BUS250 Chapter 5 - Planning and Decision Making

planning

choosing a goal and developing a strategy to achieve that goal

S.M.A.R.T. Goals

goals that are specific, measurable, attainable, realistic, and timely

goal commitment

the determination to achieve a goal

action plan

a plan that lists the specific steps, people, resources, and time period needed to attain a goal

proximal goals

short-terms goals or subgoals

distal goals

long-term or primary goals

options-based planning

maintaining planning flexibility by making small, simultaneous investments in many alternative plans

slack resources

a cushion of extra resources that can be used with options-based planning to adapt to unanticipated changes, problems, or opportunities

strategic plans

overall company plans that clarify how the company will serve customers and position itself against competitors over the next 2-5 years

purpose statement

a statement of a company’s purpose or reason for existing

strategic objectives

a more specific goal that unifies company-wide efforts, stretches and challenges the organization, and possesses a finish line and time frame

tactical plans

plans created and implemented by middle managers that direct behavior, efforts, and attention over the next 6 months - 2 years

management by objectives

a four-step process in which managers and employees discuss possible goals, collectively select goals, develop tactical plans, and meet regularly to review progress toward goal accomplishment

operational plans

day-to-day plans, developed and implemented by lower-level managers, for producing or delivering the organization’s products and services over a 30 day - 6 month period

single-use plans

plans that cover unique, one-time-only events

standing plans

plans used repeatedly to handle frequently recurring events

policies

standing plans that indicate the general course of action that should be taken in response to a particular event or situation

procedures

standing plans that indicate the specific steps that should be taken in response to a particular event

rules and regulations

standing plans that describe how a particular action should be performed or what must happen or not happen in response to a particular event

budgeting

quantitative planning through which managers decide how to allocate available money to best accomplish company goals

decision-making

the process of choosing a solution from available alternatives

rational decision-making

a systematic process of defining problems, evaluating alternatives, and choosing optimal solutions

assumed rationality

a principle that argues that people will think and act logically (instead of emotionally) and will maximize utility in decision-making

• Define the problem

• Identify the decision criteria

• Weigh the criteria

• Generate alternative courses of action

• Evaluate each alternative against each criterion systematically

• Compute the optimal decision

the six steps in rational decision-making

problem

a gap between a desired state and an existing state

decision criteria

the standards used to guide judgments and decisions

absolute comparisons

a process in which each decision criterion is compared to a standard or ranked on its own merits

relative comparisons

a process in which each decision criterion is compared directly with every other criterion

maximizing

choosing the best alternative

satisficing

choosing a “good-enough” alternative

groupthink

a barrier to good decision-making caused by pressure within the group for members to agree with each other

C-type conflict (cognitive)

disagreement that focuses on problem and issue-related differences of opinion; involves a willingness to examine, compare, and reconcile the differences to produce the best possible solution

A-type conflict (affective)

disagreement that focuses on individual or personal issues; results in hostility, anger, resentment, cynicism, and apathy, and undermines team effectiveness

devil’s advocacy

a decision-making method in which an individual or subgroup is assigned the role of critic

dialectical inquiry

a decision-making method in which decision makers state the assumptions of a proposed solution (thesis) and generate a solution that is the opposite (antithesis) of that solution

dialectics

a philosophical method of reaching the truth through reasoned argument of contradicting viewpoints (i.e. the thesis and antithesis)

nominal group technique

a decision-making method that begins and ends by having group members quietly write down and evaluate ideas to be shared with the group

Delphi technique

a decision-making method in which members of a panel of experts respond to questions and to each other until reaching agreement of an issue

brainstorming

a decision-making method in which group members build on each others’ ideas to generate as many alternative solutions as possible

electronic brainstorming

a decision-making method in which group members use computers to build on each others’ ideas and generate as many alternative solutions as possible

production blocking

a disadvantage of face-to-face brainstorming in which a group member must wait to share an idea because another member is presenting an idea

evaluation apprehension

the fear of what others will think of your ideas