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Management 12e by Ricky W. Griffin
CHAPTER 6
Basic Elements of Planning and Decision Making
Part Three of this book is entitled PLANNING AND DECISION MAKING. Its fundamental purpose is
to discuss the first basic management function—planning and decision making.
Part Three has four chapters. Chapter 6 introduces the basic elements of planning and decision making.
Chapter 7 focuses on strategy and strategic planning. Chapter 8 addresses the management of decision
making. Entrepreneurship is the focus of Chapter 9.
Teaching Tip: Some instructors prefer to cover Chapter 9 separately at the end of the
course. If you prefer this method, Chapter 9 is written to be covered “out of sequence.”
CHAPTER SUMMARY
Chapter 6 is the first of four devoted to the planning process. Its purpose, therefore, is to introduce the
basic elements of this management function and to build a foundation for the more detailed coverage of
the material that follows in the remaining chapters of the part.
LEARNING OBJECTIVES
After covering this chapter, students should be able to:
1. Summarize the essential functions of decision making and the planning process.
2. Discuss the purpose of organizational goals, identify different kinds of goals, discuss who sets goals,
and describe how to manage multiple goals.
3. Identify different kinds of organizational plans, note the time frames for planning, discuss who
plans, and describe contingency planning.
4. Discuss how tactical plans are developed and executed.
5. Describe the basic types of operational plans used by organizations.
6. Identify the major barriers to goal setting and planning, how organizations overcome those barriers,
and how to use goals to implement plans.
MANAGEMENT IN ACTION
Cruise Control
The opening case discusses Carnival Cruise Lines’ dismal crisis management. Three separate accidents
show the regression of Carnival’s crisis management from merely adequate to its current state of
contradicting media and customer reports and finger pointing. Crisis management experts say companies
must execute their crisis management plan fast and effectively. Carnival does neither and continues to
flub up with each new accident.
Management Update: Micky Arison was replaced as CEO by Arnold Donald in June
2013. Donald served on the company’s board for 12 years. In July of 2015, Carnival
Corporation announced they are building two ships for their Costa Cruises in Italy. Each
ship can house 6,600 passengers and plans to operate starting in 2019. Currently, the
largest Carnival ships carry 3,600 passengers.
© 2017 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 65
Chapter 6: Basic Elements of Planning and Decision Making
LECTURE OUTLINE
I. DECISION MAKING AND THE PLANNING PROCESS
Teaching Tip: Stress for students that the planning process portrayed in Figure 7.1
reflects an orderly and logical sequence of steps. In reality, of course, the actual planning
process used in any given situation will likely reflect some variation in this process.
Decision making drives planning. Decisions underlie the establishment of organizational goals, for
example, and the formulation and implementation of all plans.
In order to plan effectively, managers must understand the environmental context in which the
organization exists. They must establish a mission that includes the organization’s purpose,
premises, values, and directions. Strategic goals and plans are devised from the mission statement;
tactical goals and plans are generated from the strategic goals and plans; and operational goals and
plans are devised from the tactical goals and plans.
Cross-Reference: Note for students that we are simply introducing decision making
here. Chapter 8 covers decision making more thoroughly.
II. ORGANIZATIONAL GOALS
A. Purposes of Goals
Goals serve four important purposes.
1. Goals provide guidance and a unified direction for people in the organization.
2. Goals promote good planning.
3. Goals motivate employees.
4. Goals provide an effective mechanism for evaluation and control.
Discussion Starter: Ask students to think about their own personal goals. Then ask them
to evaluate each of those goals in terms of the purpose it serves.
B. Kinds of Goals – goals vary by level, area, and time frame.
1. There are four basic levels of goals.
An organization’s mission is a statement of its fundamental, unique purpose that sets it
apart from other firms of the same type. The mission also identifies the scope of the
business’s operations in product and market terms.
Strategic goals are set by and for the top managers of the organization who focus on
broad, general issues.
Tactical goals are set by and for middle managers and focus on how to operationalize
actions necessary to achieve the strategic goals.
Operational goals are set by and for lower-level managers who focus on shorter-term
issues associated with the tactical goals.
2. Goals are set for different areas such as finance, marketing, or human resources.
3. Goals are set across different time frames (long-term, intermediate-term, and short-term).
The length of each time frame differs by level.
C. Responsibilities for Setting Goals
All managers should be involved, but each manager generally is responsible for setting goals
that correspond to his or her level in the organization.
66 © 2017 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Teaching Tip: Figure 6.2 illustrates the kinds of organizational goals that might be set
for a regional fast-food restaurant chain.
Group Exercise: After discussing the material titled “Kinds of Goals”, have students
construct a hypothetical hierarchy of goals like those in Figure 6.2 for different kinds of
organizations such as a retailer, a manufacturer, a college or university, and so forth.
D. Managing Multiple Goals
Goals set by different areas or at different levels may conflict. Optimizing involves balancing
and reconciling possible conflicts between goals.
Discussion Starter: Ask students to identify situations in which they have had to
optimize multiple goals. A very relevant example for students is the trade-off between
socializing and studying for a test or between studying for multiple tests during finals.
III. ORGANIZATIONAL PLANNING
A. Kinds of Organizational Plans

1. Strategic plans—general plans that outline the decisions of resource allocation,
priorities, and action steps necessary to reach strategic goals, which are set by the board
of directors and top management and have an extended time frame.
Cross-Reference: Note that strategic plans are discussed in detail in Chapter 7.
2. Tactical plans—developed to implement specific parts of a strategic plan. Typically, a
tactical plan involves upper and middle managers and has a shorter time frame than the
strategic plan.
3. Operational plans—focus on carrying out the tactical plans in order to achieve
operational goals. Developed by middle and lower-level managers and have a short-term
focus.
B. Time Frames for Planning
1. Long-range plans cover many years and vary in length from organization to
organization. For our purposes, any plan that extends beyond five years is considered a
long-range plan.
2. Intermediate plans cover periods from one to five years and parallel tactical plans.
3. Short-range plans—have a time frame of one year or less and affect a manager’s day-to-
day activities.
An action plan serves to operationalize any other kind of plan.
A reaction plan is a plan designed to allow the company to react to an unforeseen
circumstance.
C. Responsibilities for Planning
1. Planning staff—The planning staff is a group of planning professionals who help reduce
the planning workload of individual managers, help coordinate the planning activities of
individual managers, and provide tools and techniques needed to solve problems. They
take a broader view than individual managers and go beyond particular departments.
Management Update: Planning staffs were once very popular and used by virtually all
large organizations. In recent years, however, many firms have cut back or eliminated
their planning staffs. This was done to save money and with the idea that operating
managers are really more qualified to develop plans. A few experts are still kept on staff,
however, to provide support and technical advice.
Management Update: As a corollary to the point noted above, planning task forces have
become more popular in recent years as firms have attempted to get their operating
managers more involved in planning.
Extra Example: Tenneco is an example of a firm that has taken this approach. While
Tenneco still has a planning staff, it is much smaller than it used to be. Its members
usually provide support for planning task forces composed of operating managers.
2. Planning task force—A planning task force is a group of line managers with a special
interest in the area of planning who are grouped together to address a particular issue.
Members of the planning staff also may be included in the task force.
Management Update: As the role of planning task forces has increased, so too has the
role of executive committees. These committees provide a natural analog to a planning
task force. That is, the executive committee can represent senior management, and a
planning task force can represent line management. The two groups can then work
together to effectively develop plans.
3. Board of directors—The board of directors establishes the corporate mission and
strategy.
4. Chief executive officer—The CEO plays a major role in the complete planning process
and is responsible for implementing the strategy.
5. Executive committee—The executive committee provides input to the CEO on the
proposals that affect their own units and reviews the various strategic plans that develop
from this input.
Extra Example: Again, this closely mirrors the approach used at Tenneco today. The
firm’s executive committee works with planning task forces, with the efforts of both
supported and assisted by a small planning staff.
6. Line management—Line managers are individuals with formal authority and
responsibility for the management of the organization. They provide valuable inside
information as plans are formulated and implemented, and they execute the plans
developed by top management.
D. Contingency Planning and Crisis Management
Contingency planning is the determination of alternative courses of action to be taken if an
intended plan of action is unexpectedly disrupted or rendered inappropriate.
Contingency planning usually involves various action points that are used to identify the need
to implement alternative plans.
Extra Example: Starbucks recently developed a contingency plan. Recent frosts in
Brazil drove up the price of coffee beans to the point that Starbucks increased its own
prices by 10 percent. It then developed a contingency plan for dealing with future pricing
alternatives. If the price of beans drops to previous levels, Starbucks will lower its own
prices back to previous levels as well. If bean prices remain high, however, Starbucks
will also keep its own prices high.
Discussion Starter: Ask students to recall examples of times when they have engaged in
contingency planning.
A closely related concept is crisis management—the set of procedures the organization uses
in the event of a disaster or other unexpected calamity.
IV. TACTICAL PLANNING
Tactical plans are an organized sequence of steps designed to execute strategic plans.
A. Developing Tactical Plans
Tactical plans must address a number of tactical goals derived from a broader strategic goal,
must deal with specific resource and time issues, and require the use of human resources.
B. Executing Tactical Plans
For proper execution of tactical plans, a manager must evaluate possible courses of action in
light of the goal, make sure each decision maker has the information and resources necessary
to get the job done, ensure vertical and horizontal communication to minimize conflicts and
inconsistent activities, and monitor ongoing activities derived from the plans to make sure the
desired end results are achieved.
V. OPERATIONAL PLANNING
A. Single-Use Plans
A single-use plan is developed to carry out a course of action that is not likely to be repeated
in the future.
1. Program—a single-use plan for a large set of activities
Extra Example: In 2009, Disney acquired Marvel Comics. The process of integrating
the two companies was a program.
2. Project—similar to a program, but generally of less scope and complexity
B. Standing Plans
A standing plan is used for activities that recur regularly over a period of time.
1. Policy—specify the organization’s general response to a designated problem or situation.
Discussion Starter: Give students several examples of policies at your college or
university, for example, the school’s policy regarding scholastic honesty or sexual
harassment. Ask the students to describe why that policy was developed. In the students’
opinion, is the policy adequately addressing the problem?
2. Standing operating procedure (SOP)—outlines the steps to be followed in particular
circumstances.
3. Rules and regulations—describe exactly how specific activities are to be carried out.
Interesting Quote: McDonald’s is famed for its SOPs and rules and regulations. To see
where this mentality comes from, consider this quote from Ray Kroc, founder of
McDonald’s: “The French Fry has become almost sacrosanct for me. Its preparation is a
ritual to be followed religiously.” (Fortune, July 3, 1989, 80.)
Discussion Starter: Ask students for examples of rules and regulations they have
encountered that they did not understand.
Group Exercise: Form students into small groups of four or five members each. Have
each group identify a rule or regulation. Then have them attempt to find out when and
why that rule or regulation was adopted, and how many exceptions are made to it.
VI. MANAGING GOAL-SETTING AND PLANNING PROCESSES
A. Barriers to Goal Setting and Planning

Cross-Reference: Note that Table 6.2 summarizes the barriers to effective goal setting
and planning and also lists the methods for overcoming those barriers.
1. Goals may be inappropriate if they are unattainable, if achieving them will mean a
setback in another area, and if they place too much emphasis on either quantitative or
qualitative measures of success.
Extra Example: Athletic departments are sometimes guilty of having inappropriate
goals. That is, they may put so much emphasis on winning that they break rules in order
to gain a competitive advantage.
2. Improper reward systems can act as a barrier to goal setting and planning.
Extra Example: Following from the boxed insert above, reward systems may also
encourage this behavior in athletic departments. That is, coaches may be rewarded only
for winning even though they may make other contributions and may be doing other parts
of their jobs well. Similarly, coaches have been fired for not winning, even though they
are performing the rest of their job effectively.
3. How quickly the organization’s environment changes (how dynamic and complex the
environment is) can be a barrier to effective goal setting.
4. Some managers are reluctant to establish goals for themselves and their units and act as a
barrier to effective planning.
5. People resist change, and because they do, they may become a barrier to goal setting and
planning.
Cross-Reference: Note that resistance to change is discussed more fully in Chapter 12.
6. Constraints or limits on what an organization can do or is allowed to do can act as a
barrier to goal setting and planning.
B. Overcoming the Barriers

1. Managers must recognize the purpose and limits of goal setting and planning.
2. People responsible for achieving the goals and implementing the plans should be
involved in the process from the beginning. Further, it is important to communicate to
everyone involved in the process the overriding organizational and functional strategies
and how they will be integrated.
3. Goals should be consistent horizontally, across the organization, and vertically, up and
down the organization. Goals and plans need to be revised and updated regularly.
4. People should be rewarded for establishing effective goals and plans and for successfully
achieving them.
C. Using Goals to Implement Plans

Formal goal setting, sometimes called management by objectives or MBO, is a widely used
method for managing the goal-setting and planning processes concurrently to make sure that
both are done effectively.
1. The purpose of formal goal setting is to give subordinates a voice in the goal-setting and
planning processes and to clarify for them exactly what they are expected to accomplish
in a given time span.
Discussion Starter: Have students ever worked under a formal goal-setting system?
Extra Example: Managers at Cypress Semiconductor use a comprehensive form of

MBO to guide virtually all performance. Each employee has dozens of goals, all of which
are stored and continually updated in a central computer network.
2. The process of formal goal setting must start at the top. Top managers must communicate
why they adopted the process, what it will accomplish, and that they are committed to it.
Employees must be educated about formal goal setting and it must be implemented in a
consistent manner. The process begins with collaborative goal setting between a manager
and a subordinate as the goals are clarified and written down. The resources needed to
achieve the goals are discussed and periodic reviews are held to ensure the subordinate is
on track in achieving the goals.
3. Formal goal setting can be effective in improving employee motivation, enhancing
communication, and making performance appraisals more objective. The process can be
ineffective if top management does not support it, if lower-level managers and
employees do not accept the goals of the organization, or if there is an overemphasis on
quantitative goals and plans.
Group Exercise: Have students develop a formal goal-setting system that could be used
in teaching a class such as this one.
END OF CHAPTER QUESTIONS
Questions for Review

1. Describe the nature of organizational goals. Be certain to include both the purposes and the
kinds of goals.
The four purposes of goals are to: (1) provide guidance and direction, (2) facilitate planning,
(3) serve as a source of motivation and inspiration, and (4) be used to evaluate and control.
Businesses that move aimlessly cannot survive in today’s economy. Goal development is essential
because it helps guide the planning process. When employees know and understand the direction
of the business, they are more motivated to accomplish the goals of the organization. Finally, the
goals can be monitored as a control device. There are several kinds of goals: organizational goals,
goals for different areas of the organization, and goals that span different time frames.
2. Describe the scope, responsible personnel, and time frames for each kind of organizational
plan. How are plans of different kinds related?
Strategic plans are long-range and broad plans that will impact the entire organization. They are
typically made by the board of directors and top managers. Tactical plans are mid-range plans with
somewhat less impact than strategic plans and are often made by upper and middle managers.
Operations plans are short-range and limited in scope and are made by middle and lower-level
managers.
3. Explain the various types of operational plans. Give a real or hypothetical business example
for each type. Do not use examples from the text.
A program is a single-use plan that directs a large set of activities, such as Wal-Mart’s acquisition
and integration of the British grocer, ASDA. A project is a single-use plan that is more limited in
scope than a program, such as GM’s project to update the design of its Saturn automobiles. A policy
is a standing plan that is stated very generally. Most universities, for example, have a policy
forbidding discrimination or harassment. A standard operating procedure is a standing plan that

describes the tasks that must be done under certain circumstances. The U.S. Navy uses SOPs to tell
its sailors how to maintain equipment, for example. Rules and regulations are the narrowest type of
standing plans and can substitute for decision-making. Many airlines have a rule, for example, that a
flight attendant must smile at each passenger who addresses him or her.
4. List the steps in the formal goal-setting process. What are some of the advantages for
companies that use this approach? What are some of the problems that may arise from use of
this approach?
Formal goal setting can increase employee motivation towards the accomplishment of specific
goals. It can also enhance communication and make decision making more objective. Formal goal
setting facilitates control too. Problems of formal goal setting include poor implementation, lack of
top management support, the burdensome paperwork that formal goal setting can encourage, and the
rigidity that can result.
Questions for Analysis

5. Managers are frequently criticized for focusing too much attention on the achievement of
short-term goals. In your opinion, how much attention should be given to long-term versus
short-term goals? In the event of a conflict, which should be given priority? Explain your
answers.
Clearly, managers must continually balance short-term and long-term interests. Too much attention
to one or the other can result in ineffectiveness. Students’ opinions will, of course, vary.
6. What types of plans and decisions most likely require board of director involvement, and
why? What types of decisions and plans are not appropriate for board involvement, and why?
Board should oversee any important strategic decisions, and they should also carefully supervise
financial and other types of reporting in order to assure ethical and legal behavior. They should
make decisions related to the CEO’s compensation and activities. In short, they should make any
decisions that the owners of the firm (the stockholders) feel needs oversight. Boards should not
become overly involved in every management decision, which would create difficulties for
managers. Nor should they counter-act every move by the CEO, but they should work to support
and help the CEO grow in his or her management ability.
7. Standing plans help make an organization more effective. However, they may inhibit
experimentation and organizational learning. Under what conditions, if any, should
organizations ignore their own standing plans? In the area of planning, how can an
organization balance the need for effectiveness against the need for creativity?
Standing plans should be abandoned if circumstances change radically, forcing the alteration. Firms
that are more interested in innovation than in efficiency should minimize their use of standing plans.
Managers are constantly balancing the need for creativity with the need for efficiency. One
approach that has met with success at many firms is the development of standing plans—but with a
built-in trigger for re-examination of the plans if circumstances warrant.
Questions for Application

8. Interview the head of the department in which your major exists. What kinds of goals exist for
the department and for the members of the department? Share your findings with the rest of
the class.
The students of many departments will find that there are generally goals in three areas: teaching,
research, and service. Discuss the three areas with the students and try to discover why one is given
more importance than the other two by a given department. It may be interesting to discuss the
inclusion of research because many students do not see the rationale for including or emphasizing
research as a goal of an academic department.
9. Tell about a time when an organization was not able to fully achieve all of its goals
simultaneously. Why did this occur? Is complete realization of all goals impossible for an
organization? Why or why not?
Students’ answers will vary, but here is one example: “At my workplace, we seek to hire
experienced personnel who will be able to offer great customer service, but our budget is limited, so
instead we usually hire entry-level workers, whose customer-service skills are weaker.” Other
reasons for the inability to achieve goals simultaneously might be related to a constraint in other
resources, such as insufficient labor, raw materials, or time. In theory, organizations should be able
to find creative ways to satisfy many or all goals simultaneously. In practice, organizations with
complex sets of stakeholders must try to assure that each group has at least some of its needs met
but is unlikely to be able to fully satisfy all groups.
10. From your library or the Internet, find information about a company’s mission statement and
goals. List its mission and some of its strategic, tactical, and operational goals. Explain the
relationship you see among the goals at different levels.
Answers will vary. For example, if students investigated the mission statement of the IRS, they
would find: “to provide America’s taxpayers with top quality service by helping them understand
and meet their tax responsibilities and by applying the tax law with integrity and fairness to all.”
Among their strategic initiatives are the ability for all taxpayers to file their returns electronically. A
tactical plan that builds on that strategy is the development of relationships with third-party
providers of tax services, such as H&R Block. An operational plan that builds on that tactic is the
development of an IRS web site, which offers specific help and instructions online for every tax
form, to aid online filers. In general, students should find that the mission, strategy, tactics, and
operations build on plans at the previous level.
END OF CHAPTER EXERCISES
Building Effective Decision-Making Skills

I. Purpose
This exercise allows students to apply their decision-making skills to a specific business situation.
II. Format
This exercise calls for reading the case scenario and dividing the class into groups of three or four.
Each group will meet as a management team responsible for deciding the fate of the company’s
Smallville plant.
Teaching Tip: An optional approach would be to square off teams in a debate format
with one team representing management and the other an affected stakeholder group.
III. Follow-Up
A. Your instructor will divide the class into groups of three or four people each. Each group will
meet as a management team responsible for deciding the fate of the Smallville plant.
B. The team may decide to close the plant or keep it open, but the goal of the decision-making
process is twofold: (1) to keep the company viable and (2) to reflect the team’s individual and
group values.
C. If the team decides to close the plant, it must draw up a list of the factors on which it based its
decision and be prepared to justify it.
D. If the team decides to keep the plant open, it must draw up a plan explaining how the company
can still remain competitive.
The team has to keep cost as well as quality issues in mind. The Italian competitors are
currently beating them on both fronts.
E. Each member of each team should be prepared to explain the choices that he or she made in
helping the group reach its decision.
Building Effective Time Management Skills

I. Purpose
This exercise should aid students in learning about the complexity of priority setting within an
organization.
II. Format
This time-management skills exercise includes both individual and group components, and should
take about 15 minutes.
III. Follow-Up
A. Develop a schedule listing the sequence in which you need to meet with the eight parties that
you’ve listed above. Do the best that you can to minimize backtracking (seeing one party and
then having to see him or her again after seeing someone else).
B. Compare your schedule with that of a classmate and discuss the differences.
Students’ answers will vary for the above questions.
C. Do you find that it’s possible to draw up different schedules which are nevertheless equally
valid? If so, why? If not, why not?
Yes, students will be able to develop different schedules that meet the requirements. Some of
the steps are relatively independent of the others. For example, advertising design can begin
without interacting with the others. Therefore, students are free to place this task wherever
they feel it is most appropriate. Other tasks are interconnected. For example, the physical
layout of the store cannot be planned until a space has been leased.
MANAGEMENT AT WORK
The Ingredients of a Sustainability Plan

Mondelēz International is a snack food leader who promotes sustainability throughout its supply chain.
The case outlines sustainability efforts within Mondelēz’s cocoa, coffee, and palm oil divisions. The case
discusses all three types of organizational planning: strategic, tactical, and operational.
Management Update: In 2012 Kraft Foods Inc. split into two companies. One company
specialized in snack foods (Kraft Foods Inc., renamed Mondelēz International) and the
other company (Kraft Foods Group) specialized in grocery items.
In July 2015, Kraft Food Groups merged with H.J. Heinz to form Kraft Heinz. In August
2015, activist investor Bill Ackman announced he had built a 7.5 percent stake in
Mondelēz International, believing the company can cut costs, grow revenues, and place
itself in a position for eventual sale to a competitor. The announcement raises speculation
if Ackman plans to re-merge Mondelez into the new Kraft Heinz company.
1. Case Question 1: Here are a series of Mondelēz’s publicly announced objectives for enhancing
sustainability:
• Reducing production waste to landfill sites by 60 percent.

• Reducing our energy and GHS in manufacturing.
• Educating employees to reuse water and improve processes.
• Reducing the impact of our operations.
• Addressing child labor in the cocoa supply chain.
• Reducing packaging material.
• Eliminating 50 million pounds of packaging material.
• Buying certified commodities.
Which of these are BEST considered strategic plans? Tactical plans? Operational plans? Which
ones might qualify as programs? Projects? Policies? Be sure to explain your reasoning for each
item.
• Reducing production waste to landfill sites by 60 percent.
o Students may consider this a tactical plan as there is a specific and concrete focus
here of reducing landfill waste by 60 percent.
• Reducing our energy and GHS in manufacturing.
o This could be considered a strategic plan as it is broad in scope yet outlines the
priorities.
• Educating employees to reuse water and improve processes.
o Students may consider this an operational plan as the scope is narrow and deals
with few activities. This may be interpreted as a program or a project depending
on the complexity and depth of the education process.
• Reducing the impact of our operations.
o This statement is broad enough to qualify for a strategic plan.
• Addressing child labor in the cocoa supply chain.
o This could also be interpreted as a strategic plan as it is a general statement but
outlines the priority of child labor.
• Reducing packaging material.
o This is a general statement showing the priority of reduced packaging. Students
may feel this is a strategic plan.
• Eliminating 50 million pounds of packaging material.
o This could be considered a tactical plan as the amount of material is stated.
• Buying certified commodities.
o This specific act points to an operational plan. This could also be considered a
policy as it furthers the organizations move toward a sustainable supply chain.
2. Case Question 2: “Our business success,” says Mondelēz chairman and CEO Irene Rosenfeld, “is
directly linked to enhancing the well-being of the people who make and enjoy our products and to
supporting the communities where we grow our ingredients.” Assume that you’re a Mondelēz
representative who’s been asked to give a presentation to students in an introductory management
class. Explain Rosenfeld’s reasoning or her “philosophy” of “business success.” Be sure to give
some examples of how and why this approach works at Mondelēz (which, remember, is a global
snack food company).
The success of the company relies on customers purchasing snack products. Customers are
increasingly opting for healthy snacks. By taking a holistic approach of minding the well-being of
employees, customers, and suppliers, the company is promoting itself as a company that cares.
Having a global presence, the company can ill-afford a customer base on any continent who feels
the company is producing harmful products. For instance, paying special attention to the growing of
products in the supply chain satisfies both the people who live in the growing area as well as
customers purchasing the products anywhere in the world market.
3. Case Question 3: Explain – hypothetically – how the following might emerge as barriers to
sustainability planning at Mondelēz:
• Inappropriate goals.
• An improper reward system.
• A dynamic and complex environment.
• Resistance to change.
• Constraints.
Inappropriate goals may hinder sustainability planning if the goals are unattainable or if they place
too much emphasis on the wrong measure of success. A goal of producing an unsustainable amount
of coffee per acre will hinder sustainability planning.
An improper reward system may encourage suppliers to overestimate their sustainable production.
Many of Mondelēz’s suppliers are countries with unstable governments. If governments change
leaders, the company may face strict controls or a weakened workforce.
Resistance to change may hinder the company if suppliers do not wish to adopt the sustainable
measures the company encourages.
Constraints may come in the form of import restrictions from supplier countries.
4. Case Question 4: According to a 2014 McKinsey & Co. survey of executives, 36 percent included
reputation management – building, maintaining, or improving corporate reputation – among the top
three reasons for addressing sustainability.* Explain how the following management strategies can
help to enhance both sustainability and reputation:
• Setting aggressive internal goals for sustainability initiatives.
• Adopting a unified sustainability strategy with clearly articulated priorities.
• Building a broad leadership coalition in shaping sustainability strategy.
• Ensuring that everyone in the organization understands the financial benefits of
sustainability.
• Setting aggressive internal goals for sustainability initiatives.

o If the company is successful with their goals, they could be the world’s leader at
sustainable production. This could increase both their reputation and their
sustainability efforts as their name will carry more credibility and weight.
• Adopting a unified sustainability strategy with clearly articulated priorities.
o A unified strategy with clearly articulated priorities means the company has a good
chance of successfully fulfilling their goals. Success could build their reputation
and their sustainability efforts.
• Building a broad leadership coalition in shaping sustainability strategy.
o Broad leadership allows for increased sensitivity to a variety of issues. The more
diverse the leadership, the better the company’s reputation.
• Ensuring that everyone in the organization understands the financial benefits of
sustainability.
o Having all employees on the same page and buying into the sustainability
initiatives increases the chance for success.
* Sheila Bonini and Anne-Titia Bové, “Sustainability’s Strategic Worth: McKinsey Global Survey
Results,” McKinsey & Co., July 2014 www.mckinsey.com , on September 15, 2014.
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GREAT BRITAIN.
The War Department of Great Britain has issued a circular to the
officers of the Territorial Medical Corps, recommending that on their
retirement they become members of the St. Andrews’ Ambulance Corps
of the Red Cross, which now numbers 4,000 active members. In the First
Aid Department of this Bulletin will be found a most interesting article on
the plans of the British War Department and the Red Cross for developing
the latter for war relief service. In April, 1909, the Canadian Red Cross
was officially recognized by the government. It is affiliated with the British
Red Cross.
GREECE.
In its report for 1907, the Greek Red Cross states that it furnished
antiseptics and other supplies to twenty-three hospitals. The sick and
wounded refugees from Macedonia were aided. For a number of sick
refugees from Roumelia and Bulgaria tents, linen, and other necessary
articles were provided. After the International Conference at London, the
Greek Red Cross formulated the following recommendations:
1. To procure, as soon as possible, further legal protection for the name
and insignia of the Red Cross.
2. To procure different means for the transportation of wounded.
3. To found a school for the training of nurses.
4. To continue to take part in the anti-tuberculosis campaign.
Its funds and value of supplies amount to $155,285.
JAPAN.
After the Italian earthquake the Japanese Red Cross made an appeal in
its public press and $81,800 were received and sent to Italy. In a letter its
President, Count Matsukata, says that there were many touching
contributions from poor students, sons of peasants, who made great
sacrifices to send their modest contributions, which were accompanied by
naively cordial words of sympathy.
THE NETHERLANDS.
H. R. H., the Duke of Mecklenburg, a prince of the Netherlands, has
been appointed President of the Dutch Red Cross.
RUSSIA.
The Russian Red Cross has again to mourn the loss of one of its most
distinguished members, Prof. Frederick de Martens, who died June 20
while on his way to his estate in Livonia. Professor Martens, renowned for
his knowledge of international law, was a most devoted and enthusiastic
supporter of the Red Cross. In June, 1907, before attending The Hague
Convention, where he was the most prominent Russian representative, he
represented the Russian Red Cross at the Eighth International Red Cross
Conference and carried from this conference some of its important
resolutions to The Hague Convention. During the war with Japan he was
at the head of the Bureau of Prisoners of the Russian Red Cross, and at
the time of his death he was President of the International Red Cross Jury
on the Awarding of the Marie Feodorovna Fund prizes. The American Red
Cross extends its sincere sympathy to the Russian Red Cross for the
serious loss it has thus sustained, and which loss is shared by the
International Red Cross.
SAXONY.
The Saxon Red Cross has created a special committee, which has
charge of relief measures after great calamities. The society sent $5,000
and a large amount of supplies to the Italian earthquake relief.
SPAIN.
The Spanish Red Cross has received from Monsieur Bayod, pharmacist
of the court, two automatic apparatus for the production of oxygen. The
contributions of this society for the Italian relief amounted to some
$20,000, besides a large amount of supplies.
SWITZERLAND.
The Swiss Red Cross has suffered the misfortune of again losing by
death its President, Monsieur Pestalozzi. We desire to express, on the
part of the American Red Cross, our sincere sympathy to our sister
society. The Swiss Red Cross raised $108,646 for the Italian relief. A
number of houses were built in Reggio and Messina, which shelter
seventy-four families.
TURKEY.
At the time of the Armenian massacres the International Committee
received an appeal from the College of Tarsus for Red Cross assistance
for the victims. The Committee telegraphed to the Committee of
Constantinople, asking it to render immediate aid. The latter replied by
telegraph that owing to the lack of personnel, and because of conditions
in Constantinople, it was unable to respond to this appeal. By letter it also
expressed its regrets that it could not send aid to Adana, as its stores had
been entirely exhausted during the Greco-Turkish war and not
replenished. From its small funds it, however, appropriated $400 for the
relief at Adana. The letter, which was signed by Fayk G. della Sudda, as
President of the Red Crescent, told of the difficulties under the old
government, which almost prohibited the society from raising any funds,
but states that under the new government it hopes to make rapid
progress.
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I. DECISION MAKING AND THE PLANNING PROCESS

II. ORGANIZATIONAL GOALS

III. ORGANIZATIONAL PLANNING

A. Kinds of Organizational Plans

IV. TACTICAL PLANNING

VI. MANAGING GOAL-SETTING AND PLANNING PROCESSES

A. Barriers to Goal Setting and Planning

B. Overcoming the Barriers

C. Using Goals to Implement Plans

Extra Example: Managers at Cypress Semiconductor use a comprehensive form of

END OF CHAPTER QUESTIONS

Questions for Review

forbidding discrimination or harassment. A standard operating procedure is a standing plan that

Questions for Analysis

Questions for Application

END OF CHAPTER EXERCISES

Building Effective Decision-Making Skills

Building Effective Time Management Skills

The Ingredients of a Sustainability Plan

• Reducing production waste to landfill sites by 60 percent.

• Setting aggressive internal goals for sustainability initiatives.

Resinol Ointment and Resinol Soap

Resinol Chemical Company

The first Sanitarium established by Seventh-Day Adventists was at

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The Washington Sanitarium

What Shall the Patient Eat?

Pattee’s “Practical Dietetics”

CUMBERLAND STEEL COMPANY

The American Red Cross Bulletin

The Carnahan Press

Application for Membership

Application for Membership

First-Aid and Relief Columns”

Gum Gluten Flour

Army and Navy Academy

WEST POINT, Military Academy, Entrance Examination.

Remarkable Success in all the Service Examinations

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