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Planning

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Choosing a goal and developing a method or strategy to achieve that goal

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Decision-Making

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The cornerstone of planning and the catalyst that drives the planning process. Goals follow from decisions made by various managers.

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Planning as a Generic Process

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Planning as a process itself can be thought of as a generic activity applicable to all organizations at multiple levels within an organization. But no two orgs plan exactly the same way.

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First step in the planning process

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Understanding the environment

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Benefits of Planning

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Persistence - Working hard for long periods Direction - Spend time on goal accomplishment Intensified Efforts - Employee with specific goal will work harder. Creation of Task Strategies - Setting goals works for companies and individuals

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Disadvantages of Planning

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Impedes change and adaptation - Companies can become too committed to achieving goals False sense of certainty - Environments change and can mess up plans Detachment of planners - top level managers are supposed to focus on big picture and not implementation

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Generic Planning Process

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1. Set Goals 2. Develop commitment 3. Develop effective action plans 4. Track progress toward goal achievement 5. Maintain flexibility

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Setting Goals

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Effective goals are SMART S - specific M - Measurable A - Attainable R - Realistic T - Timely

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Developing Commitment to Goals

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The determination to achieve a goal is increased by: -Setting Goals together w/ managers and employees -Making goals reasonable -Making goals public -Obtaining top management support

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Developing Effective Action Plans

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How - Specific steps Who - People What - Resources When - Time period

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Tracking Progress

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Set distal and proximal goals Gather and provide performance feedback

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Distal Goals

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Long-term, primary, strategic goals

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Proximal Goals

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Short-term goals or subgoals More motivating and rewarding than waiting to achieve far-off distal goals.

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Performance Feedback

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Enables workers and managers to track their progress toward goal achievements and to make adjustments in effort, direction, and strategies.

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Maintain Flexibility with

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Option-based planning - keep options open by making small, simultaneous investments in many options or plans and eventually investing more in the successful ones or.. Learning based planning - plans need to be continuously adjusted as companies learn better ways to achieve goals

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Planning from top to bottom

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Top Managers: Mission and vision Middle Managers: Tactical plans and management by objectives First-Level Managers: Operational plans, standing plans, single use plans

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Planning time lines

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Strategic: 2-5 years Tactical: 6 months-2 years Operational: 30 days-6 months

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Organizational Mission and Vision

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The organization's purpose, premises, values, and directions. From here flows the company's parallel goals and plans in a cascading fashion

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Purpose Statement

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- A statement of a company's purpose or reason for existing. - Should be inspirational, clear, and consistent with widely shared company values.

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Strategic Objectives

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More specific goals that unify company-wide efforts, stretches and challenges the organization, and possesses a finish line and a timeline

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Strategic Plans

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- Flow from mission and vision - Makes clear how the company will serve customers and position itself against competitors in the next 2-5 years. - Outlines decisions of resources allocation, priorities, and action steps necessary to reach strategic goals

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Tactical Goals

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- Set up by and for middle managers. - Operationalizes actions to carry out strategic plans - Over next 6 months to 2 years

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Tactical Plans

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- Aimed at achieving tactical goals and is developed to implement specific parts of a strategic plan. - Specifies how a company will use resources, budgets, and people to accomplish goals within its mission

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Management by Objectives (MBO) 4 steps

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Management techniques often used to develop and carry out tactical plans in 4 steps: 1. Management and employees discuss possible goals 2. Work together to select goals that are challenging, attainable, and consistent with the company's overall goals 3. Jointly develop tactical plans 4. Meet regularly to review progress

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Operational Goals

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-Set by and for lower level managers -Shaped by tactical plans and tactical goals -Concerned with shorter-term issues associated with tactical goals

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Operational Plans

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-Focus on carrying out tactical plans to achieve operational goals -Day-to-day plans for producing or delivering products and services over a 30-day to six month period

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Single-Use Plans

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-Deal with unique, one-time-only events -Created, carried out, and then never used again

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Standing Plans

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Plans are created and can be used repeatedly to handle frequently recurring events Ex/ Policies: General course of action that company managers should take in response to a particular event or situation -Procedures - Series of steps that should be taken in response to a particular event -Rules and regulations - Specify what must happen or not happen

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Budgets

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Quantitative planning to decide how to allocate money to accomplish company goals

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Big Idea

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Align company goals (strategy) with the plans of middle managers (tactics) and work performance by employees (operations) to ensure that everyone is pulling in the same direction at the same time

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Rational Decisions Making

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A systematic process of defining problems, evaluating alternatives, and choosing optimal solutions

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Steps to Rational Decision Making

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1. Define the problem 2. Identify decision criteria 3. Weight the criteria 4. Generate alternative courses of action 5. Evaluate each alternative 6. Compute the optimal decisions

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Define the Problem

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- Problem exists when there is a gap between a desired state and an existing state -Managers must be aware of the gap, be motivated to reduce the gap, have the knowledge, skills, abilities, and resources to fix the problem

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Identify Decision Criteria

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- Standards used to guide judgments and decisions - The more the criteria to a potential solution meets, the better that solution should be

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Weight the Criteria

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-Absolute comparisons: Each criterion is compared to a standard or ranked on its own merits -Relative comparisons: Each criterion is compared directly to every other criterion

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Generate Alternative Courses of Action

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The idea is to generate as many alternatives as possible

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Evaluate Each Alternative

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-Each alternative is systematically evaluated against each criterion -This step can take much longer and be more expensive than other steps in the process

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Compute the Optimal Decision

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-Multiply the rating for each criterion by the weight for that criterion -Sum the scores for each alternative course of action

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Limits to Rational Decision Making

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Managers face time and money restraints, incomplete and imperfect information, and have limited decision-making capabilities

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Using Groups to Improve Decision Making

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Structured Conflict Nominal Group Technique Delphi Technique Stepladder Technique Electronic Brainstorming

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Structured Conflict

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- C-Type Conflict: Cognitive conflict. Disagreement that focuses on problem and issue related differences of opinion. Willingness to reconcile differences. - A-Type Conflict: Affective conflict. Disagreement that focuses on individual or personal issues instead of professional. Results in hostility

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Dialectical Inquiry

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Generate a conflicting counterproposal based on assumptions underlying the potential solution. Each side present argument and see if original idea survives.

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Nominal Group Technique

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Members write down ideas for probs/solutions and share them. Ideas are written on a flip chart. Group discusses. Ideas are ranked and ones with highest rankings are selected.

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Delphi Technique

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Assemble panel of experts. Create questionnaire of open-ended questions. Summarize feedback from panel. Create reports. Continue feedback until panel reaches agreement.

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Stepladder Technique

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Start out with two members. Discuss problems and solutions. Add people in one at a time and discuss other possibilities and thoughts on past decisions. Each new member has completely independent thoughts.

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Four Rules of Electronic Brainstorming

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1. The more ideas, the better 2. All ideas are acceptable 3. Other group members' ideas should be used to come up with even more ideas 4. Criticism or evaluation of ideas is not allowed

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Pros of Electronic Brainstorming

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Overcomes production blocking (don't have to wait to share your idea) Overcomes evaluation apprehension (being afraid of what others will think of your idea)

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Cons of Electronic Brainstorming

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Greater expense No automatic acceptance of ideas because of one's position Lack of typing skills

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