This is a 5-6 pages eassy about management called Interview Experience and Synthesis Paper.

Planning and Decision Making

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LEARNING OUTCOMES

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1 Discuss the benefits and pitfalls of planning 2 Describe how to make a plan that works 3 Discuss how companies can use plans at all

management levels, from top to bottom 4 Explain the steps and limits to rational decision

making 5 Explain how group decisions and group

decision-making techniques can improve decision making

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Benefits and Pitfalls of Planning

• Benefits • Employees put forth

greater effort when following a plan

• Leads to persistence • Provides direction • Encourages the

development of task strategies

• Works for companies and individuals

• Pitfalls • Impedes change and

prevents needed adaptation

• Creates a false sense of certainty

• Detachment of planners

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Exhibit 5.1 How to Make a Plan That Works

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Planning from Top to Bottom

• Top management • Responsible for developing long term strategic

plans • Purpose statement: Declaration of a

company’s purpose or reason for existing • Strategic objective: Specific goal

• Unifies company-wide efforts • Stretches and challenges the organization • Possesses a finish line and a time frame

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Planning from Top to Bottom

• Middle management • Responsible for developing and carrying out

tactical plans to accomplish strategic objective • Tactical plans: Specify how the company will

use resources, budgets, and people to accomplish specific goals

• Management by objectives: Managers and employees discuss and select goals • Develop tactical plans, and meet regularly to review

progress toward goal accomplishment

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Planning from Top to Bottom

• First-level managers • Responsible for developing and carrying out

operational plans • Single-use plans: Cover unique, one time-only

events • Standing plans: Used repeatedly to handle

frequently recurring events • Budgeting: Managers decide how to allocate

available money to best accomplish company goals

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Steps to Rational Decision Making

• Define the problem • Problem: Gap between a desired state and an

existing state • Identify decision criteria

• Decision criteria: Standards used to guide judgments and decisions

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Steps to Rational Decision Making

• Weigh the criteria • Absolute comparisons: Each decision criterion is

compared to a standard or ranked on its own merits

• Relative comparisons: Each decision criterion is compared directly with every other criterion

• Generate alternative courses of action

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Steps to Rational Decision Making

• Evaluate each alternative • Involves systematically evaluating each

alternative against each criterion • Compute the optimal decision

• Performed by multiplying the rating for each criterion by the weight for that criterion, and then summing the generated scores

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Limits to Rational Decision Making

• Managers have to operate in a perfect world with no real-world constraints

• Fully rational decision makers maximize decisions by choosing the optimal solution

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Advantage and Pitfalls of Group Decision Making

• Advantage • In the decision-

making process groups perform better than individuals in: • Defining the

problem • Generating

alternative solutions

• Pitfalls • Groupthink: Barrier

to good decision making

• Takes considerable time

• Individuals can dominate group discussions

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Using Groups to Improve Decision Making

• Structured conflict • Right kind of conflict can lead to better group

decision making • C-type conflict: Disagreement that focuses on

problem and issue-related differences of opinion

• A-type conflict: Disagreement that focuses on individuals or personal issues

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Using Groups to Improve Decision Making

• Nominal group technique • Begins and ends by having group members write

down and evaluate ideas • Shared with the group

• Improves group decision making by decreasing a-type conflict

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Using Groups to Improve Decision Making

• Delphi technique • Members of a panel of experts respond to

questions and to each other until reaching agreement on an issue

• Electronic brainstorming • Group members use computers to build on each

others’ ideas • Generate as many alternative solutions as

possible

SUMMARY

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• Planning brings about increase in individual and organizational performance

• Planning works best when the goals and action plans at the bottom and middle of the organization support the goals and action plans at the top of the organization

• Decision making is the process of choosing a solution from available alternatives

KEY TERMS

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• Planning • S.M.A.R.T. goals • Goal commitment • Action plan • Proximal goals • Distal goals • Options-based

planning • Slack resources • Strategic plans

• Purpose statement • Strategic objective • Tactical plans • Management by

objectives • Operational plans • Single-use plans • Standing plans • Policies • Procedures

KEY TERMS

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• Rules and regulations • Budgeting • Decision making • Rational decision

making • Problem • Decision criteria • Absolute

comparisons • Relative comparisons

• Maximize • Satisficing • Groupthink • C-type conflict • A-type conflict • Devil’s advocacy • Dialectical inquiry • Nominal group

technique

KEY TERMS

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• Delphi technique • Brainstorming • Electronic

brainstorming • Production blocking • Evaluation

apprehension

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