DECISIONS, PLANNING, AND STRATEGIES

planning: what and why?

what: planning involves defining the organization's goals, establishing strategies for achieving those goals, and developing plans to integrate and coordinate work activities

why

planning provides direction

planning reduces uncertainty

planning minimized waste and redundancy

planning establishes goals/standards used in controlling

goals and plans

goals

plans

financial goals

strategic goals

stated goals

real goals

breadth (strategic vs operational)

time frame (short vs long term)

specificity (directional vs specific)

frequency of use (single vs standing)

setting goals and developing plans

approaches to setting goals

steps in setting goals

traditional goal setting

management by objectives

  1. review organization's mission/purpose
  1. evaluate available resources
  1. determine goals individually/with input from others
  1. write down goals and communicate them
  1. review results and see whether goals are being met

developing plans is influenced by

organizational level: lower-lever managers do operational planning, upper-level managers do strategic planning

degree of environmental uncertainty

lengths of future commitments: plans should extend far enough to meet commitments made when the plans were developed

contemporary issues in planning

develop specific but flexible plans

recognize that planning is an ongoing process

stay alert to environmental changes and respond as needed

make organizational hierarchy flatter

analyze external environment by environmental scanning

the decision-making process

  1. identify the problem
  1. identify the decision criteria
  1. allocate weights to criteria
  1. develop alternatives
  1. analyze alternatives
  1. choose best alternative
  1. implement decision
  1. evaluate decision effectiveness

managers making decisions

role of intuition: managers make decisions based on experience, feelings, and accumulated judgement

rationality: we assume managers are rational decision makers

bounded rationality: managers are bounded by their ability to analyze information on all alternatives

role of evidence-based management: the use of the best available evidence to improve management practice

strategic management

strategies: plans for how the organization will do whatever it's in business to do, how it will compete successfully, how it will attract customers to achieve its goals

why is it important?

make a difference in how well an organization performs

managers face continually changing situations

organizations are complex and diverse

strategic management process

  1. identify organization's mission, goals, and strategies
  1. do external analysis
  1. do internal analysis
  1. formulate strategies
  1. implement strategies
  1. evaluate results

corporate strategies

determines what a business/company is in or wants to be in, and what it wants to do with those business

main types

growth: expands number of markets served or products offered

stability: continues to do what it's doing

renewal: develop strategies that address declining performance