Planning and Decission Making

  Planning and

Decission Making

Week 3 Dr. Ananda Sabil Hussein

  Steps in Planning 

Choose goals

   Identify actions 

Allocate responsibility

  

Review Performance

   Make adjustments

  Unit plans (heads of departments, teams, individuals

  

Levels of Planning

  Operating plans (heads of functions) Business-level strategic plan

  (heads of businesses)

  S ha pe d b y i np ut fro m

  Se ts th e c on te xt fo r

  Corporate-level Strategic plan (CEO) 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 teams, or individuals.

  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

about the future.

  Scenario Planning Formulate plans to deal

  Invest in one Identify different Possible futures with those plan but …

  (scenarios) futures

  Switch strategy if Hedge your bets tracking of signposts by preparing for shows alternative other scenarios scenarios becoming and … more likely

Question

  

Can scenario planning

apply and be useful to

you as a student? Explain. Develop three scenarios for your post-

graduation future and

possible plans to deal

with them.

  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 _{Source:www.valuebasedmanagement.net} only

   Not using an experience facilitator

The Strategic Planning Process

  Feedback Mission, vision, values, and goals

  SWOT analysis formulate strategies Draft action plans

  Implement Review progress against plan

  External analysis (opportunities and threats)

  Internal analysis (strengths and weaknesses)

  Assign subgoals, roles, responsibilities, timelines, and budgets 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 organization attempts to utilize.

  Mission Checklist

   Ends, not means

   Efort  Verbs  Nouns embodying activities

   The

   Brevity

   Broad vs. narrow

   Value added  Unique

  Source: raise-funds.com Characteristics of Goals  They are precise and measurable.

  

 They address important issues.

   They are challenging but realistic.

  

10 Ingredients for Successful

Goals

   Specifc

   Simple

   Signifcant

   Strategic

   Rational 

  Measurable 

  Tangible 

  Written 

  Shared  Consistent with your values _{Source:www.topachievement.com}

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.

   Planning enables managers to better control the organization.

  Countering the Pitfalls of Planning

  Too centralized; top-down Failure to question assumption

  Failure to implement Failure to anticipate rivals’ actions

  Decentralized planning Scenario planning; devil’s advocate

  Link to goals; tie to budgets Role-playing

  Solution

Pitfal l

The Rational Decision-Making Model

  Identify the problem Identify decision criteria

  Weight criteria Generate alternative courses of action

  Choose one alternative Implement alternative

  Continue with course of action Evaluate outcome

  Does not meet expectations Meets 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 of a particular performance variable rather than its theoretical maximum.

  

Decision-Making Heuristics

and Cognitive Biases

  

Decision heuristics

  

  80-20 rule

   Cognitive bias  Prior hypothesis bias 

  Framing 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 _{Source: Family Practice Management, September 2000} don't like doing.

   Smiling.

  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.

   Identifying a reference class of

Outside view:

  analogies past strategic initiatives, determining whether

those initiatives succeeded or failed, and evaluating a

project at hand against those prior initiatives.