OM Chptr5 Planning and Decision Making PDF

MGMT Planning and Decision Making Chapter 5 Planning  is the process of setting objectives and determining the actions required to achieve them.  Choosing a goal  Developing a method or strategy to achieve that goal 2 How to Make a Plan Tha...

MGMT Planning and Decision Making Chapter 5 Planning  is the process of setting objectives and determining the actions required to achieve them.  Choosing a goal  Developing a method or strategy to achieve that goal 2 How to Make a Plan That Works  Effective Planning Setting Goals S.M.A.R.T. Goals  Specific  Measurable  Attainable  Realistic  Timely 4  Effective Developing Commitment to Planning Goals  Goal commitment is the determination to achieve a goal  Techniques  Set goals collectively  Make the goal public  Obtain top management’s support 5  Effective Planning Develop Effective Action Plans An action plan lists…  Specific steps (how)  People (who)  Resources (what)  Time period (when) …for accomplishing a goal 6  Effective Planning Tracking Progress  Set proximal goals (short-term) and distal goals (long-term)  Gather and provide performance feedback  Needs to be regular and frequent to allow for adjustments 7  Effective Planning Maintaining Flexibility  Options-based planning This concept refers to a flexible approach to planning where multiple strategies or options are developed and evaluated to allow an organization or individual to pivot as circumstances change.  Slack resources a cushion of resources, like extra time or money, that can be used to address and adapt to unanticipated changes. 8 Planning from Top to Bottom  Top management (long-term, conceptual)  Responsible for developing long term strategic plans  Strategic plans make clear how to serve customers and position against competitors for next 2 – 5 years  Purpose statement: Declaration of a company’s purpose or reason for existing (mission or vision)  Brief, clear, inspirational, consistent, and enduring  Strategic objective: Specific goal derived from the purpose statement  Unifies company-wide efforts  Stretches and challenges the organization  Possesses a finish line and a time frame 9 Planning from Top to Bottom  Middle management  Responsible for developing and carrying out tactical plans to accomplish strategic objective  Tactical plans: Specify how the company will use resources, budgets, and people to accomplish specific goals  Time frame – 6 months to 2 years  Management by objectives: 4 step process used my managers and employees  Discuss goals  Collectively select goals  Jointly develop tactical plans  Meet regularly to review progress toward goal accomplishment 10 Planning from Top to Bottom  First-level managers  Responsible for developing and carrying out operational plans – day-to-day plans  Time Frame – 30 days to 6 months  Operational plans  Single-use plans: Cover unique, one-time-only events  Standing plans: Used repeatedly to handle frequently recurring events  Policies – what to do if “x” happens  Procedures – more specific than polices  Rules & Regulations – even more specific than procedures  Budgeting: Managers decide how to allocate available money to best accomplish company goals 11 Steps to Rational Decision Making 1. Define the problem  Problem: Gap between a desired state and an existing state  Managers must:  Be aware of a problem  Be motivated to solve the problem  Have the knowledge, skills, abilities, and resources to fix the problem 2. Identify decision criteria  Decision criteria: Standards used to guide judgments and decisions 12 Steps to Rational Decision Making 3. Weigh the criteria  Absolute comparisons: Each decision criterion is compared to a standard or ranked on its own merits  Relative comparisons: Each decision criterion is compared directly with every other criterion 13 Steps to Rational Decision Making 4. Generate alternative courses of action 5. Evaluate each alternative  Involves systematically evaluating each alternative against each criterion 6. Compute the optimal decision  Performed by multiplying the rating for each criterion by the weight for that criterion, and then summing the generated scores 14 Criteria Ratings Used to Determine the Best Location for a New Office Avoiding Pitfalls Using Groups to Improve Decision Making  Structured conflict - Right kind of conflict can lead to better group decision making  C-type (cognitive) conflict  Focuses on problem- and issue-related differences of opinion  Willingness to examine, compare, reconcile differences to produce the best possible solution  A-type (affective) conflict  Focuses on individuals or personal issues  Emotional reaction that can occur when disagreements become personal  Hostility, anger, resentment, distrust, cynicism, apathy 16 Creating C-Type Conflict  Dialectical Inquiry – propose solution (thesis), then generate an opposite proposal (antithesis)  Nominal Group Technique – Begins and ends by having group members write down and evaluate ideas  Shared with the group  Improves group decision making by decreasing a-type conflict  Delphi Technique  Don’t have to meet face-to-face  Members of a panel of experts respond to questions and to each other until reaching agreement on an issue  Brainstorming/Electronic brainstorming – all anonymous  Group members use computers to build on each others’ ideas  Generate as many alternative solutions as possible 17 Summary  Planning brings about increase in individual and organizational performance  Planning works best when the goals and action plans at the bottom and middle of the organization support the goals and action plans at the top of the organization  Decision making the process of choosing a solution from available alternatives 18