BUSA (Chapter 4).docx - CHAPTER 4 PLANNING AND DECISION MAKING BENEFITS AND PITFALLS OF PLANNING Planning choosing a goal and developing a method of

BUSA (Chapter 4).docx - CHAPTER 4 PLANNING AND DECISION...

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CHAPTER 4: PLANNING AND DECISION MAKING BENEFITS AND PITFALLS OF PLANNING Planning : choosing a goal and developing a method of strategy to achieve that goal. (A) Benefits of Planning o Provides direction : allows everyone in the organization to understand how their efforts can contribute to achieving an organization’s goals. o Intensifies efforts : plans encourage managers and employees to direct greater efforts toward activities that help accomplish their goals and away from activities that don’t o Reduces uncertainty: managers are able to consider future changes and potential problems that might arise and then develop the appropriate strategies to respond. Planning reduces the negative impact that can occur as a result of future events. o Facilitates decision making: managers are able to refer to those pre-planned plans to help guide current decision making. Without a plan, managers will make decision counterproductive of their goal. (B) Planning Pitfalls. o Impedes change and prevent or slow adaptation: some companies become to committed to achieving the goals set forth in their plans that they fail to notice when their plans aren’t working or their goals need to change. o False sense of certainty: all planning is based on assumption and planning therefore might create a fall sense of security to planners by making them feel like they know exactly what the future holds for their competitors, their suppliers, and their companies. o Detachment of planners: strategic planners and top-level managers are supposed to focus on the big picture rather than the implementation. But because they are not part of the implementation process (detachment) planners plan for things they don’t understand. HOW TO MAKE A PLAN THAT WORKS (1) Setting Goals o Goals need to be specific and challenging to direct behavior and increase effort. o S.M.A.R.T. goals: specific, measurable, attainable, realistic, and timely. (2) Developing Commitment to the Goals o Goal commitment: the determination to achieve a goal. o Goal commitment is not automatic, managers and workers must choose to commit themselves to it. (3) Developing Effective Action Plans o Action plan: lists the specific steps (how), people (who), resources (what), and time period (when) for accomplishing a goal. (4) Tracking Progress o Set short term and long term goals: Short term goals define the preliminary levels of performance that need to be achieved in order to attain the long term goal. o Gather and provide performance feedback: allows workers and managers to track their progress toward goal achievement and make adjustments in effort, direction, and strategies.
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(5) Maintaining Flexibility o Adopting an options-based approach : keeping options open by making small, simultaneous investments in many alternative plans. The purpose is to eave those commitments open by
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