1. Chapter 5 Planning and Decision Making

3. Planning 1 Planning Choosing a goal and developing a method of strategy to achieve that goal

4. Benefits of Planning 1.1 Benefits of Planning Creation of Task Strategies Intensified Effort Direction Persistence

5. Pitfalls of Planning 1.2 Pitfalls of Planning Detachment of Planners Impedes Change and Adaptation False Sense of Certainty

6. How to Make a Plan That Works 2 Set Goals Develop Commitment Develop Effective Action Plans Track Progress Toward Goal Achievement Maintain Flexibility Revise existing plan or Begin new planning process

9. Developing Effective Action Plans An Action Plan Lists… 2.3 Specific Steps People Resources Time Period

10. Tracking Progress Set… Proximal Goals Distal Goals Gather and provide… Performance Feedback 2.4

12. Planning from Top to Bottom Adapted from Exhibit 5.5 First-Level Managers Middle Top Managers 3 Purpose Strategic Objectives Tactical Plans, MBO Operational, Standing, Single-Use Standing Plans Operational Plans Single-Use Plans Tactical Plans, MBO Strategic Objectives Purpose

13. Starting at the Top 3.1 Strategic Plans Clarify how the company will serve customers and position itself against competitors (2-5 years) Purpose Statement a statement of a company’s purpose or reason for existing Strategic Objective A more specific goal that unifies company-wide efforts, stretches and challenges the organization, and possesses a finish line and a time frame

14. Planning Time Lines 3.1 Years 0 1 2 3 4 5 6 Plans Strategic Tactical Operational 5 Years 2 years 30 days 6 months 6 months 2 Years

15. Avon’s Vision and Values Exhibit 5.7 3.1

17. Finishing at the Bottom Operational Plans Day-to-day plans for producing or delivering products and services over a 30-day to six-month period 3.3

18. Kinds of Operational Plans 3.3 Single-Use Plans Plans that cover unique, one-time-only events Standing Plans Plans used repeatedly to handle frequently recurring events. Three kinds are: policies, procedures, and rules and regulations. Budgets Quantitative planning to decide how to allocate money to accomplish company goals

20. What Is Rational Decision Making? 4 Decision Making The process of choosing a solution from available alternatives. Rational Decision Making A systematic process of defining problems, evaluating alternatives, and choosing optimal solutions.

21. Steps to Rational Decision Making 4 Define the problem Identify decision criteria Weight the criteria Generate alternative courses of action Evaluate each alternative Compute the optimal decision 1 2 3 4 5 6

25. Steps to Rational Decision Making Absolute Weighting of Decision Criteria 4.3

26. Steps to Rational Decision Making Relative Weighting of Decision Criteria 4.3

30. PLUS—A Process for Ethical Decision Making DOING THE RIGHT THING 4 Policies Legal Universal Self P L U S

32. Limits to Rational Decision Making 4.7 Maximize Satisfice