Planning

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Questions and Answers

Which of the following are examples of standing plans?

Policies & Strategies (correct)

Budgets

Projects

Programs

What type of plan is characterized by being clearly defined and leaving no room for interpretation?

Specific Plans (correct)

Flexible Plans

Directional Plans

Single Use Plans

At which level do managers focus on competitive strategies against direct competitors?

Business Level (correct)

Functional Level

Corporate Level

Strategic Level

Which of the following is NOT a component of single use plans?

Procedures (A) Signup and view all the answers

What type of planning provides general guidelines and allows discretion in implementation?

Directional Plans (B) Signup and view all the answers

What is a primary concern of corporate level executives?

Determining resource allocation (B) Signup and view all the answers

Which level of management is typically responsible for specific departments like finance or marketing?

Functional Level (B) Signup and view all the answers

Which question would most likely be addressed at the functional level of planning?

What activities does my unit need to perform? (C) Signup and view all the answers

What is the primary focus of tactical plans?

Short-term execution for specific business units (B) Signup and view all the answers

How do operational plans differ from tactical plans?

Operational plans focus on small units and short-term actions. (D) Signup and view all the answers

What is the time frame typically associated with long-term planning?

3 to 5 years (B) Signup and view all the answers

Which of the following is NOT characteristic of standing plans?

They are modified frequently. (B) Signup and view all the answers

What distinguishes short-term planning from other types of planning?

It is made for a period of one year or less. (B) Signup and view all the answers

What describes the nature of single-use plans?

They address issues that will not arise again in the same form. (C) Signup and view all the answers

What is a key characteristic of rational decision-making?

Choices are logical and maximize value. (A) Signup and view all the answers

How does tactical planning relate to strategic planning?

Tactical plans complement strategic plans by translating them into specific goals. (C) Signup and view all the answers

Which characteristic is typically true of operational plans?

They focus on specific units within the organization. (D) Signup and view all the answers

Which decision-making style focuses primarily on internal sources such as feelings and intuitions?

Non-Linear Thinking Style (C) Signup and view all the answers

What does bounded rationality recognize about decision-making?

Managers satisfice instead of maximizing due to limitations. (D) Signup and view all the answers

Which of the following is NOT an assumption of rational decision making?

Feelings should be used as a guiding force. (D) Signup and view all the answers

What does selective perception bias primarily influence?

The identification of problems and alternatives. (B) Signup and view all the answers

How does availability bias affect decision-making?

It makes decision-makers focus on recent and vivid events. (A) Signup and view all the answers

Which type of plan is typically associated with the corporate level of the organization?

Strategic Plans (A) Signup and view all the answers

Which decision-making style is characterized by a preference for external data and facts?

Linear Thinking Style (A) Signup and view all the answers

What is the main purpose of planning in an organization?

To provide direction and reduce uncertainty (D) Signup and view all the answers

Which of the following best describes the difference between goals and plans?

Goals are targets, while plans are actions to achieve those targets. (C) Signup and view all the answers

Which step comes after defining goals and objectives in the planning process?

Developing premises regarding future conditions (A) Signup and view all the answers

What is the focus of strategic planning?

Setting the long-term direction of the organization (D) Signup and view all the answers

Which of the following is NOT a characteristic used to describe plans?

Cost Efficiency (D) Signup and view all the answers

Which type of planning typically involves top management?

Strategic Planning (C) Signup and view all the answers

What is a key feature of tactical planning?

It determines short-term actions to support strategic objectives. (B) Signup and view all the answers

Which of the following planning types is characterized by its focus on ongoing activities?

Operational Plans (A) Signup and view all the answers

Study Notes

Planning Process

Planning is a process involving setting organizational goals, developing strategies for achieving those goals, and creating action plans to reach those goals.

Importance of Planning

Planning provides direction to all organizational personnel (managers and employees).
It reduces uncertainty.
It minimizes waste of time, effort, and resources.

Goals and Plans

Goals are targets management wants to achieve.
Plans are the means (actions) to achieve those goals.

Characteristics of Plans

Comprehensiveness: How broadly the plan covers.
Time frame: Length of the plan (short-term, long-term).
Specificity: Clarity and detail of the plan.
Frequency of use: How often the plan is used (standing plans vs. single-use plans).

Steps in Planning

Define goals/objectives, and evaluate current situation against those goals.
Develop premises regarding future conditions.
Analyze alternatives and make choices.
Implement the plan.
Evaluate results and take corrective action.

Types of Plans

Strategic Plans: Long-term direction of an organization, encompassing 3-5 years. Analyze environmental factors, competition, and internal resources.
Tactical Plans: Translate strategic plans into specific goals for different parts of the organization (1-2 years). Coordinate work across departments and keep units focused on strategic goals.
Operational Plans: Translate tactical plans for smaller units (up to 12 months). Focus on short-term specifics. Less complex, effects are mainly within the department itself.
Long-term Plans: Strategy-focused plans covering 3-5 years, considering economic, social, and technological factors.
Short-term Plans: Usually covering one year; maintain production and distribution of current products to existing markets. Directly affects functional groups (marketing, finance).
Standing Plans: Repeatedly used over a long period (organizational mission, objectives, strategies, policies, procedures, rules). Guide managers in routine matters consistently.
Single-Use Plans: Non-recurring plans for specific events (programs, projects, budgets).

Planning at Different Levels

Corporate Level: Focuses on industries, markets for investment, resources allocation. Senior executives participate.
Business Level: Focus on competition (competitor analysis).
Functional Level: Focus on departmental activities, customer expectations, competitor information. Functional heads (finance, marketing) participate.

Decision Making

Rational Decision Making: Logical and consistent choices maximizing value. Assumes objective decision-makers with clear goals, knowing all alternatives and consequences.
Bounded Rationality: Realistic approach; decision-makers are limited by their ability to process information. They make satisfactory (satisfice) rather than optimal (maximize) choices.
Intuition-Based Decision Making: Decisions based on experience, feelings, and judgment. Can be based on cognitive analysis, experience, values, ethics, or subconscious thought processes.
Decision Making Styles:
- Linear Thinking: Preference for using external data and facts, processed through rational-logical thought.
- Non-linear Thinking: Preference for internal information (feelings, intuitions), processed through insights, hunches.

Decision-Making Errors and Biases

Selective Perception Bias: Decision-makers filter information based on their biased perception.
Availability Bias: Decision-makers focus on recent, vivid events, ignoring objective information or probability estimates.
Sunk Cost Errors: Decision-makers inappropriately focus on past expenditures (time, money, effort) when making present decisions.

Additional Planning Techniques

Forecasting: Predicting future events.
Contingency Planning: Creating backup plans for anticipated problems.
Scenario Planning: Exploring different possible future scenarios.
Benchmarking: Comparing performance to industry best practices.
Participatory Planning: Involving multiple stakeholders in the planning process.

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