Planning and Decision Making Flashcards
Define Planning
Planning is identifying a goal and deciphering a method to achieve it.
What are the Benefits of Planning
Intensifies effort
Encourages Persistence, meaning working harder for long period.
Directs Behaviour, plans encourage managers and employees to direct their persistent efforts towards activities that help accomplish their goals and away from activities that don’t.
Helps Focus on Task Strategies
What are the Drawbacks of Planning?
It may prevent change to due to the strict nature and need to adhere to plans. Therefore they fail to see that their plans aren’t working and that their goals need to change.
May fail if there are incorrect assumptions that are made throughout planning, this then creates a false sense of certainty .
Poorly implemented if the planners are detached from the implementation of plans.
Timely and costly
Explain the step of planning: Setting SMART goals
Setting S.M.A.R.T goals, theses are goals that are specific, measurable, attainable/achievable, realistic and timely. To direct behaviour and increase effort, goals need to be specific and challenging. This creates a standard for which success can be measured.
Explain the step of planning: Committing to goals
Committing to goals through encouraging participation in goal setting, making goals public and management showing support for workers goals. Goal commitment can be defined as determination to achieve a goal. An approach to attempt to achieve goal commitment is to set goals collectively, therefore employees may be more motivated to achieve.
Explain the step of planning: Action Plans
Action plans to accomplish goals. An action plan lists the specific steps, people, resources and time period for accomplishing a goal.
Explain the step of planning: Tracking Progress
Tracking progress toward goal achievement by providing workers with regular performance feedback. There are two processes for which a goal can be tracked. The first is to set proximal goals and distal goals. Proximal goals are short-term or sub-goals. Whereas distal goals are long-term or primary goals. The second method is to gather and provide performance feedback. This allows for adjustment as well as assurance.
Explain the step of planning: Flexibility
Keeping options open, ensuring flexibility. A method of obtaining flexibility is to instil options-based planning. This method is to keep options open by making small investments in many plans. Then when the successful plans emerge, a larger investment is made with the less successful plans being discounted.
How can plans be effective regarding the levels of management
The plans made at a certain level of an organisation should be supported by all levels of management.
For goals to be effective the plans made at all levels of management should be in alignment and support each other. Further there are different plans for which each level of management creates.
What should top management do to make plans more effective?
Top management should aim to create strategic plans. These should establish an organisation vision and mission. Top management plans should clarify how the company is going to serve customers and overcome competitors. Top management are also required to create a vision. A vision is a statement of a company’s purpose or reason for existing. A vision should be widely consistent with a companies beliefs and values. The from the vision, a mission will surface. The mission will be a more specific goal that rings together effort of the company, stretches and challenges an organisation. Often a mission will possess a finish line and a time frame.
What should middle management do to make plans more effective?
Middle managers address tactical plans, those involving directing behaviour, effort and priorities. Tactical plans tend to plan for the next six months to two years.
Explain Management by Objectives
Management by objectives (MBO) is a four step process for which managers and employees which includes:
○ Talking about potential goals
○ Select goals that are challenging attainable and consistent with the company’s overall goals
○ Developing tactical plans jointly that lead to fulfilling goals and objectives
○ Meeting on a regular basis to review progress
What should lower management do to make plans more effective?
Lower-level managers create operational plans and these guide daily activities. These plans range from period of thirty days to six months.
Explain single use operational plans
Single Use Plans: These are plans that deal with one time only events.
Explain standing operational plans
Standing Plans (policies, procedures, and rules and regulations): Used on a regular basis to manage frequent events. Standing plans are said to be time saving for managers. A procedure is a standing plan that indicates the specific steps taken in response to a particular event. Rules and regulations are standing plans that described how a particular action should be performed, in response to a particular event. A policy is a standing plan that indicates the general course of action in response to a particular event/situation.
Explain budget operational plans
○ Budgets: A qualitative plan for which managers decide how to allocate available money to best accomplish company goals.
What are the six steps in the rational decision making process?
Identify and define the problem Define the decision making criteria Weigh the Importance Generate Alternate Course of Action Evaluate Compute Optimal Value
Explain the Identify Process of the rational decision making process
Identify and define the problem: A problem is said to exist when there is a difference between what is wanted and the situation that is actually being faced. For a problem to be solved, managers need to first be aware of the problem and want to solve it. Further once aware of the problem managers must be able to fix it with the skills and resources that they have.
Explain the define the decision criteria to judge alternatives of the rational decision making process
Decision criteria is the standards that are used to guide judgements and decisions.
Explain the weight the importance of each decision criteria of the rational decision making process
The decision maker is always required to provide an initial ranking. To estimate the comparison absolute comparisons are often used. Absolute comparisons is a process in which each decision criteria is compared to a standard or ranked against its own merits. Another method used is relative comparisons, a process in which each decision criterion is compared directly to every other criterion.
Explain the generate alternative courses of action of the rational decision making process
The objective at this step is to generate as many alternatives as possible
Explain the evaluate of the rational decision making process
Evaluate each alternative against each criteria
Explain the compute the optimal value for each alternative course of action of the rational decision making process
Computing this decision involves multiplying the weight for each criterion (step 3) by the rating for each criterion (step 5) and then adding up those scores for each alternative course of action that was generated (step 4). Often managers instead of maximising and choosing the best alternative, they will satisfy and choose alternative that is ‘good enough’.
Explain bounded rationality
Bounded Rationality acknowledges the limitations of rational decision making.
Availability of resources
Incomplete and imperfect information
Decision making capabilities.
