Planning 6th Sep

1. By the end of this class you will have
 Gained an understanding of the decision making and
planning process
 Considered your own decision making preferences
 Considered different decision making models
 Considered strategic and operational planning
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2. A Very Simple View of the
Management Process
Planning
. ..the direction
Controlling Organising
...ensuring all goes ...the resources
well to coordinate
Leading
...getting the people to
make the effort
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3. But what did you find out in A
Day in the Life exercise?
 Did the labels describe the reality of managerial work?
 Did your DIL manager talk about their ‘planning’ and
leading’ roles?
 Do managers act out such roles, putting on different hats?
e.g. on goes the planning hat?
 Of course they set aside time for planning, say a project
meeting but how often?
 Do they look to see if their plans are on course ie control?
 Managing in SME is informal, talking, developing
relationships, ‘fighting fires’, trying to motivate the
‘reluctant.’
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4. Individual decision-making
Starts with need to know e.g. How are we going to present
our case? What alternative ways could we use?
Consider the options
 Criteria for making our decision e.g. time available
 Rank options
 Decide
 Did we set out to satisfice or optimise?
 Then the Doing stage

5. How do you make decisions?
 What is your ‘plan’ for the rest of the day?
 What decisions do you have to make today? This week?
 What are your plans for the next six weeks?
 For the exams?
 For the coming summer ( it will arrive)?
 What is your plan for your degree?
 For 2012? Beyond?
 What career plans do you have?
 What criteria do you apply?
 How do you go about planning?
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6. How do you pull information together to
make decisions?
 Are you a ‘picture person’ or a list ‘person’?
 Do you use a wall planner?
 Do you use a spreadsheet like Excel?
 Or do you keep it all in your head or rely on your diary?
 How do you weigh up different alternatives? What criteria
do you use? For example, holiday vs chance to earn cash for
next semester?
 Are you an ‘intuitive’ decision makers or a ‘rational’
decision maker?
 How do you go about making personal decisions? e.g.
alcohol?
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7. Steps in the Decision Making Process
Identify
the problem [or opportunity]
Generate alternative
solutions
Evaluate possible
solutions
Choose an alternative
Implement
Evaluate results (decision
effectiveness)
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8. The Rational Decision Making Model
Identify the problem Assumes all information
and list alternatives is available to manager
& consequences
Rank each alternative Assumes manager can
from low to high process information
Assumes manager knows
Select best the best future course of
alternative the organization
Classical DM model see text p 75 8

9. Behavioural Model: Satisficing
Identify the problem Time constraints
Limited ability to
understand all factors
Seek an alternative Inadequate base
only until finding one
of information
that is satisfactory
Limited memory of
Decision makers
May not be Poor perception of factors
Optimal decision To be considered
In decision process
Administrative DM model
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10. Limitations to Decision-making
 Bounded Rationality: the ability of managers to make
rational decisions is limited by factors such as
cognitive ability and time constraints
 Incomplete information: always inaccurate,
ambiguous or incomplete
 Satisficing model: manager seeks alternatives until
find one “good enough” rather than finding the
optimal alternative
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11. The Planning Process
Planning is about deciding what to
accomplish and how to do it
SMART objectives:
 Specific
 Measurable
 Attainable
 Realistic
 Time bound
Types of Plans
Short-Range Long-Range
Operational Strategic
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12. Objectives drive everything. . .
 Example
 Your tutorial case presentation
 What are our objectives?
 1. Your COMMUNICATION objectives
 2. Your ACTION objectives
 What do you want the other students to go away knowing?
 What objectives drive your analysis and presentation?
 They are the ‘acid’ test: were we successful, did we achieve
our objectives?
 Do we need to state them? YES.
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13. Types of plans
 Strategic
 Long-term e.g. 5-10 years
 Concerned with overall direction, the ‘big picture’
 Impact of the environment on the organisation
 Top driven
 Needs accurate, comprehensive information based on
research
 Long lead time before feedback
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14. Operational
 Turning the strategy into reality
 e.g. production planning
 human resource planning
 Lower level
 More immediate feedback e.g. customer satisfaction
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15. Why is planning difficult?
 Incomplete information
 Cost of obtaining additional information
 Assumptions we make e.g. rationality
 Lack of control over externalities e.g. earthquake
 Power dynamics in organisations e.g. a difficult
student in your group
 The human element e.g. never certainty
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16. Is planning more difficult today than
20 years ago?
 Rapid change
 Turbulent environments e.g global warming
 Changing technology e.g information revolution
 Increased competition e.g FTA with China
 Globalisation e.g Fisher & Paykel decision to relocate
to Thailand
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17. What the planning process is
not…
‘A plan is not a strategy, an
intention is not a plan.’
 Critically discuss this statement with the regard to the
planning process