Planning and decision making (management)
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Planning is a primary managerial activity that involves defining goals, establishing strategies, and developing plans. There are different levels and types of planning including strategic, operating, tactical, and unit plans. The benefits of planning include providing direction, allocating resources, determining budgets, assigning roles and responsibilities, and enabling better control. The strategic planning process involves analyzing the internal and external environment, formulating strategies, developing action plans, implementation, and review. Mission, vision, values and goals set the context for planning by describing the organization's purpose and desired future state.
Planning and decision making (management)
- 1. chapter 5 Planning and Decision Making McGraw-Hill/Irwin Principles of Management
- 2. 5 - 2 What Is Planning? • Planning - a primary managerial activity that involves: - Defining the organization’s goals - Establishing an overall strategy for achieving those goals - Developing plans for organizational work activities
- 3. 5 - 3 Step in Planning • Choose goals • Identify actions • Allocate responsibility • Review Performance • Make adjustments
- 4. 5 - 4 Unit plans (heads of departments, teams, individuals Levels of Planning Operating plans (heads of functions) Business-level strategic plan (heads of businesses) Shapedbyinput Setsthecontextfor Corporate-level Strategic plan (CEO)
- 5. 5 - 5 Formal Planning • Formal planning - Specific goals covering a specific time period - Written and shared with organizational members • Informal planning
- 6. 5 - 6 The Benefits of Planning • Planning gives direction and purpose to an organization; it is a mechanism for deciding the goals of the organization. • Planning is the process by which management allocates scarce resources, including capital and people, to different activities. • Planning drives operating budgets-strategic, operations, and unit plans determine financial budgets for the coming year. • Planning assigns roles and responsibilities to individuals and units within the organization. • Planning enables managers to better control the organization.
- 7. 5 - 7 Elements of Planning • Goals (also Objectives) - Desired outcomes for individuals, groups, or entire organizations - Provide direction and evaluation performance criteria • Plans - Documents that outline how goals are to be accomplished - Describe how resources are to be allocated and establish activity schedules
- 8. 5 - 8 Types of Plans • Strategic plans: A plan that outlines the major goals of an organization and the organizationwide strategies of attaining those goals. • Operating plans: Plans that specify goals, actions, and responsibility for individual functions. • Tactical plans: The action managers adopt over the short to medium term to deal with a specific opportunity or threat that has emerged. • Unit plans: Plans for departments within functions, work teams, or individuals.
- 9. 5 - 9 Types of Plans • Single-use plans: Plans that address unique events that do not reoccur. • Standing plans: Plans used to handle events that reoccur frequently. • Contingency plans: Plans formulated to address specific possible future events that might have a significant impact on the organization. • Crisis management planning: Plan formulated specifically to deal with possible future crises. • Scenario planning: Plans that are based on “what if” scenarios about the future.
- 10. 5 - 10 The Strategic Planning Process Feedback Mission, vision, values, and goals SWOT analysis formulate strategies Draft action plans Implement Review progress against plan External analysis (opportunities and threats) Internal analysis (strengths and weaknesses) Assign subgoals, roles, responsibilities, timelines, and budgets
- 11. 5 - 11 Setting the Context: Mission, Vision, Values, and Goals •Vision: A desired future state. • Mission: The purpose of an organization. • Values: The philosophical properties to which managers are committed. • Goals: A desired future state that an organization attempts to utilize.
- 12. 5 - 12 Question • In describing the purpose of the organization, _____ should be _______-oriented. a. mission; customer b. vision; product c. values; product d. goals; customer
- 13. 5 - 13 Decision Making • Decision - making a choice from two or more alternatives. • Problem - an obstacle that makes it difficult to achieve a desired goal or purpose.
- 14. 5 - 14 The Rational Decision-Making Model Identify the problem Identify decision criteria Weight criteria Generate alternative courses of action Choose one alternative Implement alternative Continue with course of action Evaluate outcome Does not meet expectations Meets expectations
- 15. 5 - 15 Decision-Making Process
- 16. 5 - 16 Important Decision Criteria
- 17. 5 - 17 Possible Alternatives
- 18. 5 - 18 Evaluation of Alternatives
- 19. 5 - 19 Bounded Rationality and Satisficing • Bounded rationality: Limits in human ability to formulate complex problems, to gather and process the information necessary for solving those problems, and thus to solve those problems in a rational way. • Satisfice: Aiming for a satisfactory level of a particular performance variable rather than its theoretical maximum.
Editor's Notes
- #11: Learning Objective 4: Describe the main components of a typical strategic planning system. See Text Page: 113
- #12: Learning Objective 4: Describe the main components of a typical strategic planning system. See Text Pages: 113-115
- #13: Learning Objective 4: Describe the main components of a typical strategic planning system. Answer: A
- #15: Learning Objective 6: Discuss the major reasons for poor decisions, and describe what managers can do to make better decisions. See Text Page: 122
- #20: Learning Objective 6: Discuss the major reasons for poor decisions, and describe what managers can do to make better decisions. See Text Page: 122