Decision Making and Planning : Assignment

Planning and Decision Making
Types of Plans
Framework -
Mission is the purpose of the organization and the reason the organisation has been established.
Vision is the long term goal of the organisation. It indicates the future direction of the organisation
Strategic -
Strategic planning is the overall organisational plan of the business. It illustrates how the organisation plans to
serve their customers and how the organisation will place themselves in the market. This runs for about 2 to 5
years and it is settled by top management.
Tactical-
Tactical plans explain how the organisation will allocate and utilize its resources, finances and budgets. This
plan allocates goal setting to individuals in the organisation. Its duration is about 6 months to 2 years and it is
created by middle-line managers.
Operational-
Operational planning is a daily plan that usually consists of the production and distribution of products. This
plan usually has a duration of about 30 days to 6 months and is set by front-line managers.
Fixed Plans-
Fixed plans are plans that are repeated for recurring events
Policy is a guideline to follow when an event occurs
Procedure is the action steps to be taken
Regulations are rules on the guidelines for the action steps taken for an event
Decision making process

-Identify and Diagnose problem
-Generating alternative solutions
-Evaluate alternative solutions
-Making the choice
-Implementing
-Evaluation
Formal Planning Steps
Situational Analysis-
Analyse external environment - Create forecasts about all elements of the organisation. Study the
environmental uncertainty that the organisation may face
Assess internal resources - See the availability of resources within the organisation. If resources are not
enough , acquire new resources or change action plan
Alternative Goals and Plans-
Set goals - Targets that the business wants to reach
Set plans - Action steps to take to achieve goals
Identify several alternatives - be creative, broaden ideas
Goals have to be Specific (everyone knows what goal to work towards), Measurable (quantifiable so that
employees can understand better), Attainable ( if it is unachievable employees will be demotivated), Relevant
(should contribute to mission) and Timely (a target date should be set)
Goal and Plan Evaluation-
Each Alternative goals and plans should be studied carefully. The advantages and disadvantages of each should
be taken into consideration; And some goals may be prioritized over others
Goal and Plan Selection-
After evaluating all the alternative goals and plans, the manager has to decide which goal is the most feasible
and related to the organisations framework. A more detailed plan can then be created. Accountability for each

section of the plan can be set, as well as sequence of each part of the plan and its timing - a GANTT chart can
be used.
Implementation-
The chosen plan should now be implemented into the organisation. The plan must be clearly communicated to
employees at all levels. Employees must be motivated to follow through with the plan. The usage of budgets as
well as rewards systems can help to set a better implementation of the plan.
Monitoring and Controlling -
Planning is a cycle, it is a repetitive process. Therefore, it is important that the progress of the plan is closely
monitored to ensure that the set goals are met. A control system should be developed in order to allow
corrective action if need be. 3 critical factors to monitor is - Progress of plan, Level of support, Level of
resistance
Cognitive Bias in Decision Making
Overconfidence Bias -
Decision makers may make the mistake of being too overconfident when assuming that they are able to
forecast possible future events. This will affect decision making badly ad decisions may be made based on
assumptions from overconfidence rather than real, relevant information. (risky behaviour, faulty decision
making)
Hindsight Bias-
Decision makers may also assume that events are more predictable than they actually are. This will lead to
setting decisions based on past experiences of events that may not be exactly the same, rather than based on
the required correct information on the situation. A bad decision may be made if the event is not exactly the
same as a decision maker experienced before.
Anchoring-

Decision makers often have the tendency to rely too much on one piece of information when making decisions
instead of putting the effort to investigate further to uncover further relevant information. This tendency will
lead to faulty decisions as well as lost opportunities.
Framing Bias-
Another issue that may be faced while decision making is that the way in which a situation is presented can
have a strong influence on the decision that is made. This may lead to bad decision as the way a problem is
framed may be inaccurate.
Escalation of Commitment-
People proceed on a failing course of action because they already invested in it. Managers may fear admitting
that they are wrong or believe they can recover their losses. Or believe they can recover their losses
Groupthink-
Members of a group put pressure on each other to conform and reach consensus, thereby increasing the risk of
flawed decisions. Reduces mental efficiency, reality testing, and moral judgement in making decisions.
Motivation
Content Perspectives
Maslow’s Hierarchy Approach-