GMS200- Global Management
Chapter 2
Management Learning Past to Present
Dr. Saeed (Sam) Nejatian
F2025
Copyright ©2021 John Wiley & Sons Canada, Ltd.
Learning Objectives
2.1 Describe the principal insights of classical management
thinking.
2.2 Identify key insights of the behavioral management
approaches.
2.3 Explain the core foundations of modern management
theory and practice.
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2
The Industrial Revolution
Sources:
https://en.wikipedia.org/wiki/Industrial_Revolution
https://hbr.org/2014/07/managements-three-eras-abrief-history
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3
Major Classical Approach Branches to Management
Major branches in the classical approach to management
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Classical Management Approaches (1 of 8)
Four guiding principles of scientific management (Frederick
Taylor)
1. Develop a “science” that includes rules of motion, standardized
work implements, and proper working conditions for every job.
2. Carefully select workers with the right abilities for the job.
3. Carefully train workers to do the job and give them incentives
to cooperate with the job “science.”
4. Support workers by carefully planning their task and by
smoothing the way as they do their work.
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Classical Management Approaches
Frederick W. Taylor (1856 –1915)
• An American mechanical engineer
• The “father of scientific management”
• One of the first management consultants
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Classical Management Approaches
Four guiding principles of scientific management
Develop a “science” that includes rules of motion,
standardized work implements, and proper working
conditions for every job.
1. Carefully select workers with the right abilities for
the job.
2. Carefully train workers to do the job and give them
incentives to cooperate with the job “science.”
3. Support workers by carefully planning their work
and by smoothing the way as they do their work.
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Classical Management Approaches (2 of 8)
Scientific management (the Gilbreths)
• Motion study
o Science of reducing a job or task to its basic physical
motions
o Eliminating wasted motions improves performance
o Improved performance results in increased productivity
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Classical Management Approaches (3 of 8)
Practical insights from scientific management
• Make results-based compensation a performance
incentive
• Carefully design jobs with efficient work methods
• Carefully select workers with the abilities to do these jobs
• Train workers to perform jobs to the best of their abilities
• Train supervisors to support workers so they can perform
to the best of their abilities
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Classical Management Approaches (4 of 8)
Administrative principles (Henri Fayol) – rules / duties of
management:
• Foresight
o to complete a plan of action for the future
• Organization
o to provide and mobilize resources
to implement the plan
• Command
o to lead, select, and evaluate workers to get the best
work toward the plan
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Classical Management Approaches (5 of 8)
Administrative principles (Henri Fayol) – rules / duties of
management (cont’d):
• Coordination
o to fit diverse efforts together and ensure information is
shared and problems solved
• Control
o to make sure things happen according to plan and to
take necessary corrective action
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Classical Management Approaches (6 of 8)
Bureaucratic organization (Max Weber) 1864-1920
• Bureaucracy
o An ideal, intentionally rational, and very efficient form
of organization
o Based on principles of logic, order, and legitimate
authority
o Believed that it would use resources
more efficiently and treat employees
more fairly
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Classical Management Approaches (7 of 8)
Characteristics of bureaucratic organizations:
• Clear division of labour
• Clear hierarchy of authority
• Formal rules and procedures
• Impersonality
• Careers based on merit
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Classical Management Approaches (8 of 8)
Possible disadvantages of bureaucracy
• Excessive paperwork or “red tape”
• Slowness in handling problems
• Rigidity in the face of shifting customer needs
• High resistance to change
• Employee apathy
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Behavioural Management Approaches (1 of 16)
Foundations in the behavioural or human resource approaches to management
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Behavioural Management Approaches (2 of 16)
• Follett’s organizations as communities (Mary Parker Follett)
1868-1933
Source: https://en.wikipedia.org/wiki/Mary_Parker_Follett
Groups and human cooperation
• Groups allow individuals to combine
their talents for a greater good
• Organizations are cooperating
“communities” of managers and workers
• Manager’s job is to help people cooperate and achieve
an integration of goals and interests
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Behavioural Management Approaches (3 of 16)
Organizations as communities
• Forward-looking management insights:
o Making every employee an owner creates a sense of
collective responsibility
• precursor of employee ownership, profit sharing, and
gain-sharing
o Business problems involve a variety of inter-related factors
• precursor of systems and contingency thinking
o Private profits must be considered relative to public good
• precursor of managerial ethics and corporate social
responsibility
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Behavioural Management Approaches (4 of 16)
Hawthorne studies
• Initial study examined how economic incentives and
physical conditions affected worker output
• No consistent relationship found
• “Psychological factors” influenced results
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Behavioural Management Approaches (5 of 16)
Hawthorne studies
• Social setting and human relations
o Manipulated physical work conditions to assess impact
on output
o Designed to minimize the “psychological factors” of
previous experiment
o Mayo and colleagues concluded:
• New “social setting” led workers to do good job
• Good “human relations” = higher productivity
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Behavioural Management Approaches (6 of 16)
Hawthorne studies
• Employee attitudes and group processes
o Some things satisfied some workers but not others
o People restricted output to adhere to group norms
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Behavioural Management Approaches (7 of 16)
Lessons from the Hawthorne Studies
• Social and human factors are keys to productivity
• Hawthorne effect — people who are singled out for special
attention perform as expected
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Behavioural Management Approaches (8 of 16)
Maslow’s theory of human needs
• A need is a physiological or psychological deficiency a
person feels compelled to satisfy
o Physiological
o Safety
o Social
o Esteem
o Self-actualization
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Behavioural Management Approaches (9 of 16)
Maslow’s hierarchy of human needs
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Behavioural Management Approaches (10 of 16)
Maslow’s theory of human needs
• Deficit principle
o A satisfied need is not a motivator of behavior – people
try to satisfy deprived needs
• Progression principle
o A need becomes a motivator once the preceding lowerlevel need is satisfied – people try to satisfy these
needs in sequence
• Both principles cease to operate at self-actualization
level
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Behavioural Management Approaches (11 of 16)
McGregor’s Theory X assumes that workers:
• Dislike work
• Lack ambition
• Are irresponsible
• Resist change
• Prefer to be led
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Behavioural Management Approaches (12 of 16)
McGregor’s Theory Y assumes that workers are:
• Willing to work hard
• Willing to accept responsibility
• Capable of self control
• Capable of self-direction
• Imaginative and creative
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Behavioural Management Approaches (13 of 16)
Implications of Theory X and Theory Y:
• Managers create self-fulfilling prophecies
• Theory X managers create situations where workers
become dependent and reluctant
• Theory Y managers create situations where workers
respond with initiative and high performance
o Central to notions of empowerment and selfmanagement
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Implications of Theory X and Theory Y:
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Behavioural Management Approaches (14 of 16)
Argyris’s theory of adult personality
• Classical management principles and practices inhibit
worker maturation and are inconsistent with the mature
adult personality
• Psychological success occurs when people define own
goals
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Behavioural Management Approaches (15 of 16)
Argyris’s theory of adult personality
• Management practices should accommodate the mature
personality by:
o Increasing task responsibility
o Increasing task variety
o Using participative decision making
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Behavioural Management Approaches (16 of 16)
Foundations for continuing developments in management
• Quantitative analysis and tools
• Organizations as systems
• Contingency thinking
• Quality management
• Evidence-based management
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Modern Management Foundations (1 of 8)
Quantitative Analysis and Tools
• Analytics: the use of large data bases and mathematics to
solve problems and make informed decisions using
systematic analysis
• Typical quantitative approach to managerial problemsolving
o Problem encountered, it is systematically analyzed,
appropriate mathematical models and computations
applied, optimal solution identified
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Modern Management Foundations (2 of 8)
Organizations as systems
• System
o Collection of interrelated parts that function together
to achieve a common purpose
• Subsystem
o A smaller component of a larger system
• Open systems
o Organizations that interact with their environments in
the continual process of transforming resource inputs
into outputs
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Modern Management Foundations (3 of 8)
Organizations as complex networks of interacting subsystems
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Modern Management Foundations (4 of 8)
Contingency thinking
• Tries to match managerial responses with problems and
opportunities unique to different situations
• No “one best way” to manage in all circumstances
• The appropriate way to manage depends on the situation
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37
Sources: http://oer2go.org/mods/en- boundless/www.boundless.com/management/textbooks/boundless-managementtextbook/organizational-theory-3/modern-thinking-31/the-contingency-viewpoint-1781461/index.html
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38
Modern Management Foundations (5 of 8)
Quality Management System (QMS)
• Managers and workers in progressive organizations are
quality conscious
o Quality and competitive advantage are linked
• Total quality management (TQM)
o Comprehensive approach to continuous improvement
for the entire organization
o The focus is on meeting customers’ needs by doing
things right the first time
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39
International
Standards
Organization
ISO 9000/9001…..
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Modern Management Foundations (6 of 8)
Quality management System
• Continuous improvement
o Continual search for new ways to improve quality
o Something always can and should be improved
• ISO certification
o Global quality management standards
o Refine and upgrade quality to meet ISO requirements
o A rigorous assessment to ensure standards are met
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Modern Management Foundations (7 of 8)
Evidence-Based Management
• Making management decisions based on “hard facts”
about what really works
• Managers should be well informed and knowledgeable
when making decisions
• Management must conduct solid and meaningful research
using scientific methods
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Modern Management Foundations (8 of 8)
Evidence-Based Positive Human Resource Management Practices
•
•
•
•
•
•
•
Employment security
Selective hiring
Self-managing teams
High pay based on merit
Training and development
Reduced status distinctions
Shared information
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43
Copyright
Copyright © 2018 John Wiley & Sons, Inc.
All rights reserved. Reproduction or translation of this work beyond that permitted in Section 117 of
the 1976 United States Act without the express written permission of the copyright owner is
unlawful. Request for further information should be addressed to the Permissions Department, John
Wiley & Sons, Inc. The purchaser may make back-up copies for his/her own use only and not for
distribution or resale. The Publisher assumes no responsibility for errors, omissions, or damages,
caused by the use of these programs or from the use of the information contained herein.
Copyright ©2021 John Wiley & Sons Canada, Ltd.
44
GMS200- Global Management
Chapter 5
Global Management and Cultural Diversity
Dr. Saeed (Sam) Nejatian LSS MBB
F2025
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Copyright ©2021 John Wiley & Sons Canada, Ltd.
Learning Objectives
• Discuss the implications of globalization for
management and organizations.
• Describe global corporations and the issues
they face and create.
• Define culture and identify ways to describe
diversity in global cultures.
• Identify the benefits of global learning for
management and organizations.
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2
Management and Globalization (1 of 18)
Key concepts in the challenges of globalization:
• Global economy
• Globalization
• World 3.0
• Global management
• Global manager
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Management & Globalization: The challenges
Global economy
• Resources, markets, and competition are worldwide in
scope
Globalization
• The growing interdependence among elements in the
global economy
World 3.0
• Balancing cooperation in the global economy with
national identities and interests
Global management
• Managing business and organizations with interests in
more than one country
Global manager
• Is culturally aware and informed on international affairs
Management and Globalization (2 of 18)
Global economy
• Resources, supplies, product markets, and
competition are worldwide in scope
Globalization
• The growing interdependence among elements in the
global economy
World 3.0
• Balancing cooperation in the global economy with
national identities and interests
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Management and Globalization (3 of 18)
Global management
• Managing business and organizations with interests in
more than one country
Global manager
• Has global perspective, and is culturally aware and
informed on current international affairs
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Management and Globalization (4 of 18)
International businesses
• Conducting for-profit transactions of goods & services
across national boundaries
Reasons why businesses go global:
• Profits
• Customers
• Suppliers
• Labour
• Capital
• Risk
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Management and Globalization (5 of 18)
Market entry strategies
• involve the sale of goods or services to foreign
markets but do not require expensive investments
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Management and Globalization (6 of 18)
Types of market entry strategies:
• Global sourcing
• Exporting
• Importing
• Licensing agreement
• Franchising
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Management and Globalization (7 of 18)
Types of direct investment strategies:
• Strategic alliance
• Joint venture
• Wholly owned subsidiary
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Management and Globalization (8 of 18)
Common forms of global business
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Management and Globalization (9 of 18)
How Companies Go Global:
Global Sourcing
• the process of purchasing materials, manufacturing
components, or locating business services around the
world
Exporting
• selling locally made products in foreign markets
Importing
• buying foreign-made products and selling them
domestically
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Management and Globalization (10 of 18)
How Companies Go Global:
Licensing Agreement
• one firm pays fee for rights to make or sell another
company’s products
Franchising
• a fee is paid for rights to use another firm’s name,
branding, and methods
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Management and Globalization (11 of 18)
• Foreign direct investment involves setting up and
buying all or part of a business in another country.
• Insourcing refers to local job creation that results from
foreign direct investment.
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Management and Globalization (12 of 18)
Types of insourcing:
• Joint ventures: operate in a foreign country through
co-ownership by foreign and local partners
• Strategic alliances: a partnership in which foreign and
domestic firms share resources and knowledge for
mutual gains
• Foreign subsidiaries: local operation completely
owned by a foreign firm
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Management and Globalization (13 of 18)
Criteria for choosing a joint venture partner:
• Familiarity with your firm’s major business
• Strong local workforce
• Values its customers
• Future expansion possibilities
• Strong local market for partner’s own products
• Good profit potential
• Sound financial standing
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Management and Globalization (14 of 18)
Global business environments
• Legal and political systems
• Trade agreements and trade barriers
• Regional economic alliances
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Management and Globalization (15 of 18)
Legal and political systems
• Differing laws and practices regarding
o
Business ownership
o
Negotiation and implementation of contracts
o
Foreign currency exchange
o
Protection of intellectual property rights
• Counterfeit merchandise
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Management and Globalization (16 of 18)
Legal and political systems
• Political risk
o
Potential loss in value or control of a foreign
investment due to instability and political changes
in the host country
• Political risk analysis
o
Forecast political disruptions that threaten the
security of a foreign investment
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Management and Globalization (17 of 18)
Trade Agreements and Trade Barriers
•
World Trade Organization (WTO) deals with issues about
o
Most favoured nation status
o
Tariffs
o
Non-tariff barriers
o
Protectionism
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Management and Globalization (18 of 18)
Regional Economic Alliances
•
NAFTA or USMCA – North American Free Trade Agreement
(United States-Mexico-Canada Agreement)
•
EU – European Union (Recent departure of the UK)
•
APEC – Asia Pacific Economic Cooperation
•
ASEAN – Association of Southeast Asian Nations
•
SADC – Southern Africa Development Community
•
TPP11 – Trans-Pacific Partnership (includes 11 countries)
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Global Businesses (1 of 8)
Types of global businesses:
•
Global corporation
o
•
MNE (multinational enterprise) or MNC (multinational
corporation) with extensive business operations in many
foreign countries
Transnational corporation
o
A global corporation that operates worldwide on a
borderless basis, without being identified to one national
home
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Global Businesses (2 of 8)
Mutual benefits for host country and global corporation or
MNC:
•
Shared growth opportunities
•
Shared income opportunities
•
Shared learning opportunities
•
Shared development opportunities
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Global Businesses (3 of 8)
What should go right and what can go wrong in global
corporation and host-country relationships
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Global Businesses (4 of 8)
Host country complaints about MNCs:
•
Excessive profits
•
Domination of local economy
•
Interference with local government
•
Hiring the best local talent
•
Limited technology transfer
•
Disrespect for local customs
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Global Businesses (5 of 8)
MNC complaints about host countries:
•
Profit limitations
•
Overpriced resources
•
Exploitative rules
•
Foreign exchange restrictions
•
Failure to uphold contracts
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Global Businesses (6 of 8)
Ethical challenges for Global Businesses:
•
Corruption
•
Child labour
•
Sweatshops
•
Conflict minerals
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Global Businesses (7 of 8)
Ethical issues for Global Businesses:
•
Corruption – illegal practices that further one’s business
interests
•
Corruption of Foreign Public Officials Act (CFPOA) – makes
it illegal for Canadian firms and their representatives to
engage in corrupt practices overseas
o
Bribes to foreign officials
o
Excessive commissions
o
Non-monetary gifts
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Global Businesses (8 of 8)
Child labour, Sweatshops, and Conflict Minerals:
•
Child labour – employment of children for work otherwise
done by adults
•
Sweatshops – employment of workers at very low wages
for long hours in poor working conditions
•
Conflict Minerals – gains from sale of minerals used to
help finance armed violence (such as in the DRC)
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Cultures and Global Diversity (1 of 11)
Culture
•
The shared set of beliefs, values, and patterns of behavior
common to a group of people
Culture shock
•
Confusion and discomfort a person experiences in an
unfamiliar culture
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Cultures and Global Diversity (2 of 11)
Cultural intelligence
•
The ability to adapt and adjust to new cultures
Ethnocentrism
•
Tendency to consider one’s own culture as superior to
others
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Cultures and Global Diversity (3 of 11)
Stages in adjusting to a new culture:
•
Confusion
•
Small victories
•
The honeymoon
•
Irritation and anger
•
Reality
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Cultures and Global Diversity (4 of 11)
Silent languages of culture:
•
•
Context
o
Low context
o
High context
Space
o
•
Proxemics
Time
o
Monochronic
o
Polychronic
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Cultures and Global Diversity (5 of 11)
Context
•
Low context cultures - emphasize communication via
spoken or written words
o
United States
o
Canada
o
Germany
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Cultures and Global Diversity (6 of 11)
Context
•
High context cultures – rely on nonverbal and situational
cues as well as on spoken or written words
o
Thailand
o
Malaysia
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Cultures and Global Diversity (7 of 11)
Time
•
Monochronic cultures – people tend to do one thing at a
time
o
•
Canada
Polychronic cultures – time is used to accomplish many
different things at once
o
Egypt
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Cultures and Global Diversity (8 of 11)
Space
•
Proxemics – study of how people use space to
communicate
o
In North America people value “personal space”
o
Many Latin and Asian cultures expect much less personal
space
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Cultures and Global Diversity (9 of 11)
Tight and Loose Cultures
•
Cultural tightness-looseness
o
Strength of norms that govern social behavior
o
Tolerance for any deviation from norms
o
Tight = Japan, Korea, Malaysia
o
Loose = Australia, Brazil, Hungary
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Cultures and Global Diversity (10 of 11)
Values and national cultures (Hofstede):
•
Power distance
•
Uncertainty avoidance
•
Individualism-collectivism
•
Masculinity-femininity
•
Time orientation
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Cultures and Global Diversity (11 of 11)
How countries compare on Hofstede’s dimensions of
national
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Global Management Learning (1 of 2)
Comparative management
•
How management practices systematically differ among
countries and/or cultures
Intercultural competencies
•
Skills and personal characteristics that help us be
successful in cross-cultural situations.
Global managers
•
Need to successfully apply management functions across
international boundaries
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Global Management Learning (2 of 2)
Global learning goals:
•
Practices not universal
•
Engage critical thinking
•
Look everywhere for new management ideas
•
Always consider culture
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42
Copyright
Copyright © 2021 John Wiley & Sons Canada, Ltd.
All rights reserved. Reproductions or translations of this work beyond that permitted by
Access Copyright (The Canadian Copyright Licensing Agency) is unlawful. Requests for
further information should be addressed to the Permissions Department, John Wiley &
Sons Canada, Ltd. The purchaser may make back-up copies for his or her own use only
and not for distribution or resale. The author and the publisher assume no responsibility
for errors, omissions, or damages caused by the use of these programs or from the use of
the information contained herein.
Copyright ©2021 John Wiley & Sons Canada, Ltd.
43
GMS200- Global Management
Chapter 7
Data and Decision-Making
Dr. Saeed (Sam) Nejatian LLS MBB
F2025
This slide deck contains animations. Please disable animations if they cause issues with your device.
Copyright ©2021 John Wiley & Sons Canada, Ltd.
Learning Objectives
• Discuss the role of information, data, and
analytics in management.
• Identify different ways managers approach and
deal with problems.
• Explain the six steps in the decision-making
process.
• Describe the potential pitfalls and sources of
creativity in managerial decision making.
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2
Managerial competencies
Managers must have
•
Technological competency
o
•
Information competency
o
•
Ability to understand new technologies and to use
them to their best advantage
Ability to locate, gather, organize, and display
information for decision-making and problem solving
Analytical competency
o
Ability to evaluate and analyze information to make
actual decisions and solve real problems
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3
Information, Technology & Management (1/6)
What is useful information?
• Data
o
Raw facts and observations
• Information
o
Data made useful and meaningful for decisionmaking
Information drives management decisionmaking
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Information, Technology & Management (2/6)
Characteristics of useful information:
• Timely
• High quality
• Complete
• Relevant
• Understandable
Management Information System:
• Using the latest technologies to collect, organize, and
distribute data
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5
Information, Technology & Management (3/6)
Data Mining and Analytics
• Data mining: is the process of analyzing data to
produce useful information for decision-makers.
• Big data : exist in huge quantities and are difficult to
process without sophisticated mathematical and
analytical techniques.
• Management analytics: involves the systematic
evaluation and analysis of data to make informed
decisions.
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6
Information, Technology & Management (4/6)
Business Intelligence and Data Visualization
• Business Intelligence
o
Taps information systems to extract and report
data in organized ways that are useful to decisionmakers
• Data Visualization
o
Visually update and display key performance
metrics and information on a real-time basis
through executive dashboards
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7
Business intelligence & Executive Dashboards
8
Information, Technology & Management (5/6)
Information needs in organizations
• Information exchanges with the external
environment:
o
Gather intelligence information
o
Provide public information
• Information exchanges within the organization:
o
Facilitate decision- making
o
Facilitate problem- solving
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9
Information, Technology & Management (6/6)
Internal and external information needs in organizations
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10
Problem Solving & Managerial Decisions (1/ 16)
• Managers as Information Processors
o
Continually gather, share, and receive information
o
Today, as much electronic as it is face to face
o
Always on, always connected
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Problem Solving & Managerial Decisions
(2/16)
The manager as an information processor and nerve centre for
planning, organizing, leading, and controlling
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Problem Solving & Managerial Decisions (3/16)
Problem solving
• The process of identifying a discrepancy between
actual and desired performance and taking action to
resolve it.
Decision
o
A choice among possible alternative courses of
action
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Problem Solving & Managerial Decisions (4/16)
Performance threat
o
Something is wrong or has the potential to go
wrong
Performance opportunity
o
Situation offers the chance for a better future if the
right steps are taken
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Problem Solving & Managerial Decisions (5/16)
Problem avoiders
•
Inactive in information gathering and solving problems
Problem solvers
•
Reactive in gathering information and solving problems
Problem seekers
• Proactive in anticipating problems and opportunities
and taking appropriate action to gain an advantage
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Problem Solving & Managerial Decisions (7/16)
Systematic thinking
o
approaches problems in a rational, step-by-step,
and analytical fashion
Intuitive thinking
o
approaches problems in a flexible and spontaneous
fashion
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Problem Solving & Managerial Decisions (8/16)
Multi-dimensional thinking applies both intuitive and
systematic thinking
• Effective multi-dimensional thinking requires skill at
strategic opportunism
o Remaining focused on long-term objectives
o Being flexible to resolve short-term problems
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Managers use different cognitive
styles Cont.
18
Problem Solving & Managerial Decisions (9/16)
Managers use different cognitive styles Cont.
The four different types of cognitive thinkers
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The Decision-Making Process (7/11)
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20
Problem Solving & Managerial Decisions (10/16)
Types of problems:
• Structured problems are ones that are familiar,
straightforward, and clear with respect to information
needs
• Programmed decisions apply solutions that are readily
available from past experiences to solve structured
problems
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Problem Solving & Managerial Decisions (11/16)
Types of problems:
• Unstructured problems are ones that are full of
ambiguities and information deficiencies
• Non-programmed decisions apply a specific solution
to meet the demands of a unique problem
• Commonly faced by higher-level management
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Problem Solving & Managerial Decisions (12/16)
Crisis decision-making:
• A crisis involves an unexpected problem that can lead
to disaster if not resolved quickly and appropriately.
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Problem Solving & Managerial Decisions (13/16)
Rules for crisis management:
• Figure out what is going on
• Remember that speed matters
• Remember that slow counts too
• Respect the danger of the unfamiliar
• Value the skeptic
• Be ready to “fight fire with fire ”
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Problem Solving & Managerial Decisions (14/16)
Managers make decisions with various amounts of
information
• Certain environment
o
offers complete factual information on possible
action alternatives and their consequences
• Risk environment
o
lacks complete information but offers probabilities
of the likely outcomes for possible action
alternatives
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Problem Solving & Managerial Decisions (15/16)
Managers make decisions with various amounts of
information
• Uncertain environment
o
lacks so much information that it is difficult to
assign probabilities to the likely outcomes of
alternatives
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Problem Solving & Managerial Decisions
(16/16)
Three environments for problem solving and decision-making
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The Decision-Making Process (1 /11)
Steps in the decision-making process
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The Decision-Making Process (2/11)
Step 1:
Identify and define the problem
• Focuses on information gathering, information
processing, and deliberation
• Decision objectives should be established
• Common mistakes in defining problems:
o
Defining the problem too broadly or too narrowly
o
Focusing on symptoms instead of causes
o
Choosing the wrong problem to deal with
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The Decision-Making Process (3/11)
Step 2:
Generate and Evaluate Alternative Courses of Action
• Potential solutions are formulated, and more
information is gathered, data are analyzed, the
advantages and disadvantages of alternative solutions
are identified
• Approaches for evaluating alternatives:
o
Stakeholder analysis
o
Cost-benefit analysis
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The Decision-Making Process (4 & 5/11)
Step 2: Generate & Evaluate Possible Courses of Action
•
•
Criteria for evaluating alternatives:
o
Benefits
o
Costs
o
Timeliness
o
Acceptability
o
Ethical soundness
Common mistakes:
o
Abandoning the search for alternatives too quickly
o
Lack of self-confidence and commitment
o
©2021 or
John Wiley
& Sons Canada,
Ltd. effects
UnanticipatedCopyright
positive
negative
side
31
The Decision-Making Process (6/11)
Step 3:
Decide on a Preferred Course of Action
• Two different approaches
o
Classical model leads to optimizing decisions
o
Behavioral model leads to satisficing decisions
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The Decision-Making Process (7/11)
Differences in the classical and behavioural decision-making models
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The Decision-Making Process (8/11)
Step 4:
Implement the Decision
• Involves taking action to make sure the solution
decided upon becomes a reality
• Managers need to have willingness and ability to
implement action plans.
• Lack-of-participation error should be avoided.
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The Decision-Making Process (9/11)
Step 5:
Evaluate Results
• Involves comparing actual and desired results
• Positive and negative consequences of chosen course
of action should be examined.
• If actual results fall short of desired results, the
manager returns to earlier steps in the decisionmaking process.
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The Decision-Making Process
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3636
The Decision-Making Process (10/11)
At all steps, check ethical reasoning! Ask these spotlight
questions:
• Utility
o
Does the decision satisfy all constituents or
stakeholders?
• Rights
o
Does the decision respect the rights and duties of
everyone?
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The Decision-Making Process (11/11)
At all steps, check ethical reasoning! Ask these spotlight
questions:
• Justice
o
is the decision consistent with the canons of
justice?
• Caring
o
is the decision consistent with my responsibilities
to care?
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Issues in Managerial Decision-Making (1/6)
Issues in decision-making could include:
• Why do decision errors happen?
• How do we frame the problem?
• Heuristics are strategies for simplifying decisionmaking.
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Issues in Managerial Decision-Making Cont.
Availability Bias:
bases a decision on
recent information
or events
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Issues in Managerial Decision-Making Cont.
Representativeness Bias:
bases a decision on similarity to other
situations
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Issues in Managerial Decision-Making Cont.
Anchoring and
Adjustment Bias:
bases a decision
on incremental
adjustment from
a prior decision
point
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Issues in Managerial Decision-Making Cont.
Framing:
trying to solve
a problem in
the context
perceived,
positive or
negative
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Issues in Managerial Decision-Making Cont.
Confirmation
Error:
focusing on
information that
confirms a
decision already
made
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Issues in Managerial Decision-Making Cont.
Escalating
Commitment:
continuing a course
of action even
though it is not
working
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Issues in Managerial Decision-Making (4/6)
Creative Decision-Making:
• Creativity is the generation of a novel idea or unique
approach that solves a problem or exploits an
opportunity
o
Big-C: creativity occurs when extraordinary things
are done by exceptional people.
o
Little-C: creativity occurs when average people
come up with unique ways to deal with daily
events and situations.
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Issues in Managerial Decision-Making (5/6)
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47
Issues in Managerial Decision-Making (6/6)
The three types of situational creativity drivers
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Copyright
Copyright © 2021 John Wiley & Sons Canada, Ltd.
All rights reserved. Reproductions or translations of this work beyond that permitted by
Access Copyright (The Canadian Copyright Licensing Agency) is unlawful. Requests for
further information should be addressed to the Permissions Department, John Wiley &
Sons Canada, Ltd. The purchaser may make back-up copies for his or her own use only
and not for distribution or resale. The author and the publisher assume no responsibility
for errors, omissions, or damages caused by the use of these programs or from the use of
the information contained herein.
Copyright ©2021 John Wiley & Sons Canada, Ltd.
49
GMS200- Global Management
Chapter 8
Planning Processes and Techniques
Dr. Saeed (Sam) Nejatian LSSMBB
F2025
This slide deck contains animations. Please disable animations if they cause issues with your device.
Copyright ©2021 John Wiley & Sons Canada, Ltd.
Learning Objectives
• Identify the importance of planning and steps
in the planning process.
• List and give examples of the types of plans
used by managers.
• Discuss useful planning tools and techniques.
• Explain how goals and participation influence
planning success.
Copyright ©2021 John Wiley & Sons Canada, Ltd.
2
Base Cost (a.k.a. Shop Cost)
• Direct labour costs
• Direct materials costs
• Indirect costs (labour/material overheads)
• G/A cost such as Travel expenses, Contingencies,
facilities, others
3
The Product Life Cycle (PLC)
Ref: Wideman, R. M. (1995). Cost control of capital
projects. Richmond, BC: BiTech.
4
Why and How Managers Plan (1 of 6)
Planning
• The process of setting objectives and determining how
best to accomplish them
Objectives and goals
• Identify the specific results or desired outcomes that
one intends to achieve
Plan
• A statement of action steps to be taken in order to
accomplish the objectives
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5
Why and How Managers Plan (2 of 6)
Steps in the planning process:
•
•
•
•
•
Define your objectives
Determine where you stand vis-à-vis objectives
Develop premises regarding future conditions
Analyze alternatives and make a plan
Implement the plan and evaluate results
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6
Why and How Managers Plan (3 of 6)
The roles of planning and controlling in the management process
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7
Why and How Managers Plan (4 of 6)
Benefits of planning:
• Improves focus and flexibility
• Improves action orientation
• Improves coordination and control
• Improves time management
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8
Why and How Managers Plan (5 of 6)
Personal time management tips:
• DO say “no” to requests that distract from what you
should be doing
• DON’T get bogged down in details that can be
addressed later
• DO screen telephone calls, emails, and meeting
requests
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9
Why and How Managers Plan (6 of 6)
More personal time management tips:
• DON’T let drop-in visitors, text messaging use up your
time
• DO prioritize your important and urgent work
• DON’T become calendar bound by letting others
control your schedule
• DO follow priorities; do most important and urgent
work first
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10
Types of Plans Used by Managers (1 of 5)
Types of plans
• Long-term plans look three or more years into the
future
• Short-term plans typically cover one year or less
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11
Types of Plans Used by Managers (2 of 5)
Most of us
• 3-month time frame
A few of us
• 1 year time frame
Very few of us
• 20-year time frame
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12
Types of Plans Used by Managers (3 of 5)
Strategic plans: set broad, comprehensive, and longerterm action directions for the entire organization or a
major division
Vision: clarifies purpose of the organization and what it
hopes to be in the future
Tactical plans: specify how the organization’s resources
are used to implement strategy (often take the form of
functional plans)
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13
Types of Plans Used by Managers (4 of 5)
Functional plans: indicate how different components
within the organization will help accomplish the overall
strategy
• Production plans
• Financial plans
• Facilities plans
• Logistics plans
• Marketing plans
• Human resource plans
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14
Types of Plans Used by Managers (5 of 5)
Operational plans: describe short-term activities to
implement strategic plans
• Policies are standing plans that communicate broad
guidelines for decision making
• Procedures are rules that describe actions to be taken
in specific situations
• Budgets are single-use plans that commit resources to
projects or activities
o Zero based budgets allocate resources as if each
budget were brand new
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15
Planning Tools and Techniques (1 of 5)
Forecasting
• Attempts to predict the future
• Qualitative forecasting uses expert opinions
• Quantitative forecasting uses mathematical models
and statistical analysis of historical data and surveys
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16
Planning Tools and Techniques (2 of 5)
Contingency planning
• Identifying alternative courses of action to take when
things go wrong
• Contingency plans anticipate changing conditions
• Contingency plans contain trigger points to indicate
when to activate alternatives
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Contingency Planning
• Contingency Plan
• An alternative plan that will be used if a possible
foreseen risk event actually occurs.
• A plan of actions that will reduce or mitigate the
negative impact (consequences) of a risk event.
• Risks of Not Having a Contingency Plan
• Having no plan may slow managerial response.
• Decisions made under pressure can be potentially
dangerous and costly.
7–18
Planning Tools and Techniques (3 of 5)
Scenario planning
• A long-term version of contingency planning
• Identifying alternative future scenarios
• Plans made for each future scenario
• Increases organization’s flexibility and preparation for
future shocks
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Planning Tools and Techniques (4 of 5)
Benchmarking
• Use of external and internal comparisons to better
evaluate current performance
• Adopting best practices: things people and
organizations do that lead to superior performance
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20
Planning Tools and Techniques (5 of 5)
Staff planners
• Experts who assist in all steps of the planning process
Goal setting
• Using SMART goals will impact how performance
targets are achieved and provide motivation for such
achievements
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21
Implementing Plans to Achieve Results (1 of 6)
The five characteristics of great goals
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22
Implementing Plans to Achieve Results (2 of 6)
Goal alignment in a sample hierarchy of objectives
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23
Implementing Plans to Achieve Results (3 of 6)
Goal Alignment Between Team Leader and Team
Member
• Jointly plan: set objectives, set standards, choose
actions
• Individually act: perform tasks (member), provide
support (leader)
• Jointly control: review results, discuss implications,
renew cycle
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24
Implementing Plans to Achieve Results (4 of 6)
Participatory Planning
• unlocks the motivational potential of goal setting
• management by objectives (MBO) promotes
participation
• participation increases understanding and acceptance
of plan and commitment to success
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25
Implementing Plans to Achieve Results (5 of 6)
How participation and involvement help build commitment to plans
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26
Implementing Plans to Achieve Results (6 of 6)
Resilience
• even with the best made plans, unexpected events
can occur
• this may be seen as a traumatic events or an
opportunities to learn
• you can choose to see them as a challenge and not a
threat
• you can choose to be resilient, be optimistic, and face
your fears head on
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27
Copyright
Copyright © 2021 John Wiley & Sons Canada, Ltd.
All rights reserved. Reproductions or translations of this work beyond that permitted by
Access Copyright (The Canadian Copyright Licensing Agency) is unlawful. Requests for
further information should be addressed to the Permissions Department, John Wiley &
Sons Canada, Ltd. The purchaser may make back-up copies for his or her own use only
and not for distribution or resale. The author and the publisher assume no responsibility
for errors, omissions, or damages caused by the use of these programs or from the use of
the information contained herein.
Copyright ©2021 John Wiley & Sons Canada, Ltd.
28