Managerial Skills & Goal Formulation: Types, Formulation, Challenges

1. Managerial Skills: The Three Pillars of Effective Leadership

Managers need three core skill sets to succeed. These are not just theoretical—they directly impact performance, team morale, and organizational success.

1.1 The Three Types of Managerial Skills

mindmap
  root((Managerial Skills))
    Conceptual
      "Big-picture thinking\nVision, strategy, problem-solving"
      Example: CEO of Nabil Bank aligning bank-wide goals
    Human
      "Interpersonal skills\nCommunication, motivation, teamwork"
      Example: Daraz’s customer service managers resolving complaints
    Technical
      "Job-specific expertise\nIT, finance, operations"
      Example: NTC engineers designing network infrastructure

How they work together:

• Conceptual skills guide what to do (e.g., "Expand to 50 branches in 3 years").
• Human skills ensure who executes it (e.g., motivating branch managers).
• Technical skills provide how (e.g., using CRM software like Salesforce).

1.2 Skill Requirements by Management Level

Key Insight:

• First-line managers (e.g., Pathao drivers’ supervisors) need more technical skills (e.g., route optimization).
• Top managers (e.g., NEPSE’s board) rely on conceptual skills (e.g., predicting stock trends).

2. Goal Formulation: Turning Vision into Action

Goals are the compass of an organization. Poorly set goals lead to chaos; well-defined goals drive success.

2.1 The Goal Hierarchy

flowchart TD
  A["Mission: 'Why we exist'"] --> B["Vision: 'Where we're headed'"]
  B --> C["Objectives: 'How we get there'"]
  C --> D["Strategies: 'Big moves'"]
  D --> E["Tactics: 'Daily actions'"]
  E --> F["Operational Goals: 'Specific tasks'"]

Example: Nabil Bank’s Loan Department

• Mission: "Financial inclusion for all Nepalis."
• Objective: "Increase loan approvals by 20% in 2024."
• Strategy: "Digitize loan applications via eSewa."
• Tactic: "Train 500 staff on new software."
• Operational Goal: "Process 10,000 applications/month."

2.2 How Goals Are Formulated: A Step-by-Step Process

1. Environmental Scanning
   • Analyze internal (e.g., NTC’s current network capacity) and external (e.g., government policies) factors.
2. Mission & Vision Statements
   • Mission: Core purpose (e.g., "Himalayan Java: Sustainable coffee for Nepal").
   • Vision: Long-term aspiration (e.g., "Be Nepal’s #1 FMCG brand by 2030").
3. Setting Objectives (SMART Criteria)
   • Specific (e.g., "Increase online orders by 30%" vs. "Sell more").
   • Measurable (e.g., "30% increase in Daraz’s monthly orders").
   • Achievable (e.g., "With current marketing budget").
   • Relevant (e.g., Aligns with Daraz’s "last-mile delivery" focus).
   • Time-bound (e.g., "By December 2024").
4. Strategy Formulation
   • Corporate-level: "Expand to 10 new districts."
   • Business-level: "Use WhatsApp for customer support."
   • Functional-level: "Train 200 agents on WhatsApp Business API."
5. Tactics & Operational Goals
   • Break strategies into actionable tasks (e.g., "Hire 50 WhatsApp support staff").

2.3 Goal Succession and Displacement

Why It Matters:

• Succession ensures alignment (e.g., Pathao’s "Happy drivers" → "Happy customers").
• Displacement causes failure (e.g., Daraz’s early focus on discounts over logistics).

3. Problems in Goal Formulation

Even well-intentioned goals can fail. Common pitfalls:

mindmap
  root((Problems in Goal Formulation))
    Vague Goals
      "Example: 'Improve service' → What? How?"
    Misalignment
      "Example: NTC’s 'Cut costs' vs. 'Upgrade infrastructure'"
    Overambition
      "Example: 'Be #1 in Asia by 2025' (unrealistic for a startup)"
    Inflexibility
      "Example: Ignoring COVID-19 when setting 2020 sales targets"
    Lack of Participation
      "Example: Top managers setting goals without frontline input"

Real-World Case: Kathmandu Traffic Routes

• Problem: Goal was "Reduce congestion by 2023" but lacked specific routes or public transport integration.
• Result: Partial success; some areas improved, others worsened.

4. Managerial Skills in Action: Case Study

Case: Nabil Bank’s Loan Approval Process

Scenario: Nabil Bank wants to increase loan approvals by 25% but faces delays due to manual paperwork.

Skills Applied:

Goal Hierarchy in Action:

1. Mission: Financial inclusion.
2. Objective: 25% more loans.
3. Strategy: Digitization.
4. Tactic: Train 500 staff.
5. Operational: "Process 5,000 digital apps/month."

## In the Real World

1. eSewa (Nepal)

   • Skill Used: Technical + Human
   • How? eSewa’s managers used technical skills to develop QR-based payments, while human skills ensured customer trust through tutorials. Their goal: "Be the default payment app for 80% of Nepalis by 2025" (SMART: Specific, Measurable, Achievable, Relevant, Time-bound).

2. Google (Global)

   • Skill Used: Conceptual + Goal Formulation
   • How? Google’s OKRs (Objectives and Key Results) framework forces managers to set clear, measurable goals. Example:
     • Objective: "Improve Android security."
     • Key Result: "Reduce malware infections by 30% in 2024."
   • Why It Works: Avoids goal displacement (e.g., not sacrificing security for ad revenue).

3. Pathao (Nepal)

   • Skill Used: Human + Tactical Goals
   • How? Pathao’s driver motivation system uses:
     • Human skills: Weekly feedback sessions.
     • Tactical goals: "Increase driver retention by 20% via bonuses."
   • Real Impact: Reduced driver turnover from 50% to 30% in 2023.

## Exam Tip

How This Unit Is Tested (Based on Past TU Exams):

1. Definitions (5 marks)

   • Expect: "Define organizational goals" or "Explain goal displacement."
   • Tip: Use bullet points for definitions (e.g., "Goals are time-bound, measurable targets...").

2. Process Questions (10 marks)

   • "How are organizational goals formulated?"
   • Tip: Draw the goal hierarchy flowchart (mission → vision → objectives → strategies → tactics) and label each step.

3. Skill Applications (10 marks)

   • "Explain the different skills required for managers."
   • Tip: Use the skill matrix table (conceptual/human/technical) with Nepali examples (e.g., NTC engineers = technical).

4. Problem Analysis (5 marks)

   • "State and explain the problems of goal formulation."
   • Tip: List 3 problems (e.g., vagueness, misalignment) with one Nepali example each (e.g., "NMB’s 2021 scam due to misaligned incentives").

5. Case Studies (10 marks)

   • "A company faces X problem. How would you apply managerial skills to solve it?"
   • Tip: Use the Nabil Bank loan case as a template:
     • Identify the skill gap (e.g., "Lack of technical skills in digitization").
     • Propose a solution (e.g., "Train staff on eSewa API").
     • Link to goal formulation (e.g., "This supports the objective of 25% more loans").

Common Mistakes to Avoid:

• ❌ Vague answers: Instead of "Goals are important," say "Goals provide direction, allocate resources, and motivate employees (e.g., NTC’s 'Reduce downtime' guides engineers’ daily tasks)."
• ❌ Ignoring real-world examples: Always tie answers to Nepali companies (e.g., Daraz, Nabil Bank) or global firms (Google, WhatsApp).
• ❌ Overcomplicating: Exams reward clear, structured answers. Use bullet points and tables for comparisons.

Final Pro Tip:

• Memorize the SMART criteria and goal hierarchy flowchart—they appear in every exam.
• Practice drawing the skill pyramid (technical → human → conceptual) for 10-mark questions.