VIETNAM GENERAL CONFEDERATION OF LABOUR

TON DUC THANG UNIVERSITY

FACULTY OF FACULTY OF BUSINESS ADMINISTRATION

REPORT
PLANNING: COMPARE AND CONTRAST APPROACHES TO GOAL SETTING AND
PLANNING; CONTEMPORARY ISSUES; EXAMPLES AND APPLICATIONS

Lecturer: Đan Trà

Subject: Principles of Management
Students: Đỗ Thị Minh Ngọc – B21D0012
Bùi Ngọc Thảo Vân – B21D0004
Trần Gia Khiêm – B21D0010
Nguyễn Đình Huy – 42101392

Ho Chi Minh City, 23 April 2024

 CONTENTS
I. Introduction....................................................................................................................4
1.1. Overview..................................................................................................................5
1.1.1. Definition of Goal Setting..................................................................................5
1.1.2. Types of Goals....................................................................................................5
1.1.3. Definition of Planning.......................................................................................5
1.1.4. Types of Plans....................................................................................................5
II. Comparing and contrasting approaches to goal setting and planning.....................6
III. Contemporary Issues.................................................................................................10
IV. The Application of OKR in the Google Management System...............................12
V. Conclusion....................................................................................................................14
REFERENCES.................................................................................................................15

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 GROUP MEMBERS

Name Student ID Contribution

Đỗ Thị Minh Ngọc B21D0012 100%

Bùi Ngọc Thảo Vân B21D0004 100%

Trần Gia Khiêm B21D0010 100%

Nguyễn Đình Huy 42101392 100%

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 I. Introduction
In the dynamic realm of organizational management, planning serves as the bedrock
upon which success is built, providing a roadmap to navigate the complexities of the
business landscape. At its core, planning encapsulates a multifaceted process aimed at
defining objectives, devising strategies, and orchestrating actions to achieve desired
outcomes. As organizations strive to fulfill their missions and realize their visions,
understanding the nature, purposes, and planning methodologies becomes imperative.

This report starts with a comprehensive exploration of planning, with a particular

focus on comparing and contrasting approaches to goal setting and planning within
organizational contexts. Drawing from exploring traditional and contemporary
methodologies. We delve into the diverse methodologies that organizations employ to set
objectives and optimize performance.

Central to our examination are four fundamental reasons for planning, each
illuminating a distinct facet of its significance. Planning provides direction, offering a
compass to guide organizational endeavors amidst the complexities of the competitive
landscape. By delineating clear objectives and strategies, planning reduces uncertainty,
enabling organizations to anticipate and adapt to changing circumstances effectively.
Moreover, planning minimizes waste and redundancy, optimizing resource allocation and
enhancing operational efficiency. Finally, planning sets the standards for controlling,
facilitating the measurement and evaluation of performance against predetermined
benchmarks.

Within the realm of formal planning, specific goals covering predefined periods form
the cornerstone of organizational strategy. These goals, articulated through written
documentation and shared among organizational members, provide a framework for
alignment and accountability. Formal planning is intrinsically linked to positive financial
outcomes, with studies indicating a correlation between the quality of planning and
implementation and improved profitability and return on assets. However, the impact of
planning on performance can be influenced by external factors, highlighting the dynamic
interplay between organizational strategies and environmental forces.
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 I.1. Overview
I.1.1. Definition of Goal setting
Goal setting is the process of defining specific, measurable, achievable, relevant, and
time-bound objectives that an individual or organization aims to achieve. It involves
identifying the desired outcomes and developing a plan for achieving them.

I.1.2. Types of Goals

 Financial Goals – related to the expected internal financial performance of the
organization.
 Strategic Goals – related to the performance of the firm relative to factors in its
external environment (e.g., competitors).
 Stated Goals – official statements of what an organization says, and what it wants
its various stakeholders to believe its goals are.
 Real goals – goals that an organization pursues, as defined by the actions of its
members.
I.1.3. Definition of Planning
Planning is defining the organization’s goals, establishing strategies for achieving those
goals, and developing plans to integrate and coordinate work activities.

I.1.4. Types of Plans

 Strategic plans – plans that apply to the entire organization and establish the
organization’s overall goals.
 Operational plans – plans that encompass a particular operational area of the
organization.
 Long-term plans – plans with a time frame beyond three years.
 Short-term plans – plans covering one year or less.
 Specific plans – plans that are clearly defined and leave no room for interpretation.
 Directional plans – plans that are flexible and set out general guidelines.
 Single-use plan – a one-time plan specifically designed to meet the needs of a
unique situation.
 Standing plans – ongoing plans that provide guidance for activities performed
repeatedly.

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 II. Comparing and contrasting approaches to goal setting and planning
Traditional Approach:

Aspect Traditional Approach

Structure Hierarchical, top-down

Planning Detailed, step-by-step plans

Execution Sequential, linear

Timelines Rigid, strict deadlines

Control Centralized

Documentation Extensive

Environment Assumes stable, predictable conditions

Focus Predictability and control

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 Strengths Structure, clear roles, and responsibilities

Limitations Inflexible, difficult to adapt to change

 Goal setting: Focuses on specific, measurable, achievable, relevant, and time-

bound (SMART) goals.
 Planning: Involves creating detailed, step-by-step plans to achieve the goals, often
with Gantt charts, project management tools, and resource allocation.
 Top-down approach, where goals and plans are set by leadership or management.
 Emphasis on control, predictability, and following established processes.

For instance: A construction company creates a detailed project plan with timelines,
resource allocation, and risk mitigation strategies for building a new office complex. The
plan follows a sequential process from groundbreaking to final inspection.

Traditional Approach Pros and Cons in Action:

 Pros: The construction company's detailed plan provided structure, clear roles, and
responsibilities, allowing for efficient resource allocation and predictability in a
stable environment with well-defined requirements.
 Cons: However, if unexpected delays or changes occurred during construction, the
inflexible plan might have been difficult to adapt, leading to delays or additional
costs.

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Contemporary Approaches:

a) Agile Goal Setting and Planning

 Goal setting: Focuses on setting flexible, adaptable goals that can be adjusted
based on changing circumstances or learnings.
 Planning: Involves iterative, incremental planning with short sprints or cycles,
allowing for continuous improvement and course correction.
 Bottom-up approach, where teams and individuals have autonomy in setting goals
and plans.
 Emphasis on collaboration, adaptability, and responding to change.

Example: A software development team using Scrum methodology to build a new

mobile app. They set goals for each two-week sprint, continuously adapt their plans based
on feedback from stakeholders and end-users, and release new features incrementally.

b) OKR (Objectives and Key Results) Framework

 Goal setting: Set ambitious, qualitative objectives (goals) and quantitative key
results (measurable outcomes).
 Planning: Involves creating plans for achieving key results, with frequent check-ins
and adjustments.
 Combines top-down and bottom-up approaches, with leadership setting objectives
and teams setting key results and plans.
 Emphasis on alignment, transparency, and continuous feedback.

Example: A sales organization setting the objective of "Increase revenue in new

markets" for the quarter. Each sales team then defines key results like "Acquire 2 million
new clients in 3 regions" and tracks their progress through frequent check-ins and
adjustments.

c) Design Thinking Approach

 Goal setting: Focuses on understanding user needs and defining desirable
outcomes or experiences.

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  Planning: Involves iterative prototyping, testing, and refining solutions based on
user feedback.
 Emphasizes empathy, ideation, and experimentation over rigid planning.
 Suitable for innovative projects or solving complex problems.

Example: A consumer electronics company using design thinking to develop a new

product line of smart home devices. They conduct user research to understand pain points,
ideate product concepts through brainstorming sessions, and iteratively prototype and test
new designs with potential customers.

Design
Aspect Traditional Agile OKR
Thinking

Specific,
measurable, Qualitative User-focused,
achievable, Flexible, objectives and desirable
Goal Setting
relevant, time- adaptable goals quantitative outcomes or
bound key results experiences
(SMART) goals

Detailed, step- Plans to Iterative

Iterative,
by-step plans achieve key prototyping,
incremental
with Gantt results, testing, and
Planning planning in
charts and frequent refining
short sprints or
resource check-ins, and solutions based
cycles
allocation adjustments on user feedback

Emphasis on
Combines
empathy,
Approach Top-down Bottom-up top-down and
ideation, and
bottom-up
experimentation

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 Alignment
Decision- Autonomous between User feedback
Centralized
Making teams leadership and drives decisions
teams

Control, Collaboration, Alignment, Understanding

predictability, adaptability, transparency, user needs,
Emphasis
following responding to continuous solving complex
processes change feedback problems

Suited for
Assumes stable, Embraces Suitable for innovative
Environment predictable change and dynamic projects or
conditions uncertainty environments complex
problems

Minimal
Objectives,
documentation User research,
Extensive key results,
Documentation focused on prototypes, and
documentation and progress
working test results
tracking
products

Goal User-centric
Structure, clear Flexibility,
alignment, solutions,
Strengths roles, and responsiveness
frequent innovative
responsibilities to change
feedback thinking

Challenging
Potential for May require
Inflexible, to balance
scope creep, significant
Limitations difficult to short-term and
lack of long- resources and
adapt to change long-term
term vision time investment
goals

III. Contemporary Issues

Internal:

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  Lack of Interaction and Feedback: When there isn't enough interaction among
departments or team members, the absence of feedback can lead to
misunderstandings about goals and plans, resulting in poor performance.

 Uneven Team Composition: When team members have different levels of

knowledge, skills, and commitment, disparities in goal-setting and planning may
arise, reducing the effectiveness of the process.

 Resource Shortage: When resources such as financial, human, or time are lacking,
achieving goals and implementing plans can become challenging.

External:
 Market Fluctuations: Changes in the market, such as shifts in customer demand or
increased competition, can also impact goal-setting and planning.

 Policy and Regulation Changes: Changes in policies or regulations from regulatory

bodies or the government may require adjustments or revisions to the original plan.

 Uncertainty and Risk: The business environment is inherently uncertain and risky.
Unexpected events such as natural disasters, terrorism, or economic crises can
cause unforeseen fluctuations, affecting the achievement of goals and the
implementation of plans.

Example:
Connection: Lack of Internal Interaction and Market Turbulence
 Scenario: An automobile manufacturing company is planning to introduce a new
electric car model. However, due to the lack of effective interaction and
communication between departments, information about customer requirements
and feedback from the research and development team is not accurately and timely
conveyed.

Impact:
a) Lack of Internal Interaction Affects Product Plans:

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  Result: The initial product plan does not accurately reflect the market's needs and
desires.

 Consequence: The new electric car might fail to meet customer expectations,
leading to market failure.

b) Market Turbulence Adds Pressure to Lack of Internal Interaction:

 Result: Market turbulence in the electric car industry, such as rapid technological
advancements and intense competition, requires a quick and flexible response from
the company.

 Consequence: The lack of internal interaction and communication increases

pressure and reduces the company's ability to respond to the market.

Interaction and Influence:

 Inadequate Interaction Increases Risk and Pressure: Insufficient interaction and
communication within the company increase the risk and pressure during the
planning and execution of the project.
 Market Turbulence Creates the Need for Flexible Interaction: Market turbulence
creates a need for a flexible and adaptive interaction process within the company to
swiftly address external changes and challenges.

IV. The Application of OKR in the Google management system

1999: John Doerr introduced the goal and performance management method
Objectives and Key Results (OKR) to Google - the company was not yet one year old and
had just 40 employees.

Today: Google belongs to its parent company Alphabet, employs almost 140,000
people (as of 2021), and still uses the OKR method.

How Google successfully uses OKR for management control

Ambitious goals promote intrinsic motivation

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 Google's OKR philosophy emphasizes the importance of setting inspiring and
ambitious Objectives to drive employees beyond their comfort zones. Achieving goals
100 percent of the time isn't the aim; instead, it's about fostering independent teams
committed to the Objective and capable of self-motivation. At Google, an achievement
level of 70 percent is considered outstanding, highlighting the necessity for ambitious
targets. Companies like Bosch and Metro are also adopting third-party software, like
Workpath, to develop and measure their OKRs alongside Google's simple tools.

Sharper focus through quantifiable Key Results

Compared to traditional goal management methods like MBO, OKRs operate on

shorter cycles typically spanning two to four months, aligning with quarterly objectives.
They are structured around measurable Key Results, aiming not only to define main goals
and assess individual contributions but also to enable consistent tracking of personal and
team objectives within the framework of overarching company goals. The emphasis on
quantifiable Key Results resonates with Google's data-driven approach, contributing to
the company's sustained success.

Transparency at all organizational levels

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 As one of Google’s core corporate values, transparency is also part of the foundation
on which OKRs are built. That is why each OKR is publicly visible to every employee.
This way, each individual’s contribution to the company’s success can be consistently
tracked. The aim here is not to draw attention to mistakes made within the OKRs, but
rather to make the company’s strategic issues at all organizational levels visible.

Bottom-up goal development is the key to company success

To foster engagement and contribute to both personal and organizational success,

OKRs are established at individual, team, and company levels. At Google, the CEO
initially defines each OKR, which is then cascaded downward. Teams typically generate
about 60 percent of their goals organically, aligning them with company objectives
afterward. Besides vertical alignment, this approach promotes coordinated and transparent
collaboration, enabling teams to identify synergies and address conflicts effectively at
interface points.

Mistakes when drafting OKRs: Google’s tips

Google offers five tips to avoid mistakes when crafting Objectives and Key Results and
determining strategic priorities:

1. Avoid miscommunicating stretch goals: Communicate that the aim isn't 100%
achievement of ambitious goals but rather fostering commitment and self-
motivation. When interdependent, aim for a maximum of 70% goal achievement.

2. Omit "business-as-usual" OKRs: OKRs shouldn't merely reflect routine tasks but
should spur innovation and efficiency, focusing on advancing team development
instead.

3. Maximize resource utilization: Ensure that achieving OKRs fully utilizes team
resources; underutilization may indicate a lack of motivation.

4. Focus on outcome over output: Rather than just measuring outputs like launching
a new feature, OKRs should gauge the added value created for users or customers,
emphasizing outcomes.
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 5. Avoid insufficient Key Results: Ensure that Key Results for each Objective
include all necessary metrics to determine achievement within the given time
frame, preventing delays or resource shortages.

In summary, while Google popularized OKRs, many companies now adopt this
approach. However, there's no one-size-fits-all method for implementation. Companies
may use various tools like Google Sites, Wikis, or Workpath, adjusting the time horizon
and number of Objectives and Key Results based on their unique context.

V. Conclusion
In conclusion, effective planning is vital for organizational success, providing a
roadmap through today's business complexities. Comparing traditional and modern
approaches offers insights into management evolution and the need for adaptability. Agile
methods supplement hierarchical structures, ensuring swift responses to market changes.

Balancing strategic and operational planning is crucial for sustainable growth and
competitive advantage. Contemporary challenges like uncertainty and sustainability
underscore the importance of proactive planning, leveraging data analytics and
stakeholder engagement.

Real-world examples show planning's diverse applications, from technology to

healthcare. Aligning goals with organizational missions drives innovation and efficiency.
In essence, effective planning is a strategic imperative for thriving in today's competitive
landscape, fostering adaptability and sustainable success.

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REFERENCES
https://lytuong.net/xac-dinh-moi-truong/
https://www.workpath.com/en/magazine/okr-google
702020_Principles of Management - Planning work activities - Chapter 6:
PLANNING WORK ACTIVITIES - Page 22-25
https://www.mindmesh.com/glossary/what-is-goal-setting

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