Advanced Planning Analysis Under

Strategic Risk Management: An

Emergence Of Goal Congruence Approach

Prof. Sarbesh Mishra, PhD

NICMAR, Hyderabad Campus, India
Tel - +91 – 40 – 64510 763 (Off)
+91 – 93 968 44687 (Mob)

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About Myself
Name : Sarbesh Mishra

Qualifications I. B.Com (Hons)

II. Post-graduate In Commerce
III. M.Phil In Commerce
IV. Ph.D. (Commerce)

Experience I. Lecturer in Commerce(2001–2005)–University of Delhi, Delhi.

II. Lecturer in Senior Scale(2005–2007)–Army Institute of
Management and Technology (AIMT), NOIDA.
III. Assistant Professor(2007 Onwards)–National Institute of
Construction Management and Research (NICMAR), Hyderabad

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 Related thoughts
 The most successfully man in life is the
man who has the best information.
Benjamin Disraeli, Ex-PM, England
 He who controls the past controls the
future. George Orwell, English Author
 A man should not be ashamed to own
that he has been in the wrong, which is
but saying in other words, that he is
wiser today than yesterday.
Jonathan Swift, Irish Author

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Styles of Management
 Fire fighting – This consists of
reacting to the events and crises,
after their occurrence.

 Tunnel Vision Approach - Tunnel

vision is a selective perception of
what constitutes the organization’s
concern

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Planning – as a tool
 Planning has been defined as a process
which begins with objectives; defines
strategies, policies and detailed plan to
achieve them; which establishes an
organization to implement decisions and
feedback to introduce new planning cycle.”

 Planning is vital to an organization’s future

success.

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Planning function – A pilot study
Stanley Thune and Robert House analyzed the
planning function in 36 similar firms in six
industries. This has led to the conclusion:
 Those firms that rely on formal planning
department were more successful than
those rely on informal planning,
 Those firms that rely on a formal planning
department perform more successfully
after the system is instituted than
previously.

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Merits of Formal Planning
 Prepares firm to operate in dynamic
world.

 Helps in adapting to the ensuing changes

in the technology, finance, resource
availability, economic conditions, etc.

In view of benefits of formal planning, most

firms rely on formal planning system.

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Cost Accounting – A tool for decision
making
 Cost Accounting otherwise referred as
Management Control System comprise
of rules and procedures aimed
accumulation and communication of
relevant cost information for internal
decision making.
 These control systems formalize the
objective of the organization and
express them operationally as
performance criteria to be met by the
individuals in the organization.
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Goal Congruence - Definition
 Central to the efficient working of the
control systems is goal congruence.

 Goal Congruence is the harmonization

of individual and group objectives
within the organization and the objectives
of the organization as a whole.

Robert N. Anthony was perhaps the first to stress

the importance of goal congruence.
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Implementing Goal Congruence
 Goal congruence is achieved when
individuals in the organization strive or
are induced to strive towards the
company goals.

 The essence of company’s goals is

conveyed by planning process, which
expresses these goals in terms of
budgets, standards and other formal
measures of performance.
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 Contd….
To achieve goal congruence the following
ideas are important –
 The firm should be viewed as pluralist
entity where coalitions of individual seek
to express their own aspirations within the
structure of the firm.
 Personnel cannot be viewed as people
sharing the same goal, but also as people
striving for such rewards such as power,
security, survival, and autonomy.
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Contd….
A firm may emphasize multiple goals by
stressing that organizational performance
be measured in the following areas:

(i) Profitability, (ii) Market Position, (iii)

Productivity, (iv) Product Leadership, (v)
Personnel Development (vi) Employee
Attitude, (vii) Public Responsibility, and
(viii) A Balance between short-range and
long-range goals.

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Contd….
 Individuals work in different hierarchies
and handle different responsibilities &
may have different goals. But they must
come together as far as Company’s Goal
is concerned. This term is used when the
same goals are shared by top managers
and their subordinates.

 This is one of the many criteria used to

judge the performance of an accounting
system.

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Significance of Goal Congruence
• Ensures frictionless working.
• Ensures achievement of organization’s
goal/strategic objective.
• Ensures coordination & motivation
of all concerned
• Ensures consistency in the working
of all concerned.

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Contd….
• Gives fair chance to its employees
to achieve their personal goals.
• Enhances the loyalty towards the
company.
• Satisfies prime requirement of
Management Control System
(MCS)

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Factors - Influence the Goal
Congruence
Informal Factors:

 External factors – set of attitudes of the

society, work ethics of the society

 Internal factors (Factors within the

organization)
 Culture- “Common beliefs, shared
values, norms of behavior &
assumptions” implicitly accepted and
explicitly built into.
 Mgt. Style – Informal/Formal
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Contd….
 The Communication Channels

 Perception and Communication –

e.g. Budget (meaning): A strict profit
control plan, Budget: A tentative
guiding profit plan

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 Formal Factors
 Management Control System – A
Strategy itself

 Rules – Instructions, manuals and

circulars, Physical controls, system
safeguards, task control system.

Everything percolates from the Company’s strategic

goal. Anything loosing the sight of goal will be
immediately taken note of and a corrective action
is initiated to bring back the activity on the track.

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Schematic Representation of Goal Congruence in an Organisation
Company’s Goals &
Strategies
Prepare Strategic
Revise Plans for
Implementation

Revise Prepare Annual

Revise the Programs/ Budgets
Goals
/Policies Measure
(Interactive Responsibility
MCS) Center’s
Performance

Report Actual &

Reward Budgeted
Feedback

Compare A V/s B

Corrective Action

Satisfactory Non-Satisfactory

Feedback
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THANK
YOU
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