BMGT364 notes for exam 2 11 28 2012 CHAPTER 5 PLANNING AND DECISION MAKING Planning choosing a goal and developing a strategy to achieve that goal Benefits of Planning Intensified effort Persistence Direction Creation of task strategies Pitfalls of Planning Can impede change and prevent or slow needed adaptation Create a false sense of certainty Detachment of planners plan for things they don t understand 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 the specific steps people resources and time period needed to accomplish a goal Proximal goals short term goals or sub goals Distal goals long term or primary goals Options based planning maintaining 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 change problems or opportunities five years Strategic plans overall company plans that clarify how the company will serve customers and position itself against competitors over the next two to Purpose statement a statement of a company s purpose or reason for existing often referred to as an organizational mission or vision Strategic objective a statement of a company s overall goals that unifies company wide effort toward its vision stretches and challenges the organization and possesses the finish line and a time frame Tactical plans plans created and implemented by middle managers that specify how the company will use resources budgets and people over the next six month to two years to accomplish specific goals within its strategic objective Management by objectives MBO four step process in which managers and employees discuss and select goals develop tactical plans and meet regularly to review progress toward goal accomplishment 1 discuss possible goals 2 select goals that are challenging attainable and consistent with the company s overall goals 3 develop tactical plans that lead to the accomplishment of tactical 4 meet regularly to review progress toward accomplishment of goals goals 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 to six month period Single use plans plans used repeatedly to handle frequently recurring events Policy a standing plan that indicates the general course of action that should be taken in response to a particular event or situation Procedure a standing plan that indicates 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 on 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 Problem a gap between a desired state and an existing state Decision criteria the standards used to guide judgments and decisions Absolute comparison a process in which each criterion is compared to a standard or ranked on its own merits Relative comparison a process in which each criterion is compared directly to every other Maximizing choosing the best alternative Satisficing choosing a good enough alternative Groupthink a barrier to good decision making caused by pressure within a group for members to agree with each other The group is insulted from others who might have different The group leader begins by expressing a strong preference for a perspectives particular decision The group has no established procedure for systematically defining problems and exploring alternatives Group members have similar backgrounds and experiences C type conflict cognitive conflict disagreement that focuses on problem and issue related differences of opinion A type conflict disagreement that focuses on individual or personal issues Devil s advocacy a decision making method in which an individual or a subgroup is assigned the role of critic Nominal group technique a decision making method that begins and ends by having group member quietly write down and evaluate ideas to be shared with the group on an issue Delphi technique a decision making method in which members of a panel of experts respond to questions and to each other until reaching agreement Brainstorming a decision making method in which group member build on each other s ideas to generate as many alternative solutions as possible The more ideas the better All ideas are acceptable no matter how wild or crazy they might Other group members ideas should be used to come up with even seem more ideas Criticism or evaluation of ideas isn t allowed Electronic brainstorming a decision making method in which group members use computers to build on each others ideas and generate many alternative solutions is presenting an idea Production blocking a disadvantage of face to face brainstorming in which a group member must wait to share an idea because another member Evaluation apprehension fear of what others will think of your ideas Chapter 6 ORGANIZATIONAL STRATEGY Resources the assets capabilities processes information and knowledge that an organization uses to improve its effectiveness and efficiency create and sustain competitive advantage and fulfill a need or solve a problem Competitive advantage providing greater value for customers than competitors can Sustainable competitive advantage a competitive advantage that other companies have tried unsuccessfully to duplicate and have for the moment stopped trying to duplicate Valuable resources resources that allow companies to improve efficiency and effectiveness competing firms Rare resources resources that are not controlled or possessed by many Imperfectly imitable resources resources that are impossible or extremely costly or difficult for other firms to duplicate Nonsubstitutable resources resources that produce value or competitive advantage and have no equivalent substitutes or replacements Competitive inertia a reluctance to change strategies or competitive practices that have been successful in the past Strategic dissonance a discrepancy between a company s intended strategy and
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