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Chapters6&7
PlanningandDecisionMakingLecture3Presentedby:Maya
SonjiMaya.sonji@.auPlanning+DecisionMakingStudyquestions:Howdomanagersplan?Whattypesofplansdomanagersuse?Whataretheusefulplanningtools,techniquesandprocesses?Howdomanagersmakedecisions?HowandwhymanagersplanPlanningTheprocessofsettingobjectivesanddetermininghowtoplishthem.Planninginvolvesdecidingexactlywhatyouwanttoplishandthebestwaytogoaboutit.TheRoleofthePlanningFunctionThePlanningProcessTherearefive
sequentialactionstepsinthesystematicplanningprocess:TypesofplansusedbymanagersShort-rangeandlong-rangeplansAruleofthumbisthatshort-rangeplanscover1yearorless,intermediate-range
planscoveroneto2yearsandlong-range
planslook3ormoreyearsintothefuture.Topmanagementsetlong-rangeplansanddirectionsfortheorganisationasawhole.Lowermanagementfocusmoreonintermediateandshort-rangeplansthatservethelong-termobjectives.TypesofplansusedbymanagersStrategicplansDefinelongtermneedsandsetactiondirectionsfortheorganisation.TacticalplansDevelopedandusedtoimplementstrategicplans.Theytendtobeintermediate-termplansthatspecifyhowtheorganisation’sresourcescanbeusedtoputstrategiesintoaction.TypesofplansusedbymanagersOperationalplansWhatneedstobedoneintheshorttermtoprogressstrategicobjectives.ProductionplansFinancialplansFacilitiesplansMarketingplansHumanresourceplansTypicaloperationalplansinanorganisationinclude:ConceptCheckingQuestions2-CarefullyspellingoutthespecificsoftheTVcampaign.Suchasdecidingonanappropriatemessage,whatchannelstoairthecommercialonandwhen,etc..1-ContactingChannel9andorganisingthetimeslotsandallocatingthebudgetrequiredtocommence3-Increasetargetmarketreachby5%byJune302015Re-organisetheseplansinorderofwhichplancomesfirst(i.e.whichistheStrategic,TacticalandOperationalplans)PoliciesandProceduresPolicyAstandingplanthatcommunicatesbroadguidelinesfordecisionsandaction.ProceduresPreciselydescribeactionsthataretobetakeninspecificsituations.Theydefinethemendedsequenceofeventsneededtoplishataskorasetoftasks.Planningtools,techniquesandprocesses:ForecastingQualitativeforecastingusesexpertopinionstopredictthefuture.Quantitativeforecastingusesmathematicalandstatisticalanalysisofdatabankstopredictfutureevents.Theprocessofmakingassumptionsaboutwhatwillhappeninthefuture.Planningtools,techniquesandprocesses:ScenarioPlanning Amongtheissuesandconcernsforscenarioplanningtodayaregeopoliticalchange,terrorism,climatechange,sustainabledevelopment,humanrightsandbiodiversity.Identifiesarangeofdifferentpossiblefuturescenariostohelporganisationsoperatemoreflexiblyandrespondmorerapidlyinuncertainandchangingenvironments.BenefitsofScenarioPlanningImproves
focusandflexibility
Improves*actionorientationImprovescoordinationImproves
timemanagementImproves
controlCreatesastateofreadiness
bybeingproactive?results-oriented—creatingaperformance-orientedsenseofdirection?priority-oriented—makingsurethemostimportantthingsgetfirstattention?advantage-oriented—ensuringthatallresourcesareusedtobestadvantage?change-oriented—anticipatingproblemsandopportunitiessotheycanbedealtwithinthebestway*Planningtools,techniquesandprocesses:ContingencyPlanningIdentifyingalternativecoursesofactionthatcanbeimplementedifandwhenanoriginalplanprovesinadequatebecauseofchangingcircumstances.Planningtools,techniquesandprocesses:BenchmarkingThepurposeofbenchmarkingistofindoutwhatotherpeopleandorganisationsaredoingverywellandthentoplanhowtoincorporatetheseideasintoyourorganisation’soperations.Atechniquethatmakesuseofexternalcomparisonstobetterevaluateanorganisation’scurrentperformanceandidentifypossibleactionsforthefuture.Instructions:In2minutes:
CreateaflyingobjectwiththeprovidedpaperObjectives:TheSMARTmodelManagementByObjectivesThepurposeofMBOistocreateagreementregarding:PerformanceobjectivesforagiventimeperiodPlansthroughwhichtheywillbeplishedStandardsofmeasurementProceduresforreviewingperformanceresults.(MBO)Structuredprocessofcommunicationinwhichamanager/teamleaderworkswithstafftojointlysetperformanceobjectivesandreviewresults.ManagementByObjectivesThreetypesofobjectivesmaybespecifiedinanMBOcontract:Improvementobjectivesdocumentintentionsforimprovingperformanceinaspecificway.Personaldevelopmentobjectivespertaintopersonalgrowthactivities;oftenthoseresultinginexpandedjobknowledgeorskills.Maintenanceobjectives
thatformallyexpressintentionstomaintainperformanceatanexistinglevel.PerformanceobjectivesinMBOTheDecisionMakingProcessThekeytomakingthebestdecisionsistohaveasmuchusefulinformationregardingtheenvironmentsthathasinfluencesandimplicationsoverourbusiness!PlanningandDecisionConditionsPeopleinorganisationsmakedecisionsundereachofthreedecisionconditions.Certainenvironmentswhichoffercompleteinformationonpossibleactionalternativesandtheirconsequences.Riskenvironmentswhichlackscompleteinformation,butoffers‘probabilities’ofthelikelyesforpossibleactionalternatives.Uncertainenvironmentswhichlackssomuchinformationthatitisdifficulttoassignprobabilitiestothelikelyesofalternatives.Whatisusefulinformationandhowcanwegetit?Thefiveessentialcharacteristicsofusefulinformationare:Timeliness:Theinformationisavailablewhenneeded;itmeetsdeadlinesfordecisionmakingandactionQuality:TheinformationisaccurateandreliableCompleteness:theinformationiscompleteandsufficient,currentanduptodateRelevance:theinformationisappropriatetothetaskathandanddoesnotcontainirrelevantinformationUn
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