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Management 300 Test 3 (Chpts. 5,6,8 & 9)

STUDY
PLAY
Benefits of Planning
Intensified effort
Persistence
Direction
Creation of task strategies
Setting Goals
S.M.A.R.T. Goals:
Specific
Measurable
Attainable
Realistic
Timely
Developing Commitment to Goals
Goal commitment
-the determination to achieve a goal
Set goals collectively
Make the goal public
Obtain top management's support
Maintaining Flexibility
Options-based planning
keep options open by making, small simultaneous investments in many alternative plans.
Slack resources
a cushion of resources, like extra time or money, that can be used to address and adapt to unanticipated changes.
Starting at the Top
Strategic plans
Purpose statement
Strategic objective
Strategic plans
make clear how the company will serve customers and position itself against competitors in the next 2 to 5 years
Purpose statement
a statement of a company's purpose or reason for existing
Strategic objective
a more specific goal that unifies company-wide efforts, stretches and challenges the organization, and possess a finish line and a time frame.
Bending in the Middle
Tactical plans
Management by Objectives (MBO)
Tactical plans
-specify how a company will use resources, budgets, and people to accomplish specific goals related to its strategic objective
-time frame: 6 months to 2 years
Management by Objectives (MBO)
-discuss possible goals
-collectively set goals
-jointly develop tactical plans
-meet regularly to review progress
Finishing at the Bottom
Operational plans
Single-use plans
Standing plans
-policies
-procedures
-rules and regulations
Budgets
Steps to Rational Decision Making
Define the problem
Identify decision criteria
Weight the criteria
Generate alternative courses of action
Evaluate each alternative
Compute the optimal decision
Identify Decision Criteria
The standards used to guide judgments and decisions.
Weight the Criteria
Absolute comparisons
Relative comparisons
Generate Alternative Courses of Action
-After identifying and weighting the criteria that will guide the decision-making process, the next step is to identify possible courses of action that could solve the problem.
-The idea is to generate as many alternatives as possible.
Evaluate Each Alternative
-The next step is to systematically evaluate each alternative against each criterion.
-The key is to use information to systematically evaluate each alternative against each criterion.
Compute the Optimal Decision
(rating for criterion A) x (weight for criterion A)
+
(rating for criterion B) x (weight for criterion B)
+
(rating for criterion C) x (weight for criterion C)
etc.
Limits to Rational Decision Making
-In theory, fully rational decision makers maximize decision by choosing the optimal solution.
-In practice, limited resources make it nearly impossible to maximize decisions.
Classical vs Behavioral Decision Models
The Classical Decision Model
-Describes decision making with complete information
-Optimizing decision
The Behavioral Decision Model
-Describes decision making with limited information and bounded rationality
-Satisficing decision
Decision Errors and Traps
Selective Perception
Availability Bias
Concrete Information Bias
Law of Small Numbers Bias
Gambler's Fallacy
Escalation of Commitment
Advantages of Group Decision Making
Groups do a better job than individuals at
-Defining the problem
-Generating alternative solutions
Pitfalls of Group Decision Making
Groupthink
-occurs in highly cohesive groups when group members feel intense pressure to agree with each other so that the group can approve a proposed solution
Takes considerable time
Strong willed members
Structured Conflict
C-type (cognitive) conflict
-focuses on problem- and issue-related differences of opinion
-willingness to examine, compare, reconcile differences to produce the best possible solution
A-type (affective) conflict
-emotional reaction that can occur when disagreements become personal
-hostility, anger, resentment, distrust, cynicism, apathy
Creating C-Type Conflict
Devil's advocacy
-Generate a potential solution
-Assign a devil's advocate to criticize and question the solution
-Present the critique of the potential solution to key decision makers
-Gather additional relevant information
-Decide whether to use, change, or not use the originally proposed solution
Creating C-Type Conflict
Nominal Group Technique
-Begins with group quiet time
-Each member shares one idea at a time with the group
-Group discusses the pros and cons of each idea
-Group members independently rank ideas presented
-Idea with highest average rank is selected
Creating C-Type Conflict
Delphi Technique
-A group of experts respond to questions and to each other until reaching agreement
Creating C-Type Conflict
Brainstorming/Electronic Brainstorming
-The more ideas the better
-All ideas are acceptable
-Other members' ideas should be used to come up with even more ideas
-Criticism or evaluation of ideas is not allowed