CH05

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CH05

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  1. Chapter 5Planning and Decision Making

    Slide 1 - Chapter 5Planning and Decision Making

    • © 2015 Cengage Learning
    • MGMT7
  2. © 2015 Cengage Learning

    Slide 2 - © 2015 Cengage Learning

    • 5-1 discuss the benefits and pitfalls of planning
    • 5-2 describe how to make a plan that works
    • 5-3 discuss how companies can use plans at all management levels, from top to bottom
    • 5-4 explain the steps and limits to rational decision making
    • 5-5 explain how group decisions and group decision-making techniques can improve decision making
  3. Benefits of Planning

    Slide 3 - Benefits of Planning

    • Intensified effort
    • Persistence
    • Direction
    • Creation of task strategies
    • © 2015 Cengage Learning
    • 5-1
  4. Pitfalls of Planning

    Slide 4 - Pitfalls of Planning

    • Impedes change and prevents or slows adaptation
    • Creates a false sense of certainty
    • Detachment of planners
    • © 2015 Cengage Learning
    • 5-1
  5. How to Make a Plan That Works

    Slide 5 - How to Make a Plan That Works

    • © 2015 Cengage Learning
    • 5-2
  6. Setting Goals

    Slide 6 - Setting Goals

    • S.M.A.R.T. Goals
    • Specific
    • Measurable
    • Attainable
    • Realistic
    • Timely
    • © 2015 Cengage Learning
    • 5-2
  7. Developing Commitment to Goals

    Slide 7 - Developing Commitment to Goals

    • Goal commitment
    • the determination to achieve a goal
    • Set goals collectively
    • Make the goal public
    • Obtain top management’s support
    • © 2015 Cengage Learning
    • 5-2
  8. Developing Effective Action Plans

    Slide 8 - Developing Effective Action Plans

    • An action plan lists…
    • Specific steps (how)
    • People (who)
    • Resources (what)
    • Time period (when)
    • …for accomplishing a goal
    • © 2015 Cengage Learning
    • 5-2
  9. Tracking Progress

    Slide 9 - Tracking Progress

    • Proximal goals and distal goals
    • Performance feedback
    • © 2015 Cengage Learning
    • 5-2
  10. Effects of Goal Setting, Training, and Feedback on Safe Behavior in a Bread Factory

    Slide 10 - Effects of Goal Setting, Training, and Feedback on Safe Behavior in a Bread Factory

    • 5-2
    • © 2014 Cengage Learning
    • © 2015 Cengage Learning
  11. Maintaining Flexibility

    Slide 11 - Maintaining Flexibility

    • Options-based planning
    • keep options open by making, small simultaneous investments in many alternative plans.
    • Slack resources
    • a cushion of resources, like extra time or money, that can be used to address and adapt to unanticipated changes.
    • © 2015 Cengage Learning
    • 5-2
  12. Planning from Top to Bottom

    Slide 12 - Planning from Top to Bottom

    • 5-3
    • © 2015 Cengage Learning
  13. Starting at the Top

    Slide 13 - Starting at the Top

    • Strategic plans
    • make clear how the company will serve customers and position itself against competitors in the next 2 to 5 years
    • Purpose statement
    • a statement of a company’s purpose or reason for existing
    • Strategic objective
    • a more specific goal that unifies company-wide efforts, stretches and challenges the organization, and possess a finish line and a time frame.
    • © 2015 Cengage Learning
    • 5-3
  14. Bending in the Middle

    Slide 14 - Bending in the Middle

    • Tactical plans
    • specify how a company will use resources, budgets, and people to accomplish specific goals related to its strategic objective
    • time frame: 6 months to 2 years
    • Management by Objectives (MBO)
    • discuss possible goals
    • collectively set goals
    • jointly develop tactical plans
    • meet regularly to review progress
    • © 2015 Cengage Learning
    • 5-3
  15. Finishing at the Bottom

    Slide 15 - Finishing at the Bottom

    • Operational plans
    • Single-use plans
    • Standing plans
    • policies
    • procedures
    • rules and regulations
    • Budgets
    • © 2015 Cengage Learning
    • 5-3
  16. Steps to Rational Decision Making

    Slide 16 - 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
    • © 2015 Cengage Learning
    • 5-4
  17. Define the Problem

    Slide 17 - Define the Problem

    • Existing state
    • Desired state
    • PROBLEM
    • 5-4
    • © 2015 Cengage Learning
  18. Identify Decision Criteria

    Slide 18 - Identify Decision Criteria

    • The standards used to guide judgments and decisions.
    • © 2015 Cengage Learning
    • 5-4
  19. Weight the Criteria

    Slide 19 - Weight the Criteria

    • Absolute comparisons
    • Relative comparisons
    • © 2015 Cengage Learning
    • 5-4
  20. Absolute Weighting of Decision Criteria for a Car Purchase

    Slide 20 - Absolute Weighting of Decision Criteria for a Car Purchase

    • 5-4
    • © 2015 Cengage Learning
  21. Relative Comparison of Home Characteristics

    Slide 21 - Relative Comparison of Home Characteristics

    • 5-4
    • © 2015 Cengage Learning
  22. Generate Alternative Courses of Action

    Slide 22 - Generate Alternative Courses of Action

    • After identifying and weighting the criteria that will guide the decision-making process, the next step is to identify possible courses of action that could solve the problem.
    • © 2015 Cengage Learning
    • 5-4
  23. Evaluate Each Alternative

    Slide 23 - Evaluate Each Alternative

    • The next step is to systematically evaluate each alternative against each criterion.
    • The key is to use information to systematically evaluate each alternative against each criterion.
    • © 2015 Cengage Learning
    • 5-4
  24. Criteria Ratings Used to Determine the Best Location for a New Office

    Slide 24 - Criteria Ratings Used to Determine the Best Location for a New Office

    • 5-4
    • © 2015 Cengage Learning
  25. Compute the Optimal Decision

    Slide 25 - Compute the Optimal Decision

    • (rating for criterion A) x (weight for criterion A)
    • +
    • (rating for criterion B) x (weight for criterion B)
    • +
    • (rating for criterion C) x (weight for criterion C)
    • etc.
    • © 2015 Cengage Learning
    • 5-4
  26. Limits to Rational Decision Making

    Slide 26 - Limits to Rational Decision Making

    • In theory, fully rational decision makers maximize decision by choosing the optimal solution.
    • In practice, limited resources make it nearly impossible to maximize decisions.
    • © 2015 Cengage Learning
    • 5-4
  27. Advantages of Group Decision Making

    Slide 27 - Advantages of Group Decision Making

    • Groups do a better job than individuals at
    • Defining the problem
    • Generating alternative solutions
    • © 2015 Cengage Learning
    • 5-5
  28. Pitfalls of Group Decision Making

    Slide 28 - Pitfalls of Group Decision Making

    • Groupthink
    • Takes considerable time
    • Strong willed members
    • © 2015 Cengage Learning
    • 5-5
  29. Structured Conflict

    Slide 29 - Structured Conflict

    • 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
    • emotional reaction that can occur when disagreements become personal
    • hostility, anger, resentment, distrust, cynicism, apathy
    • © 2015 Cengage Learning
    • 5-5
  30. Creating C-Type Conflict

    Slide 30 - Creating C-Type Conflict

    • Devil’s advocacy
    • Nominal Group Technique
    • Delphi Technique
    • Brainstorming/Electronic brainstorming
    • © 2015 Cengage Learning
    • 5-5
  31. Plant Fantasies

    Slide 31 - Plant Fantasies

    • 1. Did Plant Fantasies owner Teresa Carleo follow the rational decision-making process to launch Plant Fantasies? Explain.
    • 2. List an example of a programmed decision at Plant Fantasies. Identify a nonprogrammed decision at Plant Fantasies.
    • © 2015 Cengage Learning
  32. Plant Fantasies

    Slide 32 - Plant Fantasies

    • © 2015 Cengage Learning