Comparing top-down and bottom-up approaches to organizational goal planning

¶ … setting of goals is a useful way to govern and measure activity. Goals give organizations a way of orienting their actions toward the future, and learning how to improve performance. However a crucial part of setting goals relates to planning. Planning is the method whereby an organization can arrange its activity to evaluate and aim for the goal that has been set. Planning will begin with a careful evaluation of the organizational status quo -- a survey of its operations and resources in the present moment -- and then evaluate the best way forward in terms of achieving the desired results represented by the goal that has been set. However, in terms of how this planning should be done, it is worth evaluating two approaches: the top-down approach and the bottom-up approach.

A top-down approach to organizational planning represents what most people would think of when asked to consider the issues of leadership and goal-setting in any type of organization. This means that organizational leaders are the ones who will actually do the necessary evaluations in planning, and will be the ones who set the goals. This model is familiar and comfortable to most, and it has numerous advantages. For a start, those in leadership positions will be best able to evaluate the organization's overall resources in all different areas: a crucial part of planning will be to allocate these resources judiciously and economically, since any organization will have limitations on its resources and it makes no sense to set a goal that cannot be achieved because of such material limitations. The top-down approach is also one in which the planning and setting of goals can be geared toward success. There is a useful mnemonic device that can be used by an organization's leadership in terms of planning goals that are effective. Pryor and Bright (2011) state it succinctly, when they observe that "successful goals can be characterized as Specific, Measurable, Achievable, Realistic, and Time-based -- the so-called SMART goals" (185). It is clear that organizational leadership will be in a unique position to plan according to these criteria, and make sure that the goals which are set manage to follow these five clear qualifications.

However, the top-down model is not the only model available for organizations. In some circumstances it might be useful to employ a bottom-up model, in which the planning and the setting of goals is done by the actual workforce. This would still employ the criteria of SMART goals, of course, but as a model it is useful in circumstances where it is the workforce that can best address the question of what goals can be characterized as specific, measurable, achievable, realistic, and time-based. An organization with a number of individual agents (like a sales force, for example) that has a better sense of the possibilities in the market than leadership does might find it useful to employ a bottom-up model, by asking this sales force to characterize what sort of goal might actually be achievable or realistic, or asking them to evaluate how much time would be required to realistically achieve a suggested goal offered by leadership. The limitations to the bottom-up model are fairly obvious, though. Management experts Barney and Griffin observed in 1992 that "organizations that use a strict bottom-up process sometimes lack clear direction and purpose" (200). This would be clear in an organizational setting where numerous different low-level employees are being asked to offer input on the setting of goals -- what ends up vanishing is the visionary element, that can see clearly what an organization should do. The point of organizational leadership, after all, is to lead. The crucial question in terms of what type of planning should be employed, however, is whether the workforce has greater insight into what is achievable.