Planning and Decision-Making Lecture 4
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Questions and Answers

Which of the following is NOT a benefit of planning?

  • Impairs adaptability (correct)
  • Intensifies efforts
  • Provides direction
  • Encourages better ways to do things

Planning helps in developing a sustained competitive advantage.

True (A)

Name one pitfall of planning.

Could impede change

Planning involves setting goals and developing a strategy to achieve ______.

<p>them</p> Signup and view all the answers

Why might planning create a false sense of certainty?

<p>Assumptions made during planning may be wrong. (A)</p> Signup and view all the answers

Match the following benefits of planning with their descriptions:

<p>Provides direction = Guides actions towards goals Encourages development = Promotes innovative approaches Intensifies efforts = Increases motivation and work rate Leads to persistence = Fosters resilience in facing challenges</p> Signup and view all the answers

At what management levels can companies use plans?

<p>At all management levels</p> Signup and view all the answers

Top-level planners are always in tune with daily operations.

<p>False (B)</p> Signup and view all the answers

Which of the following is NOT a step in the effective planning process?

<p>Establish a budget (C)</p> Signup and view all the answers

Goal commitment can be developed by making the goal public.

<p>True (A)</p> Signup and view all the answers

What is an action plan?

<p>A list of specific steps, people, resources involved, and a timeline for attaining a goal.</p> Signup and view all the answers

Proximal goals are _______ goals or subgoals that indicate progress toward distal goals.

<p>short-term</p> Signup and view all the answers

Match the following planning concepts with their definitions:

<p>Goal commitment = Determination to achieve a goal Slack resources = Cushion of extra resources for adaptation Options-based planning = Keeping options open until more information is available Proximal goals = Short-term goals indicating progress toward long-term goals</p> Signup and view all the answers

What is the purpose of tracking progress in an effective planning process?

<p>To indicate progress toward distal goals (D)</p> Signup and view all the answers

Maintaining flexibility in planning entails committing all resources upfront.

<p>False (B)</p> Signup and view all the answers

What is one method to maintain flexibility in an effective planning process?

<p>Options-based planning</p> Signup and view all the answers

What is the first step in the rational decision-making process?

<p>Define the problem (B)</p> Signup and view all the answers

What is the mission statement focused on?

<p>Providing consumers with the best tasting, most nutritious choices (D)</p> Signup and view all the answers

Managers should be willing to solve the problem in rational decision-making.

<p>True (A)</p> Signup and view all the answers

What are decision criteria used for in the rational decision-making process?

<p>To contrast alternatives and guide judgments.</p> Signup and view all the answers

The vision statement includes a goal to provide more value than the competition.

<p>True (A)</p> Signup and view all the answers

What are the components of strategic plans as mentioned in the content?

<p>Markets served, customer service in those markets, positioning against competitors, and required resources.</p> Signup and view all the answers

In the ranking of decision criteria, a weight of ___ indicates it is critically important.

<p>5</p> Signup and view all the answers

Which of the following represents a relative weight in decision-making?

<p>Setting importance by comparison with other criteria (D)</p> Signup and view all the answers

The mission statement is to provide consumers with the best tasting, most __________ choices.

<p>nutritious</p> Signup and view all the answers

Which of the following is a strategy mentioned in the text?

<p>Sell branded products for ≤ 14% over cost (C)</p> Signup and view all the answers

Match the decision-making steps with their corresponding actions:

<p>Define the problem = Recognize the existing gap Identify decision criteria = List dimensions for evaluation Weigh the criteria = Assign importance to each criterion Choose optimal solutions = Select the best option</p> Signup and view all the answers

Absolute weights are assigned by comparing each criterion with every other criterion.

<p>False (B)</p> Signup and view all the answers

Middle management is responsible for developing and implementing tactical plans.

<p>True (A)</p> Signup and view all the answers

What must managers possess to effectively address a problem?

<p>Knowledge, skills, abilities, and resources.</p> Signup and view all the answers

Strategic plans clarify how the company will achieve its __________.

<p>vision</p> Signup and view all the answers

What term best describes Vertical Space's goal to complete one floor each week?

<p>A proximal goal (A)</p> Signup and view all the answers

Match the following terms with their definitions:

<p>Mission = Purpose of the organization Vision = Future aspirations of the organization Strategic Plan = Detailed roadmap to achieve goals Tactical Plan = Short-term actions to implement strategies</p> Signup and view all the answers

Top management is responsible for developing detailed plans for day-to-day operations.

<p>False (B)</p> Signup and view all the answers

What are the two main responsibilities of top management regarding planning?

<p>Developing mission and vision statements, and creating long-term strategic plans.</p> Signup and view all the answers

Nestlé's mission statement emphasizes its position as the world's leading __________ company.

<p>nutrition, health and wellness</p> Signup and view all the answers

How long is a typical strategic plan developed by top management intended to last?

<p>2 to 5 years (B)</p> Signup and view all the answers

Match the following terms with their definitions:

<p>Mission = Declaration of a company’s purpose Vision = Long-term specific goal that unifies efforts Strategic Plans = Plans developed by top management for long-term objectives Proximal Goal = Short-term goal leading to larger objectives</p> Signup and view all the answers

A vision statement should not possess a finish line or time frame.

<p>False (B)</p> Signup and view all the answers

What is a characteristic of a vision statement?

<p>It grows out of the mission statement and stretches and challenges the organization.</p> Signup and view all the answers

What is the primary function of the nominal group technique?

<p>To rank ideas collectively after independent work. (C)</p> Signup and view all the answers

The Delphi technique involves face-to-face discussions among experts to reach a consensus.

<p>False (B)</p> Signup and view all the answers

What major event influenced a significant slowdown in the global economy as mentioned in the content?

<p>the coronavirus pandemic</p> Signup and view all the answers

The nominal group technique improves group decision-making by decreasing __________ conflict.

<p>a-type</p> Signup and view all the answers

Match the following cruise companies with their actions during the pandemic:

<p>Costa Cruises = Cancelled four Asian cruises Royal Caribbean = Cancelled 18 cruises Carnival Cruise Lines = Owned Princess Cruise Lines Princess Cruise Lines = Related to the Diamond Princess incident</p> Signup and view all the answers

Which company cancelled the most cruises during the pandemic?

<p>Royal Caribbean (B)</p> Signup and view all the answers

All companies involved in the cruise industry were experienced in dealing with the coronavirus before its outbreak.

<p>False (B)</p> Signup and view all the answers

What should be avoided to improve rational decision-making according to the discussion?

<p>limits to rational decision-making</p> Signup and view all the answers

Flashcards

What is planning?

Setting clear goals and developing a strategy to achieve them.

Benefit of Planning: Direction

Gives a clear direction for the organization or individual.

Benefit of Planning: Innovation

Encourages exploring new and better ways to achieve goals.

Benefit of Planning: Effort

Planning motivates people to work harder towards the goal.

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Benefit of Planning: Persistence

Planning keeps people focused even in challenging times.

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Benefit of Planning: Competitive Advantage

Planning can help a company stay ahead of the competition over time.

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Pitfall of Planning: Inflexibility

Flexibility is important for adapting to changing situations.

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Pitfall of Planning: False Certainty

Planning can create a false sense of security if assumptions are wrong.

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Vision

A long-term, specific goal that grows out of the company's mission, unifies company-wide efforts, stretches and challenges the organization, and has a finish line and time frame.

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Mission

A declaration defining a company's purpose or reason for existing.

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Strategic Plans

Plans that are implemented to achieve the company's long-term vision.

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Proximal Goal

A goal that focuses on a specific, short-term task or objective.

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Distal Goal

A goal set for the distant future.

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Top Management Role in Planning

The top management team is responsible for establishing the company's mission, vision, and strategic plans.

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Capstone Goal

A goal that is directly related to the completion of a project or task.

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Passive Goal

A goal that requires no action and is not directly tied to a specific objective.

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Rational Decision Making

A process for systematically identifying and solving problems by evaluating alternatives and choosing the best solution.

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Problem

The difference between the current situation and the desired outcome.

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Decision Criteria

Factors used to compare and judge different options for a decision.

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Goal Commitment

The determination to reach a desired outcome. It's about truly wanting to achieve the goal. This can be fostered by involving the individual or team in setting the goal itself and making the goal public.

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Absolute Weighting

Assigning a level of importance to each decision criterion based on its individual value.

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Action Plan

A detailed roadmap outlining steps, resources, and timelines for achieving a specific goal.

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Relative Weighting

Assigning importance to decision criteria by comparing them to each other.

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Defining the Problem (Step 1)

Identifying a problem requires awareness, willingness to address it, and having the necessary resources.

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Options-Based Planning

A method for adapting to changing circumstances by keeping options open and not committing resources prematurely. It involves preparing for different scenarios.

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Identifying Decision Criteria (Step 2)

This step involves choosing the aspects that will be used to evaluate different options for the problem.

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Weighing the Criteria (Step 3)

This step involves determining the relative significance of each chosen criteria by comparing them to each other or to a standard.

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Slack Resources

Spare resources that can be used to address unexpected problems or seize opportunities. It provides flexibility and resilience.

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Flexibility in Planning

The ability to adapt plans in response to changing conditions or unexpected events. It requires flexibility and anticipating potential challenges.

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Tracking Progress

The process of monitoring progress towards goals and making adjustments as needed. It involves gathering feedback and identifying areas for improvement.

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Mission Statement

A statement that captures an organization's ultimate goal and purpose, guiding its actions and providing a clear direction for the company.

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Vision Statement

A statement that outlines the organization's long-term aspirations and desired future state, setting a vision for the company's ultimate achievement.

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Tactical Plans

Plans developed by middle management to implement strategic plans and accomplish specific objectives. They bridge the gap between strategic and operational levels.

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Selling Branded Products for ≤ 14% over Cost

A strategic goal of selling branded products at a cost ≤ 14% above the actual cost. It emphasizes creating value for the customer by keeping prices competitive.

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Selling Only One High-Quality Item Per Category

Strategically choosing and selling only one high-quality item within each product category to enhance efficiency and focus resources.

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Selling Straight Off Shipping Pallets

Selling products directly from shipping pallets to streamline the process and reduce overhead costs.

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Maintaining Extremely Low Overhead

Maintaining minimal overhead costs by focusing on essential activities and eliminating unnecessary expenditures.

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What is the Nominal Group Technique?

A structured approach where group members silently generate ideas, share them openly for discussion, and then secretly rank them to arrive at the most preferred solution.

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What is the Delphi Technique?

A technique using a panel of experts who anonymously provide their feedback on questions related to a specific issue. The facilitator then summarizes and circulates the responses, leading to further rounds of feedback and narrowing down to a consensus.

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What is C-type conflict?

This type of conflict is focused on the content of the ideas being discussed.

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What is A-type conflict?

This type of conflict is related to personal relationships, emotions, and power struggles within a group.

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How does the Nominal Group Technique help decision-making?

The Nominal Group Technique is effective in reducing this type of conflict during group decision-making.

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Why is the Delphi Technique used?

The Delphi Technique is useful for situations where physical proximity of experts is not possible and anonymity is desired during discussion.

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What is the goal of the Delphi Technique?

The Delphi Technique helps to build consensus by systematically gathering and refining the opinions of experts through multiple rounds of feedback.

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What is a limitation of the Nominal Group Technique?

The Nominal Group Technique can limit this type of conflict by focusing on objective rankings, potentially hindering dynamic and creative discussions.

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Study Notes

Lecture 4: Planning and Decision-Making

  • Learning Objectives: By the end of this module, students should be able to discuss the benefits and pitfalls of planning, outline the steps for creating an effective plan, discuss how companies use plans at all management levels, use steps and avoid limitations to rational decision-making, and understand how group decisions and techniques improve decision-making.

Planning

  • Definition: Planning involves setting goals and developing a strategy to achieve those goals.
  • Benefits: Planning provides direction, encourages better ways to do things, intensifies efforts, leads to persistence, and helps develop a sustained competitive advantage for companies and individuals (employees).
  • Pitfalls: Planning can impede needed adaptation, create a false sense of certainty if based on wrong assumptions, and/or be affected by the disconnect between top-level planners and daily operations.

Effective Planning Process

  • Steps: The process includes setting goals, developing commitment, developing effective action plans, tracking progress towards goals, and maintaining flexibility.

Effective Planning: Setting Goals

  • SMART Goals: Goals should be Specific, Measurable, Achievable, Relevant, and Time-bound.

Effective Planning: Developing Commitment

  • Goal Commitment: This is about the determination to achieve a goal, which can be achieved by setting goals participatively, making them public, and getting repeated support/reinforcement from top management.

Effective Planning: Develop Action Plans

  • Action Plan Content: A list of specific steps, people involved, and a schedule/timeline for attaining the goal.

Effective Planning: Tracking Progress

  • Proximal Goals: These are short-term goals that help track progress towards long-term (distal) goals. This includes intermediate milestones.
  • Performance Feedback: Gathering and providing feedback is crucial for tracking progress.

Effective Planning: Maintaining Flexibility

  • Options-Based Planning: This method involves keeping multiple options open by making simultaneous investments in alternative plans.
  • Slack Resources: Having extra resources is crucial to adapt to unanticipated challenges/opportunities which helps maintain flexibility.

Planning: From Top to Bottom

  • Strategic Plans (Top Management): Responsible for developing the mission, vision, and 2-5 year strategic plans.
    • Mission: The purpose and reason for a company's existence.
    • Vision: The long-term, specific goal that unifies company efforts and has a defined timeframe.

Planning: Bending in the Middle

  • Tactical Plans (Middle Management): Implement strategic plans, focusing on 6-24-month objectives like adding a new product line, opening a new store, or creating a marketing campaign.

Planning: Finishing at the Bottom

  • Operational Plans (Lower-Level): Day-to-day decision making, focused on producing or delivering products/services within a set timeframe (30 days to 6 months).
  • Types of Operational Plans:
    • Single-use plans for unique events
    • Standing plans for frequently recurring situations (policies, procedures, and rules)
    • Budgets/schedules for allocating resources for goals

Rational Decision-Making

  • Rational Decision-making: This is a systematic process for defining problems, evaluating alternatives, and choosing ideal solutions when making decisions.
    • Steps:
      • Define the problem: identify the gap between the current and desired state. Managers need to be aware of the problem, be willing to deal with it, have the required resources, skills, and abilities.
      • Identify Criteria: establish dimensions to evaluate alternatives.
      • Weigh criteria: assign importance to criteria, either by absolute or relative weights (compare every criteria with each other).
      • Generate alternatives: create possible solutions.
      • Evaluate alternatives: rate alternatives against criteria.
      • Compute weighted scores: multiply rating with weights and add them up to get the weighted scores for each alternative.
      • Select the best solution: the alternative with the highest weighted score is chosen.

Group Decision-Making

  • Group Advantages: More effective in defining problems and generating solutions but also has pitfalls.
  • Group Pitfalls:
    • Groupthink: Pressuring members for consensus over critical thinking.
    • Domination by individuals: Limiting participation and discussions.
    • Lack of Accountability: individuals may not feel responsible for the outcome of a decision and cause apathy.
    • Equality Bias: Accepts proposals from less competent members.

Types of Conflict in Group Decision-Making

  • C-Type (Cognitive Conflict): disagreements related to differences of opinion about the issue. Essential for better decisions.
  • A-Type (Affective Conflict): disagreements that become personal due to emotional involvement. This kind of conflict negatively impacts decision-making effectiveness.

Methods of Generating C-Type Conflict In Group Decision-Making

  • Devil's advocacy: individuals/subgroups question existing solutions and critiques.
  • Dialectical inquiry: presenting opposing solutions/ideas (thesis/antithesis) to stimulate debate and produce a stronger argument.

Nominal Group and Delphi Techniques

  • Nominal Group Technique: Members quietly brainstorm, share ideas, rank them and the solution is selected based on their average.
  • Delphi Technique: Experts respond to questions/share ideas in writing to reach consensus.

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Lecture 4: Planning and Decision-Making PDF

Description

This quiz covers key concepts from Lecture 4 on Planning and Decision-Making. Students will explore the benefits and pitfalls of planning, steps for effective planning, and the importance of group decisions. Gain an understanding of how successful companies leverage planning at all management levels.

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