1. Mgt 101
Planning

2. Decision Making Process
Identification of a problem
Decision – A choice from
Identification of Decision Criteria two or more alternatives
Allocation of weights to criteria Decision Making Process – A
set of eight steps that
Development of alternatives include identifying a
problem, selecting an
alternative and evaluating
Analysis of Alternatives
the decision’s effectiveness.
Selection of an Alternative
Problem – A discrepancy
between an existing and a
Implementation of the Alternative desired state of affairs.
Evaluation of Decision Effectiveness

3. Making Decisions
Rational Decision Making – Decision-making
behaviour where choices are consistent and
value-maximizing within specified constraints.
Intuitive decision making – Making decisions on
the basis of experience, feelings and accumulated
judgment.
Programmed Decision – A repetitive decision that
can be handled by a routing approach.

4. Decide?
Structured Problems – Straightforward, familiar, and
easily defined problems.
Procedure – A series of interrelated sequential steps that
can be used to respond to a well-structured problem.
Rule – An explicit statement that tells managers what
they can or cannot do.
Policy – A guideline for making decisions.

5. Decision Making Conditions
Certainty – A situation in which a manager can
make accurate decisions because all outcomes
are known.
Risk – A situation in which the decision maker is
able to estimate the likelihood of certain
outcomes.
Uncertainty –A situation in which a decision maker
has neither certainty nor reasonable probability
estimates available.

6. Common Decision-Making Errors
Anchoring Effect – Describes when decision makers
fixate on initial information as a starting point
and then, once set, fail to adequately adjust for
subsequent information.
Selective Perception Bias – Decision makers
selectively organize and interpret events based
on their biased perceptions.
Availability Bias – Decision makers tend to
remember events that are the most recent and
vivid in their memory.

7. Common Decision-Making Errors
• Self serving
• Overconfidence
• Immediate Gratification
• Randomness

8. Types of Plans

9. Plans
Strategic Plans – Plans that apply to the entire
organization, establish the organization’s overall goals
and seek to position the organization in terms of its
environment.
Operational Plans – Plans that specify the details of how
the overall goals are to be achieved.
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Long-term – Plans with a time frame beyond 3 years.
Short-term – Plans covering 1 year or less.

10. What is Planning?
Defining organization’s goals, establishing overall
strategy and developing plans.
Reasons:
1. Provides Direction
2. Reduces Uncertainty
3. Minimizes waste and redundancy
4. Establishes goals and objectives
5. Is associated with positive financial results.