1. The Manager as a Planner and Strategist

2. Managerial Objectives and Planning If you don’t know where you are going, any road will take you there

3. 3 types of managers - Those who MAKE things happen. - Those who WATCH things happen. - Those who WONDER what happened.

4. What is Decision Making - Process by which managers make a choice between two or more alternatives to solve a problem. - 4 elements to decision making: - An Objective - The Alternatives - The Choice - The Consequences

5. Types of Decision Making ► Programmed – routine, almost automatic process  Follows established rules ► Non-Programmed – unusual situations that have not often been addressed  Responds to unusual opportunities and threats.

6. Conditions Affecting managerial Decisions ► Certainty – very rare, manager knows exactly what will happen. ► Risk – use of probabilities, outcome can be estimated. ► Uncertainty – nothing is known, alternatives are not known, can’t assign probabilities

7. Decision Making Steps – Classical Model ► 1. Recognize need for decision: sparked by an event either internally or externally. ► 2. Developing objective and criteria: what will be the most important when evaluating alternatives. ► 3. Generate alternatives: managers must develop feasible alternative courses of action ► 4. Evaluate alternatives: what are the advantages and disadvantages of each alternative? ► 5. Choose among alternatives: identify all relevant information for decision ► 6. Implement chosen alternative: managers must now carry out the alternative ► 7. Learn from Feedback: managers should consider what went right and what went wrong with the decision and learn for the future.

8. Assessing Alternatives ► Is it practical? ► Is it economically feasible? ► Is it ethical? ► Is it legal?

9. Decision Making Challenges ► Ease of recall: make judgment based on recent event ► Insensitivity to base rates: disregard information that suggests likelihood of a particular outcome in the presence of other information ► Anchoring: use an initial value from prior experience and give it a strong weight in the final decision. ► Escalation of commitment: increase in time, increase in commitment.

10. Improved Group Decision Making ► Devil’s Advocacy: one member of the group acts as the devil’s advocate (defends unpopular alternative) ► Dialectical inquiry: 2 different groups are assigned to problem and each groups evaluates the other’s alternatives ► Promoting diversity: by increasing diversity in a group, wider set of alternatives may be considered.

11. Building Group Creativity ► Brainstorming: managers meet face-to-face to generate and debate many alternatives. ► All alternatives are listed:  Be creative and radical in stating alternatives  When all are listed, then the pros and cons of each are discussed and a short list created.

12. Building Group Creativity ► Nominal Group Technique: Provides a more structured way to generate alternatives in writing.  Similar to brainstorming except that each member is given time to first write down all alternatives  Alternatives then read aloud without discussion  Then discussion occurs and alternatives are ranked (ranked individually)  Final decision rests with the number of votes each alternative receives. ► Delphi Technique: provides for a written format without having all managers meet face-to-face  Problem is distributed in written form to managers who then generate written alternatives  Responses are received and summarized by top managers  Results are sent back to participants for feedback, and ranking; the process continues until consensus is reached.

13. Goals ► Depending on where you “sit,” your goals can be quite different Organization --- Maximize Profits Employees --- Higher Wages Customers --- Quality Products Owners --- Higher Dividends Management --- Promotions

14. Goals and Strategies ► Objectives for performance ► The starting point of successfully managing a business ► The planned method of reaching a goal is the “strategy”

15. Goals vs. Objectives ► Goals: long-term desired results ► Objectives: short-term “rungs of the ladder” one must achieve in order to reach long- term goal

16. Planning ► Decision making process that focuses on the future of an org., and how to achieve goals ► Identifying the objectives to be attained and the ways to realize them ► Results in company strategy

17. Why Plan?

18. Planning Process Stages 1.) Organizational vision, mission, and goals 2.) Formulating strategy 3.) Implementing strategy

19. Types of Plans 1.) Strategic (2-10 years) broad plans prepared by top level mgrs. how to achieve long term goals 2.) Tactical (1 year) short term plans born from a strategy 3.) Operational (month, week, day) very detailed short range plans prepared by first level mgrs.