Understanding Planning & Decision Making: Creating Effective Plans & Decisions, Lecture notes of Decision Making

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Unit 3

POM

Planning and Decision

Making

Planning and Decision Making

• Nature & Definition of Planning- Koontz o’Donnel, Hart, Alfred & Beaty
• Importance and limitations
• Planning process
• Types of Plans- on the basis of use, functions, time (meaning only)
• Meaning of Decision making
• Steps in decision making
• Types of decisions- Programmed-Non-programmed; Strategic-tactical, Individual-Group, Policy-Operation, Organizational-Personal

Definitions of Planning

• According to Koontz and O'Donnell, - "Planning is deciding in advance what to do, how to do it, when to do it, and who is to do it. Planning bridges the gap between where we are and where we want to go. It makes it possible for things to occur which would not otherwise happen”.
• According to George R Terry, - "Planning is the selecting and relating of facts and the making and using of assumptions regarding the future in the visualization and formulation of purposed activities believed necessary to achieve desired results".

Need of Planning

• For survival and growth
• To face new problems/difficulties
• To face challenges created by changing environmental factors/forces.
• Planning is the core of the whole management process.
• To ensures accuracy, economy and operational efficiency in business management.

Planning Process

Components of Planning

Standing Plan:

1. Mission
2. Objectives
3. Policies
4. Procedure
5. Rules and Methods
6. Strategies Single-Use Plans:
   1. Programme
   2. Projects
   3. Schedules
   4. Budgets
   5. Standards

Examples

1. Business or Divisional Plans.
2. Functional Plans.
3. Geographic or Regional Plans.
4. Corporate Plan.
5. Long, medium and short-range plans. Long- range plans extend to 10 or 20 years ; medium-range plans extend to 5 years and short-range plans generally extend to one year

Steps of Decision Making Process

• Step 1: Identification of the purpose of the decision
• Step 2: Information gathering
• Step 3: Principles for judging the alternatives
• Step 4: Brainstorm and analyse the different choices
• Step 5: Evaluation of alternatives
• Step 6: Select the best alternative
• Step 7: Execute the decision
• Step 8: Evaluate the results

Types of Decision Making

• Decision Levels
• Types of Decision Making: Styles
• Types of Decision Making: Process

Why Do We Get So Many Decisions

Wrong?

1. adequate participation of stakeholders in the decision making process;
2. sufficient time spent generating a range of possible solutions.
3. A third reason : “too often, managers make bad tactical selections

Group Decision Making Methods

• Directive
• Consultative
• Participative
• Delegative

Common group decision making

Conditions:

• Consensus
• Authority
• Majority
• Minority
• No Response
• Group Think
• Risky Shift

Intuition and Decision Making

As managers trained or educated to be rational thinkers, we may be wary of combining intuition and decision making. However, academic research into decision making theory indicates there is a sound logic in reconciling the two