.

To stay on top , FedEx had to become a global player,

Smith & his top managers concentrated on foreign

markets & acquisitions. However these efforts were very frustrating at many

accounts.


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Difficulties in gaining access to specific foreign delivery

routes and government restrictionsfavoring domestic

services, coupled with thehigh cost of flying smallpackages in large planes, created a spotty network of

service running at high cost.

But all this didnt faze Smith.

Smith made two key moves to demonstrate hiscommitment to global information services.

First, he acquired Tiger International, the worlds

largest cargo hauler in 1989.

This gave FedEx access to the vast network of routesTiger had won over the previous 40 years.


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These routes gave FedEx a direct competitive

advantage in such nations such as Australia, Malaysia,

and the Philippines, where landing rights wereextremely difficult to come by.

It also allowed Smith to mix in Federal Express small

parcels with Tigers larger cargo, providing a more

efficient use of space. And also, acquiring Tigers squadron of long haul aircraft

allowed FedEx to move its fleet of DC-10s back to the

higher volume parcel routes in the United States.


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Second, FedEx built a new facility in Alaska.

This location is the centre of transportation triad, putting

FedEx within seven hours of key markets in Asia,Europe and the United States.

This move caught the competitors off guard forcing them

to follow Smiths lead.

In words of one of the expert, these two moved madeFedEx the ``undisputed leader in information delivery.

Now FedEx has entered into another market: logistics

planning for global companies.

Logistics involves managing the movement and storage ofmaterials, parts, and finished goods from suppliers,

through the firm, and to the customer.


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FedEx guarantees 2 day delivery, a reduction from the

manufacturers previous 5-18 day cycles.

For instance, National Semiconductor managementrecently awarded FedEx its finished goods delivery

business from Southwest Asia to consumers worldwide.

FedEx will use its own Singapore warehouse to store

finished goods from National Semiconductor's SoutheastAsia assembly points, ship the goods, clear them through

customs, and deliver them to customers.

National Semiconductor will enter orders directly into

FedExs database and will be able to track them as they aremoved from inventory, packed, shipped, and signed for by

the customer.


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The most difficult question managers of todays complex

organizations face: what allocation of resources to

business units, product lines, R&D projects, or other

business initiatives will best balance risk diversification,

short term earnings, and long term shareholder value?

A business portfolio is the collection of strategic business

units (SBU) that make up a corporation. The optimal

business portfolio is one that fits perfectly to the

companys strengths and helps to exploit the mostattractive industries or markets.


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To analyze its current business portfolio and decide which

SBUs should receive more or less investment.

To develop growth strategies for adding new products and

business to the portfolio.

To decide which businesses or products should no longer

be retained.

The BCG (Boston Consulting Group) matrix is one of the

best known portfolio planning framework.


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The BCG Growth-Share Matrix is a portfolio planning

model developed by Bruce Henderson of the Boston

Consulting Group in the early 1970's.

It is based on the observation that a company's business

units can be classified into four categories based on

combinations of market growth and market share relativeto the largest competitor.

Business growth serves as a proxy for industry

attractiveness, and relative market share serves as a proxyfor competitive advantage.


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This framework assumes that an increase in relative market

share will result in an increase in the generation of cash.

Second assumption is that a growing market requires

investment in assets to increase capacity and therefore

results in the consumption of cash.

Henderson reasoned that the cash required by rapidly

growing business units could be obtained from the firm's

other business units that were at a more mature stage and

generating significant cash.


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Dogs have low market share and a low growth rate and

thus neither generate nor consume a large amount of cash.

Dogs are cash traps because of the money tied up in a

business that has little potential.

Such businesses are candidates for divestiture.


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Question marks are growing rapidly and thus consume

large amounts of cash, but because they have low marketshares they do not generate much cash.

The result is a large net cash consumption.

A question mark (also known as a "problem child") has the

potential to gain market share and become a star, and

eventually a cash cow when the market growth slows.


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If the question mark does not succeed in becoming the

market leader, then after perhaps years of cash

consumption it will degenerate into a dog when the marketgrowth declines.

Question marks must be analyzed carefully in order to

determine whether they are worth the investment requiredto grow market share.


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Stars generate large amounts of cash because of their

strong relative market share, but also consume largeamounts of cash because of their high growth rate;

therefore the cash in each direction approximately nets out.

If a star can maintain its large market share, it will becomea cash cow when the market growth rate declines.

The portfolio of a diversified company always should have

stars that will become the next cash cows and ensure futurecash generation.


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As leaders in a mature market, cash cows exhibit a return

on assets that is greater than the market growth rate, andthus generate more cash than they consume.

Such business units should be "milked", extracting the

profits and investing as little cash as possible.

Cash cows provide the cash required to turn question

marks into market leaders, to cover the administrative costs

of the company, to fund research and development, toservice the corporate debt, and to pay dividends to

shareholders.


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The BCG Matrix method can help understand a

frequently made strategy mistake: having a one-size-fits-

all-approach to strategy, such as a generic growth target (9

percent per year) or a generic return on capital of say 9.5%

for an entire corporation.

In such a scenario:

A. Cash Cows Business Units will beat their profit target

easily; the management has an easy job and is often

praised anyhow. Even worse, they are often allowed to

reinvest substantial cash amounts in their businesses which

are mature and not growing anymore.


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B. Dogs Business Units fight an impossible battle and,

even worse, investments are made now and then in

hopeless attempts to 'turn the business around'.

C. As a result (all) Question Marks and Stars Business

Units get mediocre size investment funds. In this way they

are unable to ever become cash cows. These inadequateinvested sums of money are a waste of money. Either these

SBUs should receive enough investment funds to enable

them to achieve a real market dominance and become a

cash cow (or star), or otherwise companies are advised to

disinvest and try to get whatever possible cash out of the

question marks that were not selected.


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High market share is not the only success factor.

Market growth is not the only indicator for attractiveness

of a market.

Low share businesses can be profitable too.

The problems of getting data on the market share and

market growth.

The model uses only two dimensions.

A high market share does not necessarily lead to

profitability at all times.


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CI is the fastest growing area of SWOT analysis.

Seeks basic information about competitors: who are they?

What are they doing? What affect will it have on us?

Michael Porter provides a framework that models an

industry as being influenced by five forces.


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(Michael Porter)

Bargaining

power of

Suppliers

Rivalrywithin an

industry

Threat of NewEntrants

Threat ofSubstitute

Products

Bargaining

Power of

Customers


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Entry of competitors

How easy or difficult is it for new entrants to start tocompete.

Number and size of firms, Industry size and trends,product/service ranges, differentiation strategy.

Threat of substitutes

How easy can a product or service be substituted,

especially cheaper. Relative price performance of substitutes, buyer

switching costs, perceived level of productdifferentiation.

Bargaining power of buyers How strong is the position of buyers

Buyer volume, buyer switching costs, buyerinformation availability, product/service importance.

Bargaining power of suppliers


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g g p f pp

How strong is the position of sellers, are there many oronly a few suppliers, is there a monopoly.

Supplier switching costs, presence of substitute inputs,cost of inputs relative to price of the product.

Rivalry among the existing players

Do rivals compete aggressively, on what dimensions dothey compete.

Number of competitors, rate of industry growth, levelof advertising expense, economies of scale,informational complexity

Rival Firms Toys R Us

Competitors: Schwarz or KB Toys.

Wal-Mart & Target Stores


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Source: McKinsey & Co.

Systems

Style

Shared

Values

Structure

Staff

Strategy

Skills


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lays out the route that the organization will take in

future.

is the framework in which activities ofthe organization members are coordinated.

S and processes consist of all the formal & informal

procedures that allow the organization to function,

including capital budgeting, training etc. doesn't refer to personality, but to the pattern of

substantive and symbolic actions undertaken by topmanagers.


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act as a guiding parameter for strategic

planning.

relate directly to the concerns of humanresource management and points out the critical role of HRin strategy implementation.

Each of the factors is equally important for execution andinteracts with all other factors.

Circumstances may dictate which of the factors will be the

driving force in the execution of any particular strategy.

The model emphasizes that, in practice, the development

of strategies poses less of a problem than their execution.


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Management by objectives (MBO) is a systematic and

organized approach that allows management to focus onachievable goals and to attain the best possible results from

available resources.

The concept of MBO was first given by Peter Drucker in

1954 in his book 'The Practice of Management'. It can be defined as a process whereby the employees and

the superiors come together to identify common goals, the

employees set their goals to be achieved, the standards to

be taken as the criteria for measurement of theirperformance and contribution and deciding the course of

action to be followed.


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It aims to increase organizational performance by aligning

goals and subordinate objectives throughout the

organization.

The heart of MBO are the objectives, which spell out the

individual actions needed to fulfill the units functional

strategy and annual objectives.


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SMART Goals

Specific

Measurable

Achievable

Realistic, and

Time bound.

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