1. 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.

2. Planning

3. 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

4. Planning & Strategic Management
Planning and strategic management derive from an organization's mission and vision about itself.

5. 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

6. FUNDAMENTALS OF PLANNING

7. 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.

8. 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)

9. Example: Amazon’s Mission & Vision

10. Three Types of Planning for Three Levels of Management: Strategic, Tactical, & Operational

11. 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

12. SMART Goals a SMART goal is one that is: Specific Measurable
Attainable
Results-oriented
has Target dates

13. Decision Making

14. 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?

15. 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

16. 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

17. Rational Decision Making stages
Figure 7.1

18. 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.

19. 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

20. Incremental Model Incremental Model
managers take small, short-term steps to alleviate a problem, rather than steps that will accomplish a long-term solution.

21. Intuition Model Intuition
making a choice without the use of conscious thought or logical inference
sources are expertise and feelings

22. Analytics Analytics sophisticated forms of business data analysis
portfolio analysis, time-series forecast
also called business analytics

23. Decision-Making Styles*
A decision-making style reflects the combination of how an individual perceives and responds to information.
Figure 7.3

24. 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