Planning and Decission Making

Planning and

Decission Making

Week 3

Steps in Planning



_{Choose goals}



_{Identify actions}



_{Allocate responsibility}



_{Review Performance}

Unit plans (heads of departments, teams, individuals

Levels of Planning

Operating plans (heads of functions)

Business-level strategic plan

(heads of businesses)

Types of Plans



_{Strategic plans:}

_{A plan that outlines the major goals of an}

organization and the organizationwide strategies of attaining

those goals.



_{Operating plans:}

_{Plans that specify goals, actions, and}

responsibility for individual functions.



_{Tactical plans:}

_{The action managers adopt over the short to}

medium term to deal with a specifc opportunity or threat that

has emerged.



_{Unit plans:}

_{Plans for departments within functions, work}

Types of Plans



_{Single-use plans:}

_{Plans that address unique events that do not}

reoccur.



_{Standing plans:}

_{Plans used to handle events that reoccur}

frequently.



_{Contingency plans:}

_{Plans formulated to address specifc}

possible future events that might have a signifcant impact on the organization.



_{Crisis management planning:}

_{Plan formulated specifcally to}

deal with possible future crises.



_{Scenario planning:}

_{Plans that are based on “what if” scenarios}

Scenario Planning

with those

futures

Invest in one

plan but …

Hedge your bets

by preparing for

other scenarios

and …

Switch strategy if

tracking of signposts

shows alternative

scenarios becoming

Question



_{Can scenario planning}

apply and be useful to

you as a student?

Scenario Planning Traps



_{Treating scenarios as forecasts}



_{Failing to make scenarios global}

enough in scope



_{Failing to focus scenarios in areas of}

potential impact



_{Treating scenarios as informational}

only

The Strategic Planning

Process

Feedback

Mission, vision,

values, and goals

SWOT analysis

formulate strategies

Draft action plans

Setting the Context:

Mission, Vision, Values, and

Goals



_Mission:

The purpose of an organization.



_Vision:

A desired future state.



_Values:

The philosophical properties to which

managers are committed.



_Goals:

A desired future state that an

Mission Checklist



_{Value added}



_Unique

Characteristics of Goals



_{They are}

_precise

_and

measurable

.



_They

_address

_important

_issues

_.



_{They are}

_challenging

_but

realistic

.



_They

_specify

_a

_{time period}

_in

10 Ingredients for Successful

Goals



_Specifc



_Simple



_Signifcant



_Strategic



_Rational



_Measurable



_Tangible



_Written



_Shared



_{Consistent with}

your values

The Benefits of Planning

 _{Planning gives direction and purpose to an organization; it is a}

mechanism for deciding the goals of the organization.

 _{Planning is the process by which management allocates scarce}

resources, including capital and people, to diferent activities.

 _{Planning drives operating budgets-strategic, operations, and unit}

plans determine fnancial budgets for the coming year.

 _{Planning assigns roles and responsibilities to individuals and units}

within the organization.

Countering the Pitfalls of

Failure to

question

rivals

’

actions

Decentralized

planning

Scenario planning;

devil

’

s advocate

Link to goals;

tie to budgets

Role-playing

The Rational

Continue with course of action

Evaluate

outcome

Does not meet expectations

Bounded Rationality

and Satisficing



_{Bounded rationality:}

_{Limits in}

human ability to formulate complex

problems, to gather and process the

information necessary for solving those

problems, and thus to solve those

problems in a rational way.



_Satisfce:

_{Aiming for a satisfactory level}

Decision-Making Heuristics

and Cognitive Biases



_{Decision heuristics}



_{80-20 rule}



_{Cognitive bias}



_{Prior hypothesis bias}

80-20 Rule

Performing in your 20 percent if you

’

re:



Engaged in activities that advance your overall

purpose in life



Doing things you have always wanted to do not what

others want you to do



Hiring people to do the tasks you are not good at or

don't like doing.

Improving Decision Making



_Devil

_’

_{s advocacy: The generation of both a plan}

and a critical analysis of the plan by a devil

’

s advocate.



_{Dialectic injury: The generation of a plan (a thesis)}

and a counterplan (an antithesis) that refect plausible

but conficting courses of action.



_{Outside view: Identifying a reference class of}