Planning
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Planning Choosing a goal and developing a method of strategy to achieve that goal. Planning. 1. What Is Planning?. Planning A primary functional managerial activity that involves: Defining the organization’s goals Establishing an overall strategy for achieving those goals

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Planning

Planning

Choosing a goal and developing amethod of strategy to achieve that goal

Planning

1


What is planning

What Is Planning?

  • Planning

    • A primary functional managerial activity that involves:

      • Defining the organization’s goals

      • Establishing an overall strategy for achieving those goals

      • Developing a comprehensive set of plans to integrate and coordinate organizational work.

    • Types of planning

      • Informal: not written down, short-term focus; specific to an organizational unit.

      • Formal: written, specific, and long-term focus, involves shared goals for the organization.


Why do managers plan

Why Do Managers Plan?

  • Purposes of Planning

    • Provides direction

    • Reduces uncertainty

    • Minimizes waste and redundancy

    • Sets the standards for controlling


Benefits of planning

Benefits of Planning

Persistence

Direction

IntensifiedEffort

Creationof Task

Strategies

Benefits of Planning

1.1


Pitfalls of planning

Pitfalls of Planning

False Senseof Certainty

Impedes Changeand Adaptation

Detachmentof Planners

Pitfalls of Planning

1.2


How to make a plan that works

Set Goals

DevelopCommitment

DevelopEffective

Action

Plans

TrackProgress

Toward

Goal

Achievement

MaintainFlexibility

Revise existing planorBegin new planning process

How to Make a Plan That Works

2


Setting goals

Specific

S.M.A.R.T.

  • Measurable

  • Attainable

  • Realistic

  • Timely

Setting Goals

2.1


Developing commitment to goals

Developing Commitment to Goals

The determination to achieve a goal is increased by:

  • Setting goals participatively

  • Making goals reasonable

  • Making goals public

  • Obtaining top management support

2.2


Developing effective action plans

Specific Steps

People

Resources

Time Period

Developing Effective Action Plans

An Action Plan Lists…

2.3


Tracking progress

Tracking Progress

Set…

Gather and provide…

Performance Feedback

Proximal Goals

Distal Goals

2.4


Maintaining flexibility

Maintaining Flexibility

Option-based planning

  • keep options open by making simultaneous investments

    • invest more in promising options

    • maintains slack resources

      Learning-based planning

  • plans need to be continuously adjusted

2.5


Planning from top to bottom

Planning from Top to Bottom

3

Adapted from Exhibit 5.5


Starting at the top

Strategic Plans

Clarify how the company will serve customers and position itself against competitors (2-5 years)

Vision

An inspirational statement of anorganization’s purpose (2 sentences)

Mission

Overall goal that unifies efforts towardits vision, stretches and challenges,and possesses a finish line andtime frame. Flows from vision.

Starting at the Top

3.1


Planning time lines

5 Years

2 Years

Strategic

6 months

2 years

Plans

Tactical

30 days

Operational

6 months

0

1

2

3

4

5

6

Years

Planning Time Lines

3.1


Bending in the middle

Bending in the Middle

Tactical Plans

Specify how a company will use resources, budgets, and people toaccomplish goals within its mission. (6 months to 2 years)

ManagementbyObjectives

Develop and carry out tactical plans

  • Discuss possible goals

  • Participatively select goals consistent with overall goals

  • Jointly develop tactical plans

  • Meet to review progress

3.2


Finishing at the bottom

Finishing at the Bottom

Operational Plans

Day-to-day plans for producing or delivering products and services overa 30-day to six-month period

3.3


Kinds of operational plans

Single-Use Plans

Plans that cover unique, one-time-only events

Standing Plans

Plans used repeatedly to handle frequently recurring events.

Three kinds are: policies, procedures,and rules and regulations.

Budgets

Quantitative planning to decide how to allocate money to accomplish company goals

Kinds of Operational Plans

3.3


What is rational decision making

Decision Making

The process of choosing a solution fromavailable alternatives.

Rational Decision Making

A systematic process of defining problems, evaluating alternatives, and choosing optimal solutions.

What Is Rational Decision Making?

4


Steps to rational decision making

Define the problem

1

Identify decision criteria

2

Weight the criteria

3

Generate alternative courses of action

4

Evaluate each alternative

5

Compute the optimal decision

6

Steps to Rational Decision Making

4


Steps to rational decision making1

Steps to Rational Decision Making

1

Define the problem

  • Problem exists when there is a gap between a desired state and an existing state

  • To make decisions about problems, managers must:

    • be aware of the gap

    • be motivated to reduce the gap

    • have the knowledge, skills, abilities, and resources to fix the problem

4.1


Steps to rational decision making2

Steps to Rational Decision Making

2

Identify decision criteria

  • Standards used to guide judgments and decisions

  • The more criteria a potential solution meets, the better that solution should be

4.2


Steps to rational decision making3

Steps to Rational Decision Making

3

Weight the criteria

  • Absolute comparisons

    • each criterion is compared to a standard or ranked on its own merits

  • Relative comparisons

    • each criterion is compared directly to every other criterion

4.3


Steps to rational decision making4

Steps to Rational Decision Making

Absolute Weighting of Decision Criteria

4.3


Steps to rational decision making5

Steps to Rational Decision Making

Relative Weighting of Decision Criteria

4.3


Steps to rational decision making6

Steps to Rational Decision Making

4

Generate alternative courses of action

  • The idea is to generate as many alternatives as possible

4.4


Steps to rational decision making7

Steps to Rational Decision Making

5

Evaluate each alternative

  • This step can take much longer and be more expensive than other steps in the process

4.5


Steps to rational decision making8

Steps to Rational Decision Making

6

Compute the optimal decision

  • Multiply the rating for each criterion by the weight for that criterion

  • Sum the scores for each alternative course of action

4.6


Plus a process for ethical decision making

P

Policies

L

Legal

U

Universal

S

Self

PLUS—A Process for Ethical Decision Making

DOING THE RIGHT THING

4


Limits to rational decision making

  • Bounded Rationality

  • A decision-making process restricted in the real world by:

  • limited resources

  • incomplete and imperfect information

  • managers’ limited decision-making capabilities

Limits to Rational Decision Making

4.7


Limits to rational decision making1

Maximize

Satisfice

Limits to Rational Decision Making

4.7


Using groups to improve decision making

StructuredConflict

NominalGroupTechnique

DelphiTechnique

StepladderTechnique

ElectronicBrainstorming

Using Groups to Improve Decision Making

5


Group decision making

Group Decision Making

Advantages

  • View problems from multiple perspectives

  • Find and access more information

  • Generate more alternative solutions

  • More committed to making chosen solutions work

5.1


Group decision making1

Disadvantages

  • Susceptible to groupthink and to considering a limited number of solutions

  • Takes considerable time

  • One or two people can dominate group discussion

  • Members don’t feel personally accountable for decisions and actions

Group Decision Making

5.1


Groupthink

Groupthink is likely to occur when…

  • The group is insulated from others with different perspectives

  • The group leader expresses a strong preference for a particular decision

  • There is no established procedure for defining problems and exploring alternatives

  • Group members have similar backgrounds

Groupthink

5.1


Structured conflict

Structured Conflict

C-Type Conflict

Cognitive conflict. Disagreement that focuses onproblem- and issue-related differences of opinion

A-Type Conflict

Affective conflict.

Disagreement that focuses onindividuals or personal issues

5.2


Devil s advocacy

Steps to Establish a Devil’s Advocacy Program

  • Generate a potential solution

  • Assign a devil’s advocate to criticize and question

  • Present the critique of the solution to key decision makers

  • Gather additional information

  • Decide whether to use, change, or not usethe originally proposed solution

Devil’s Advocacy

5.2


Dialectical inquiry

Steps to Establish a Dialectical Inquiry Process

  • Generate a potential solution

  • Identify the assumptions underlying thepotential solution

  • Generate a conflicting counterproposal basedon opposite assumptions

  • Have advocates of each position present theirarguments and engage in a debate in front ofdecision makers

  • Decide whether to use, change, or not usethe originally proposed solution

Dialectical Inquiry

5.2


Nominal group technique

Steps to Establish Nominal Group Technique

  • During a “quiet time,” group members write down as many problems and solutions as possible

  • Each member shares one idea at a time

  • Ideas are posted on flipcharts until all ideas are shared

  • Group discusses advantages/disadvantages

  • Ideas are ranked during a second “quiet time”

  • Members read rankings aloud, and the idea with thehighest average rank is selected

Nominal Group Technique

5.3


Delphi technique

Steps to Establish Delphi Technique

  • Assemble a panel of experts.

  • Create a questionnaire of open-ended questions.

  • Summarize the responses and feed back to the panel until the members reach agreement.

  • Create a brief report and send to the panel members for agreement/disagreement.

  • Continue the feedback process until panel reaches agreement.

Delphi Technique

5.4


Stepladder technique

Member 4 JoinsGroup Shares thoughts, ideas, recommendations

Members 1, 2, & 3 Share previous thoughts, ideas, recommendations

Discussion is Held and Tentative Group Decision is Made

Step 3

Member 3 JoinsGroup Shares thoughts, ideas, recommendations

Members 1 & 2

Share previous thoughts, ideas, recommendations

Discussion is Held and Tentative Group Decision is Made

Step 2

Member 1

Shares thoughts, ideas, recommendations

Member 2

Shares thoughts, ideas, recommendations

Discussion is Held and Tentative Group Decision is Made

Step 1

Adapted From Exhibit 5.13

Stepladder Technique

5.5


Electronic brainstorming

Four Rules of Brainstorming

  • The more ideas, the better.

  • All ideas are acceptable, no matter how wild or crazy.

  • Other group members’ ideas should be usedto come up with even more ideas.

  • Criticism or evaluation of ideas is not allowed.

Electronic Brainstorming

5.6


Electronic brainstorming1

Advantages of Electronic Brainstorming

Electronic Brainstorming

  • Overcomes production blocking

    • technology allows everyone to record their ideas as they are created

    • no ideas lost “waiting your turn” to speak

  • Overcomes evaluation apprehension

    • anonymity creates free expression

5.6


Electronic brainstorming2

Disadvantages of Electronic Brainstorming

Electronic Brainstorming

  • Greater expense

  • No automatic acceptance of ideas because of one’s position

  • Some find it difficult to express themselves in writing

  • Lack of typing skills can frustrate participants

5.6


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