Planning and Decision making Flashcards
Identify the benefits and pitfalls of planning
Planning is choosing a goal and developing a method for achieving it. Planning is one of the best ways to
improve organizational and individual performance. It encourages people to work harder (intensified
effort), to work hard for extended periods (persistence), to engage in behaviors directly related to goal
accomplishment (directed behavior), and to think of better ways to do their jobs (task strategies).
However, planning also has three potential pitfalls. Companies that are overly committed to their plans
may be slow to adapt to environmental changes. Planning is based on assumptions about the future, and
when those assumptions are wrong, plans can fail. Finally, planning can fail when planners are detached
from the implementation of plans
How can an organisation make a plan work?
There are five steps to making a plan that works:
(1) Set S.M.A.R.T. goals—goals that are Specific,
Measurable, Attainable, Realistic, and Timely.
(2) Develop a commitment to the goals. Managers can
increase workers’ goal commitment by encouraging worker participation in goal setting, making goals public, and getting top management to show support for workers’ goals.
(3) Develop action plans for goal accomplishment.
(4) Track progress toward goal achievement by setting both proximal and distal goals and by providing workers with regular performance feedback.
(5) Maintain flexibility by keeping options open.
How companies can use plans at all management levels, from top to bottom.
Proper planning requires that the goals at the bottom and middle of the organization support the objectives
at the top of the organization. Top management develops strategic plans, which start with the creation of
an organizational vision and mission. Middle managers use techniques like management by objectives to
develop tactical plans that direct behavior, efforts, and priorities. Finally, lower-level managers develop
operational plans that guide daily activities in producing or delivering an organization’s products and
services. There are three kinds of operational plans: single-use plans, standing plans (policies, procedures,
and rules and regulations), and budgets.
What are the steps and limit that companie scan set to make ration decisions?
Rational decision-making is a six-step process in which managers define problems, evaluate alternatives,
and compute optimal solutions. The first step is identifying and defining the problem. Problems are gaps
between desired and existing states. Managers won’t begin the decision-making process unless they are aware of the gap, motivated to reduce it, and possess the necessary resources to fix it. Step 2 is defining the decision criteria used to judge alternatives. In Step 3, an absolute or relative comparison process is used to rate the importance of the decision criteria. Step 4 involves generating many alternative courses of action (i.e., solutions). Potential solutions are assessed in Step 5 by systematically gathering information
and evaluating each alternative against each criterion. In Step 6, criterion ratings and weights are used to
compute the optimal value for each alternative course of action. Rational managers then choose the
alternative with the highest optimal value. The rational decision-making model describes how decisions
should be made in an ideal world without limits. However, bounded rationality recognizes that in the real
world, managers’ limited resources, incomplete and imperfect information, and limited decision-making
capabilities restrict their decision-making processes.
How group decisions and group decision-making techniques can improve decision making.
When groups view problems from multiple perspectives, use more information, have a diversity of
knowledge and experience, and become committed to solutions they help choose, they can produce
better solutions than individual decision makers. However, group decisions can suffer from these
disadvantages: groupthink, slowness, discussions dominated by just a few individuals, and unfelt
responsibility for decisions. Group decisions work best when group members encourage c-type conflict.
However, group decisions don’t work as well when groups become mired in a-type conflict. The devil’s
advocacy and dialectical inquiry approaches improve group decisions because they bring structured ctype
conflict into the decision-making process.
By contrast, the nominal group technique and the Delphi technique both improve decisionmaking
by reducing a-type conflict. The stepladder technique improves group decision making by
adding group member’s independent contributionsto the discussion one by one. Finally, because it
overcomes the problems of production blocking and evaluation apprehension, electronic brainstorming
is more effective than face-to-face brainstorming.
Identify and describe the two primary method used to track progress of a company.
There are two accepted emthods of tracking progress. The first is set proximal goals and distal goals.
Proximal goals are short term goals and sub-goals, whereas distal goals are long-term or primary goals.
The secondary method of the tracking progress is to gather and provide performance feedback. regular, frequent performance feedback allows workers and managers to track their progress toward goal achievment and make adjustments in effor, direction, and srategies.
Define the types of plans used by top level managers
Top level managers are responsible for developing long-term strategic plans which detail the overall company plans that clarify how the company will serve the customers and position itself against competitors over the next two to five years.
A purpose statement, which is often reffered to as an organisational mission or vision is a statment of a company’s purpose or reason for existing.
The strategic objective, which often flows fromt he purpose, is a more specific goal that unifies company-wide efforts, streches and challenges the organisation, and prossesses a finsih line and a time frame.
Define the types of plans used by middle level managers
Middle level management is responsible for developing and carrying out tactical plans to accomplish the organization’s strategic objective.
Tactical plans are plans created and implemented by middle managers that specify how the company will use resources, budgets, and people over the next six months to two years to accomplish specific goals within its mission.
Management by objectives is a managment techniques often used to develop and carry out tactical plans. Managment by objective (MBO) is a four-step process in which managers and their employees.
- Discuss possible goals
- Collectively select goals that are challenging, attainable, and consistent with the company’s overall goals.
- Jointly develop tactical plans that lead to the accomplishment of tactical goals and objectives.
- Meet regularly to review progress towards accomplishment of those goals.
Define the types of plans used by bottom level managers
Lower-level managers are responsible for developing and carrying out operational plans, which are day-to-day plans for producing or delivering the organisationa’s products and services. operational plans direct the behavior, efforts, the priorities of operative employees for periods ranging from 30 days to six months. There are three kinds of operational plans:
- Single-use plans - unique plans that will typically only deal with one-time-events.
- Standing plans are plans that are used repeatedly for events that reoccury frequently. These exist in three main forms:
Policies - a standing plan that indicates the general course of action that should be taken in responce to a particular or situation.
Procedures - a standing plan that indicated the specific steps that should be taken in responce to a particular event.
Rules and Regulations - Atsanding plans that descirbe how a particular action should be performed, ro what must happen or not happen in responce to a particular event. - Budgeting - Quantitiive planning throuhgout which managers decide how to allocate available money to best accomplish company goals.
