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How Managers Make Things Happen
Planning + Individual & Group Decision Making: How Managers Make Things Happen McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
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Planning
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Planning Planning: (which we previously defined as) setting goals and deciding how to achieve them. Another definition: Planning is coping with uncertainty by formulating future courses of action to achieve specified results
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Planning & Strategic Management
Planning and strategic management derive from an organization's mission and vision about itself.
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How Planning Helps You: Four Benefits
Planning Helps You Check on Your Progress Planning Helps You Coordinate Activities Planning Helps You Think Ahead Planning Helps You Cope with Uncertainty
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FUNDAMENTALS OF PLANNING
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Mission & Vision Statements
The Mission Statement: “What Is Our Reason for Being?” An organization's mission is its purpose or reason for being. Determining the mission is the responsibility of top management and the board of directors. Clear mission makes clear objectives Whether the organization is for-profit or nonprofit, the mission statement identifies the goods or services the organization provides and will provide.
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Mission & Vision Statements
The Vision Statement-"What Do We Want to Become?" A vision is a long-term goal describing what an organization wants to become, where it wants to go strategically (the future and the actions needed to get there)
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Example: Amazon’s Mission & Vision
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Three Types of Planning for Three Levels of Management: Strategic, Tactical, & Operational
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Goals A goal, also known as an objective, is a specific commitment to achieve a measurable result within a stated period of time. Goals Type Who set them Focus Strategic goals set by and for top management focus on objectives for the organization as a whole. Tactical goals set by and for middle managers focus on the actions needed to achieve strategic goals. Operational goals set by and for first-line managers Concerned with short-term matters associated with realizing tactical goals
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SMART Goals a SMART goal is one that is: Specific Measurable
Attainable Results-oriented has Target dates
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Decision Making
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Major Questions You Should Be Able to Answer
- How do people know when they’re being logical or illogical? - How can I improve my decision making using business analytics? - How do I decide to decide? - What guidelines can I follow to be sure that decisions I make are not just lawful but ethical? - How do I work with others to make things happen?
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Decision Making Decision Decision making
choice made from among available alternatives Decision making process of identifying and choosing alternative courses of action Decision making approaches: A rational model Nonrational models
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Rational Decision Making
Rational model of decision making explains how managers should make decisions assumes managers will make logical decisions that will be optimum in furthering the organization’s interest also called the classical model Successful Implementation - Plan carefully Be sensitive to those affected Evaluation - What should you do if action is not working? Give it more time Change it slightly Try another alternative Start over
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Rational Decision Making stages
Figure 7.1
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Nonrational Decision Making
Nonrational models of decision making assume that decision making is nearly always uncertain and risky, making it difficult for managers to make optimal decisions Three nonrational models: Bounded Rationality & the Satisficing Model Incremental Intuition.
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Bounded Rationality & the Satisficing Model
suggests that the ability of decision makers to be rational is limited by numerous constraints For example: complexity, time and money, cognitive capacity Satisficing Model managers seek alternatives until they find one that is satisfactory, not optimal
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Incremental Model Incremental Model
managers take small, short-term steps to alleviate a problem, rather than steps that will accomplish a long-term solution.
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Intuition Model Intuition
making a choice without the use of conscious thought or logical inference sources are expertise and feelings
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Analytics Analytics sophisticated forms of business data analysis
portfolio analysis, time-series forecast also called business analytics
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Decision-Making Styles*
A decision-making style reflects the combination of how an individual perceives and responds to information. Figure 7.3
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Advantages and Disadvantages of Group Decision Making
Greater pool of knowledge A few people dominate or intimidate Better understanding of decision rationale Groupthink Deeper commitment to the decision Satisficing Intellectual stimulation Goal displacement
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