Planning and Decision
Making Process
(Text Book Chapters – 7 & 8)
Issue # 1
Principles of Management / BSG – 201
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1
Planning: Nature, Process,
Objectives and Strategies
Benefits and Pitfalls of Planning
How to Make a Plan That Works?
Decision Making
Issue # 1
Principles of Management / BSG – 201
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2
Choosing a
goal and
developing a
method of
strategy to
achieve that
goal
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The organization’s
• Purpose
Issue # 1
• Mission
• Values
• Directions
Strategic goals
Strategic plans
Tactical goals
Tactical plans
Operational goals
Operational plans
Principles of Management / BSG – 201
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► To provide direction
► To reduce uncertainty
► To Minimize waste
► To Set the standards
for controlling
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Benefits
of Planning
Persistence
Direction
Creation
of Task
Strategies
Intensified
Effort
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Pitfalls
of Planning
False Sense
of Certainty
Impedes Change
and Adaptation
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Detachment
of Planners
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Set
Goals
Develop
Commitment
Develop
Effective
Action
Plans
Track
Progress
Toward
Goal
Maintain
Flexibility
Achievement
Revise existing plan
or
Begin new planning process
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S.M.A.R.T.
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Specific
Measurable
Attainable
Realistic
Timely
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Set…
Gather and provide…
Proximal Goals
Performance
Feedback
Distal Goals
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Issue # 1
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2 Years
Plans
Strategic
Tactical
5 Years
6 months
2 years
30 days
Operational
6 months
0
1
2
3
4
5
6
Years
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 Total cost of a plan
 Projected levels of:
 Inventory
 Output
 Employment
 Subcontracting
 Backordering
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
Proactive
 Alter demand to match capacity

Reactive
 Alter capacity to match demand

Mixed
 Some of each
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Porter’s Five
Forces Model
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SWOT
Analysis
BCG
Matrix
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Issue # 1
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Issue # 1
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Issue # 1
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Issue # 1
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Decision Making
Means:
The process of choosing
a solution from
available alternatives.
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Rational Decision
Making
A systematic process of
defining problems,
evaluating alternatives, and
choosing optimal solutions.
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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 decision
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Bounded Rationality
A decision-making process
restricted in the real world by:
 Limited resources
 Incomplete and imperfect
information
 Managers’ limited decisionmaking capabilities
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Structured
Conflict
Delphi
Technique
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Nominal
Group
Technique
Stepladder
Technique
Brainstorming
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Cognitive conflict.
C-Type Conflict
Disagreement that focuses on
problem and issue-related
differences of opinion
Affective conflict.
A-Type Conflict
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Disagreement that focuses on
individuals or personal issues
Principles of Management / BSG – 201
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Steps to Establish Nominal Group Technique
1. During a “quiet time,” group members write down
as many problems and solutions as possible
2. Each member shares one idea at a time
3. Ideas are posted on flipcharts until all ideas are shared
4. Group discusses advantages/disadvantages
5. Ideas are ranked during a second “quiet time”
6. Members read rankings aloud, and the idea with the
highest average rank is selected
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Steps to Establish Delphi Technique
1. Assemble a panel of experts.
2. Create a questionnaire of open-ended questions.
3. Summarize the responses and feed back to the panel
until the members reach agreement.
4. Create a brief report and send to the panel members for
agreement/disagreement.
5. Continue the feedback process until panel reaches
agreement.
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Step 3
Member 4 Joins Group
Shares thoughts, ideas,
recommendations
Members 1, 2, & 3
Share previous
thoughts, ideas,
recommendations
Discussion is Held and
Tentative Group
Decision is Made
Step 2
Member 3 Joins Group
Shares thoughts, ideas,
recommendations
Members 1 & 2
Share previous
thoughts, ideas,
recommendations
Discussion is Held and
Tentative Group
Decision is Made
Step 1
Member 1
Shares thoughts, ideas,
recommendations
Member 2
Shares thoughts, ideas,
recommendations
Discussion is Held and
Tentative Group
Decision is Made
Adapted From Exhibit 5.13
Issue # 1
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Four Rules of Brainstorming
1. The more ideas, the better.
2. All ideas are acceptable, no matter
how wild or crazy.
3. Other group members’ ideas should be used
to come up with even more ideas.
4. Criticism or evaluation of ideas is not allowed.
Issue # 1
Principles of Management / BSG – 201
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Issue # 1
Principles of Management / BSG – 201
Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved - Edited by Dr. Naseer Khan
30