KIN 464Exam # 2 Study Guide Lectures: 4 - 6Lecture 4 & 5 – Creative Problem Solving and Decision Making Problem Solving: is the process of taking corrective action to meet objectives /goals. Decision Making: is the process of selecting a course of action that will solve a problem Programmed Decisions: repetitive & routine - a decision influenced by some traditional habit or practice, a defined rule or set procedure, or policy/guidelines.  Non Programmed Decisions: apply to unusual problems or situations that are unique or have never occurred previously and often incorporate risk. Satisficing : when one selects the first alternative that meets some minimum standard of satisfaction.  Optimizing: when one searches for the optimum alternative  Brainstorming : A method to generate many ideas in a short period of time.  Usually a small group of people are presented with a problem, and asked to recommend solutions.  The purpose is to generate a large quantity of ideas, from which, one or two may be acceptable.  Synectics : Similar to brainstorming, with a leader to encourage the group to be more creative. Nominal Group Process: Each group member works alone to prepare a list of ideas or possible solutions to the problem.  Each member then presents his/her solutions to the group.  The group vote privately on each other’s ideas and rank order the solutionsI. Decision–Making Responsibility:a. Both Managers and employees make many decisionsb. Autonomy to make decisions depends on i. Individual’s level of authorityii. Nature and tradition of the organizationiii. Personalities of bosses, peers and employeesiv. Expectations or pressures placed on the managerc. Every decision should be based on what is good for the organizationd. Most difficult decisions involve conflicts between manager’s own desires and whatis best for the organizationII. Seven Steps in Rational Decision-making Approach (Structure)a. Step 1: Clearly identify the problem (not the symptom).i. “a problem defined is a problem half solved” ii. Your definition of the problem guides your solutionb. Step 2: List all the facts pertinent to the problemi. Be careful about limiting ideas based on limiting assumptionsii. Always be aware of paradigms (sacred cows) that we unconsciously cling to because our assumptions keep us in the box (assumption reversal)c. Step 3: List alternative courses of action to solve the problemd. Step 4: List advantages and disadvantages of each alternativee. Step 5: Review all of the abovef. Step 6: Draw conclusions, make recommendations and/or decisionsg. Step 7: Take action to solve problem. Follow-up after the decision has been implemented to ascertain if the desired results have been achieved Lecture 6 – Strategic Management Strategic Management: The process of managerial decision making and implementation of plans that directly affect the quality of performance and survival of an organization in the long term1) Strategic planning comprises the process of setting common purposes, goals, and objectives for the enterprise, breaking them up into specific plans and policies for the operating level and securing the necessary resources to put them into action.2) Strategic planning is the ‘management of change.’ It is a decision-making process based on empirical evidence and analytical studies, that provides the basic direction and focus of the enterprise.3) The process of determining an organization’s long-term goals and objectives in compliance with it’s mission and formulating the proper plan of action, (strategy), policies to insure sound decisions for using internal resources and environmental factors that affects all effort to achieve the desired end results in the long run. Program: is a statement of activities that need to be implemented to accomplish a plan Procedures: are a series of steps or tasks in a logical order which detail how specific results areto be obtained – parts of a program Policies: are general guidelines to influence the behavior of all personnel leaving room for flexibility and interpretation by management Control: function of measuring actual performance against the expected results or the desiredstandardI. The Strategic Planning Process:a. Define the goals and mission of the organizationb. Identify the long-term objectivesc. Review the existing strategy to achieve these goalsd. Evaluate current environmental factorse. Inventory the organization’s resourcesf. Identify strategic strengths and weaknesses of the organization through SWOT analysisi. Internal strengthsii. Internal weaknessesiii. External opportunitiesiv. External threatsg. Compare current strategy with current informationh. Formulate new strategy if neededi. Develop policies, procedures, and programs to accompany new strategyj. Implement and control the strategyDefine Goals & Mission of the Organizationo Goals provide sense of direction – what do we want to achieve?o Goals should be based on mission and uniqueness “edge” of the organization.o Examining what you are in your missionIdentify Long Term Objectiveso Purpose of strategic planning is to identify and formulate long term objectives.o Major influence is organization’s mission.o More specific than goals and more easily quantified.Review Existing Strategyo Answer the questions: What are the current objectives? What plans have been implemented to achieve these objectives? Is the current strategy compatible with existing resources, environmental factors, and current objectives? Do the end results meet the original objectives?Evaluate Current Environmental Factorso Evaluate external factors that can affect management’s plans - Environmental Analysiso Managers must be aware of changes in political, social, technological and economic areas to form sound strategyo Smell the Cheese “Who Moved my Cheese” You must be willing to adapt to change quicklyo What are the “Opportunities?o What are the Threats?Inventory Organization’s Resourceso People skills, abilities o Space (land locked or room for growth?)o Facilities, plant, equipmento Financeo Technology (technical knowhow)o You need to asses resources in order to adapt to changeIdentify Strategic Strengths & Weaknesses of the Organizationo Evaluate: internal Strengths & Weaknesses  external Opportunities & Threatso SWOT Analysiso What are our strengths (competitive