Planning and Decision Making Week 5

Definition

defining the organisation's objectives and goals

establishing an overall strategy for achieving those goals

Developing plans to integrate and coordinate activities

Two Types

Formal

Informal

Why Plan?

provides direction

reduces uncertainty

minimises waste and redundancy

establishes goals and standards used for controlling

Elements of planning

Goals

Plans

Types of plans

breadth

time frame

specificity

frequency of use

Steps

Review the mission

Evaluate available resources

Determine goals

Write down and communicate goals

Review results - if goals are being met

Establishing goals

Traditional goal setting

goals set at top level then broken down into subgroups for each level

means to an end chain

Management by objectives (MBO)

mutually agreed upon goals

used to evaluate employee performance

four elements to MBO programs

goal specificity

participative decision making

explicit time frame

performance feedback

Characteristics of well-defined goals

Written in terms of outcomes rather than actions

measurable and quantifiable

clear as to a time frame

challenging yet attainable

written down

communicated to all necessary organisational members

Developing plans

contingency factors

level in the organisation

degree of environmental uncertainty

length of future commitment

higher level

lower level

strategic

operational

high uncertainty - specific plans but flexible

plans should meet promised commitments

Criticisms

Planning may create rigidity

plans cannot be developed for dynamic environments

formal plans cannot replace intuition and creativity

planning focuses managers' attention on today's competition not tomorrow's survival

formal planning reinforces today's success which may lead to tomorrow's failure

just planning is not sufficent

Decision making

Steps

the process of choosing between two or more alternatives

  1. Identification of a problem

Issues

Over-confidence

self-serving

click to edit

Decisions

Bounded Rationality

Intuition

Rationality