Planning and Decision Making Process (Text Book Chapters – 7 & 8)

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1 Planning and Decision Making Process (Text Book Chapters – 7 & 8)
2 Planning and Decision Making Process (Text Book Chapters – 7 & 8)

2 Contents Planning: Nature, Process, Objectives and Strategies
Benefits and Pitfalls of Planning How to Make a Plan That Works? Decision Making

3 Planning means: Choosing a goal and developing a method of strategy to achieve that goal

4 How planning works? The organization’s Strategic goals Strategic plans
Tactical goals Operational goals Operational plans The organization’s • Purpose Mission Values Directions Tactical plans

5 Why Do Managers Plan? ► To provide direction ► To reduce uncertainty
► To Minimize waste ► To Set the standards for controlling

6 Benefits of Planning Benefits of Planning Creation of Task Strategies
Intensified Effort Direction Persistence

7 Pitfalls Pitfalls of Planning Detachment of Planners
Impedes Change and Adaptation False Sense of Certainty

8 Revise existing plan or Begin new planning process
How to Make a Plan that Works Set Goals Develop Commitment Develop Effective Action Plans Track Progress Toward Goal Achievement Maintain Flexibility Revise existing plan or Begin new planning process

9 Setting Goals S.M.A.R.T. Measurable Attainable Realistic Timely
Specific Measurable Attainable Realistic Timely

10 Goals - Tracking Progress
Set… Gather and provide… Performance Feedback Proximal Goals Distal Goals

11 Planning from Top to Bottom

12 Planning Time Lines Plans Years 1 2 3 4 5 6 Strategic Tactical
1 2 3 4 5 6 Plans Strategic Tactical Operational 5 Years 2 years 30 days 6 months 2 Years

13 Planning Outputs Total cost of a plan Projected levels of: Inventory
Employment Subcontracting Backordering

14 Planning Strategies Proactive Reactive Mixed
Alter demand to match capacity Reactive Alter capacity to match demand Mixed Some of each

15 Tools – Planning Strategies
Porter’s Five Forces Model SWOT Analysis BCG Matrix

16 Porter’s Five Forces Model

17 SWOT Analysis

18 BCG Matrix

19 Decision Making

20 What Is Decision Making?
Decision Making Means: The process of choosing a solution from available alternatives.

21 What Is Rational Decision Making?
A systematic process of defining problems, evaluating alternatives, and choosing optimal solutions.

22 Steps to Rational Decision Making
Define the problem Identify decision criteria Weight the criteria Generate alternative courses of action Evaluate each alternative Compute the optimal decision 1 2 3 4 5 6

23 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

24 Nominal Group Technique
Using Groups to Improve Decision Making Delphi Technique Stepladder Technique Brainstorming Structured Conflict Nominal Group Technique

25 Structured Conflict C-Type Conflict A-Type Conflict
Cognitive conflict. Disagreement that focuses on problem and issue-related differences of opinion A-Type Conflict Affective conflict. Disagreement that focuses on individuals or personal issues

26 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 the highest average rank is selected

27 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.

28 Stepladder Technique Step 3 Step 2 Step 1 Member 1
Shares thoughts, ideas, recommendations Member 2 Discussion is Held and Tentative Group Decision is Made Member 3 Joins Group Shares thoughts, ideas, recommendations Members 1 & 2 Share previous thoughts, ideas, recommendations Member 4 Joins Group Shares thoughts, ideas, recommendations Members 1, 2, & 3 Share previous thoughts, ideas, recommendations Adapted From Exhibit 5.13 Step 1 Step 2 Step 3

29 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 used to come up with even more ideas. Criticism or evaluation of ideas is not allowed.

30 Thank You