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About the course structure

• Part 1: Management—Three chapters


introducing management in terms of
present-day dynamics and historical
foundations—Introducing Management,
Management Learning Past to Present,
and Ethics and Social Responsibility.

©2013 John Wiley & Sons, Inc. All rights reserved.


About the course structure

• Part 2: Environment—Three chapters


setting the environmental context within
which today’s managers function—
Environment, Innovation, and
Sustainability, Global Management and
Cultural Diversity, and Entrepreneurship
and New Ventures.

©2013 John Wiley & Sons, Inc. All rights reserved.


About the course structure

• Part 3: Planning and Controlling—Four-


chapter sequence covering Information
and Decision Making, Planning
Processes and Techniques, Control
Processes and Systems, and Strategy
and Strategic Management.

©2013 John Wiley & Sons, Inc. All rights reserved.


About the course structure

• Part 4: Organizing—Th ree chapters on


the essential building blocks of
organizations— Organization Structures
and Design, Organizational Culture and
Change, and Human Resource
Management.

©2013 John Wiley & Sons, Inc. All rights reserved.


About the course structure

• Part 5: Leading—Five chapters exploring


key leadership skills and competencies—
Leading and Leadership Development,
Individual Behavior, Motivation Theory
and Practice, Teams and Teamwork, and
Communication and Collaboration.

©2013 John Wiley & Sons, Inc. All rights reserved.


JOHN R. SCHERMERHORN, JR.
MANAGEMENT
12th Edition
Chapter 1

The Management
Process
©2013 John Wiley & Sons, Inc. All rights reserved. 1-6
Planning Ahead — Chapter 1 Study Questions

1. What are the challenges of working in the new


economy?
2. What are organizations like in the new
workplace?
3. Who are the managers and what do they do?
4. What is the management process?
5. How do you learn managerial skills and
competencies?

©2013 John Wiley & Sons, Inc. All rights reserved. 1-7
Chapter 1 Learning Dashboard
1. Working today
1. Talent
2. Technology
3. Globalization
4. Ethics
5. Diversity
6. Careers
2. Organizations
1. What is an organization?
2. Organizations as systems
3. Organizational performance
4. Changing nature of organizations

©2013 John Wiley & Sons, Inc. All rights reserved.


Chapter 1 Learning Dashboard
3. Managers
1. What is a manager?
2. Levels of managers
3. Types of managers
4. Managerial performance
5. Changing nature of managerial work
4. The Management Process
1. Functions of Management
2. Managerial roles and activities
3. Managerial agendas and networking
5. Learning How to Manage
1. Essential managerial skills
2. Developing managerial potential

©2013 John Wiley & Sons, Inc. All rights reserved. 9


Takeaway
Place Slide Title Text1:Here
Working Today

• Talent
– People and their talents are the ultimate
foundations of organizational performance
– Intellectual capital is the collective brainpower or
shared knowledge of a workforce that can be
used to create value
– A knowledge worker’s mind is a critical asset to
employers and adds to the intellectual capital of
an organization

©2013 John Wiley & Sons, Inc. All rights reserved. 1-10
Takeaway
Place Slide Title Text1:Here
Working Today

Intellectual capital equation:

Commitment Competency
Intellectual
Capital

©2013 John Wiley & Sons, Inc. All rights reserved. 1-11
Takeaway
Place Slide 1:Here
Title Text Working Today
• Technology
– Tech IQ is a person’s ability to use technology to
stay informed:
• Checking inventory, making a sales transaction,
ordering supplies
• Telecommuting
• Virtual teams
• Effective use of online resources
– Databases
– Job searches
– Recruiting
– Social Media

©2013 John Wiley & Sons, Inc. All rights reserved. 1-12
Takeaway
Place Slide Title Text1:Here
Working Today

Globalization
– The worldwide interdependence of resource
flows, product markets, and business
competition that characterize our economy
– Job migration occurs when firms shift jobs from
one country to another

©2013 John Wiley & Sons, Inc. All rights reserved. 1-13
Takeaway
Place Slide Title Text1:Here
Working Today

Ethics
– Code of moral principles that set standards of
conduct of what is “good” and “right”
in one’s behavior

©2013 John Wiley & Sons, Inc. All rights reserved. 1-14
Takeaway
Place Slide Title Text1:Here
Working Today

Ethical expectations for modern businesses:


– Integrity and ethical leadership at all levels
– Social responsibility
– Sustainability

©2013 John Wiley & Sons, Inc. All rights reserved. 1-15
Takeaway
Place Slide 1:Here
Title Text Working Today

Diversity
– Workforce diversity reflects differences with
respect to gender, age, race, ethnicity, religion,
sexual orientation, and able-bodiedness
– A diverse and multicultural workforce both
challenges and offers opportunities to employers

©2013 John Wiley & Sons, Inc. All rights reserved. 1-16
Takeaway
Place Slide Title Text1:Here
Working Today
How diversity bias can occur in the workplace:
• Prejudice: is the display of negative, irrational
attitudes toward members of diverse populations.
• Discrimination actively denies minority members
the full benefits of organizational
membership.
• Th e glass ceiling eff ect is an invisible
• barrier limiting career advancement of
• women and minorities.

©2013 John Wiley & Sons, Inc. All rights reserved. 1-17
Takeaway
Place Slide 1:Here
Title Text Working Today

Careers
– Organizations consist of three types of workers,
sometimes referred to as a shamrock
organization:
( page 10), please
Permanent
review it carefully
full time
workers

Temporary Freelance
part-time or contract
workers workers

©2013 John Wiley & Sons, Inc. All rights reserved. 1-18
Takeaway
Place Slide Title Text1:Here
Working Today

• Free-agent economy
– People change jobs more often, and many work
on independent contracts
• Self-management
– Ability to understands oneself, exercise
initiative, accept responsibility, and learn from
experience

©2013 John Wiley & Sons, Inc. All rights reserved. 1-19
Takeaway
Place Slide Title Text2: Organizations
Here

Organization
– A collection of people working together to
achieve a common purpose
– Organizations provide useful goods and/or
services that return value to society and satisfy
customer needs

©2013 John Wiley & Sons, Inc. All rights reserved. 1-20
Place Slide Title Text Here

Figure 1.1 Organizations as open


systems interact with their environment

©2013 John Wiley & Sons, Inc. All rights reserved. 1-21
Takeaway
Place Slide Title Text2: Organizations
Here

Organizational performance
– “Value creation” is a very important notion for
organizations
– Value is created when an organization’s
operations adds value to the original cost of
resource inputs
– When value creation occurs:
• Businesses earn a profit
• Nonprofit organizations add wealth to society

©2013 John Wiley & Sons, Inc. All rights reserved. 1-22
Takeaway
Place Slide Title Text2: Organizations
Here

Organizational performance

Performance Performance
Productivity
effectiveness efficiency
• An overall • An output • An input
measure of the measure of task measure of the
quantity and or goal resource costs
quality of work accomplishment associated with
performance goal
with resource accomplishment
utilization taken
into account

©2013 John Wiley & Sons, Inc. All rights reserved. 1-23
Place Slide Title Text Here
Figure 1.2 Productivity and the
dimensions of organizational
performance

©2013 John Wiley & Sons, Inc. All rights reserved. 1-24
Takeaway
Place Slide Title Text2: Organizations
Here

Workplace changes that provide a context for


studying management …
Focus on valuing human capital

Demise of “command-and-control”

Emphasis on teamwork

Preeminence of technology

Importance of networking

New workforce expectations

Priorities on sustainability

©2013 John Wiley & Sons, Inc. All rights reserved. 1-25
Place SlideTakeaway 3: Managers
Title Text Here

Importance of human resources and managers


– People are not ‘costs to be controlled ’
– High performing organizations treat people as
valuable strategic assets
– Managers must ensure that people are treated as
strategic assets

©2013 John Wiley & Sons, Inc. All rights reserved. 1-26
Takeaway
Place Slide 3: Managers
Title Text Here

• Manager
– Directly supports, activates and is responsible for
the work of others
– The people who managers help are the ones
whose tasks represent the real work of the
organization

©2013 John Wiley & Sons, Inc. All rights reserved. 1-27
Takeaway
Place Slide 3: Managers
Title Text Here

Levels of management
– Board of directors make sure the organization is
run right
– Top managers are responsible for performance of
an organization as a whole or for one of its major
parts
– Middle managers oversee large departments or
divisions
– Team leaders supervise non-managerial workers

©2013 John Wiley & Sons, Inc. All rights reserved. 1-28
Place Slide Title Text Here
Figure 1.3 Management levels in a typical
business and non-profit organizations

©2013 John Wiley & Sons, Inc. All rights reserved. 1-29
Takeaway
Place Slide 3: Managers
Title Text Here

Types of managers
• Line managers are responsible for work activities that
directly affect organization’s outputs
• Staff managers use technical expertise to advise and support
the efforts of line workers
• Functional managers are responsible for a single area of
activity
• General managers are responsible for more complex units
that include many functional areas
• Administrators work in public and nonprofit organizations

©2013 John Wiley & Sons, Inc. All rights reserved. 1-30
Takeaway
Place Slide 3: Managers
Title Text Here

Managerial performance and accountability


– Accountability is the requirement to show
performance results to a supervisor
– Effective managers help others achieve high
performance and satisfaction at work

©2013 John Wiley & Sons, Inc. All rights reserved. 1-31
Takeaway
Place Slide 3: Managers
Title Text Here

Corporate Governance
– Board of directors hold top management
responsible for organizational performance

Financial Ethical
performance Sustainability
performance

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Place SlideTakeaway 3: Managers
Title Text Here

Quality of work life (QWL)


– An indicator of the overall quality of human
experiences in the workplace

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Place SlideTakeaway 3: Managers
Title Text Here

QWL indicators:

• Fair pay
• Safe working conditions
• Opportunities to learn and use new skills
• Room to grow and progress in a career
• Protection of individual rights
• Pride in work itself and in the organization

©2013 John Wiley & Sons, Inc. All rights reserved. 1-34
Takeaway
Place Slide 3: Managers
Title Text Here

The organization as an upside-down pyramid


– Each individual is a value-added worker
– A manager’s job is to support workers’ efforts
– The best managers are known for helping and
supporting
– Customers at the top served by workers who are
supported by managers

©2013 John Wiley & Sons, Inc. All rights reserved. 1-35
Place Slide Title Text Here
Figure 1.4 The organization viewed as an
upside-down pyramid

©2013 John Wiley & Sons, Inc. All rights reserved. 1-36
PlaceTakeaway
Slide Title4:Text
The Here
Management Process

• Managers achieve high performance for their


organizations by best utilizing its human and
material resources
• Management is the process of planning, organizing,
leading, and controlling the use of resources to
accomplish performance goals
• All managers are responsible for the four functions
• The functions are carried on continually

©2013 John Wiley & Sons, Inc. All rights reserved. 1-37
Place Slide Title Text Here

Figure 1.5 Four functions of management

©2013 John Wiley & Sons, Inc. All rights reserved. 1-38
PlaceTakeaway
Slide Title4:Text
The Here
Management Process

Functions of management
– Planning
• The process of setting objectives and determining
what actions should be taken to accomplish them
– Organizing
• The process of assigning tasks, allocating resources,
and coordinating work activities

©2013 John Wiley & Sons, Inc. All rights reserved. 1-39
PlaceTakeaway
Slide Title4:Text
The Here
Management Process

Functions of management …
– Leading
• The process of arousing people’s enthusiasm to work
hard and direct their efforts to achieve goals
– Controlling
• The process of measuring work performance and
taking action to ensure desired results

©2013 John Wiley & Sons, Inc. All rights reserved. 1-40
Takeaway 4: The Management Process

Mintzberg’s 10 Managerial Roles

©2013 John Wiley & Sons, Inc. All rights reserved.


PlaceTakeaway
Slide Title4:Text
The Here
Management Process

Characteristics of managerial work


– long hours
– intense pace
– fragmented and varied tasks
– many communication media
– filled with interpersonal relationships

©2013 John Wiley & Sons, Inc. All rights reserved. 1-42
PlaceTakeaway
Slide Title4:Text
The Here
Management Process

Managerial agendas and networks


– Agenda setting
• Develops action priorities for accomplishing goals and plans
– Networking
• Process of creating positive relationships with people who can
help advance agendas
– Social capital
• Capacity to get things done with help

©2013 John Wiley & Sons, Inc. All rights reserved. 1-43
PlaceTakeaway
Slide Title5:Text
Learning
Here How to Manage

• Learning
– The change in a behavior that results from
experience
• Lifelong learning
– The process of continuously learning from
daily experiences and opportunities

©2013 John Wiley & Sons, Inc. All rights reserved. 1-44
Place Slide Title Text Here

Figure 1.6 Katz’s Essential Managerial


Skills

©2013 John Wiley & Sons, Inc. All rights reserved. 1-45
Place Slide Title Text Here
Figure 1.7 Learning model for developing
managerial skills and competencies

©2013 John Wiley & Sons, Inc. All rights reserved. 1-46
Place Slide Title Text Here
JOHN R. SCHERMERHORN, JR.
MANAGEMENT
12th Edition

Chapter 7

The Decision-Making
Process
©2013 John Wiley & Sons, Inc. All rights reserved. 7-47
1-47
Planning
Place Ahead
Slide — Chapter
Title Text Here 7 Study Questions

1. What is the role of information in the management


process?
2. How do managers use information to make
decisions?
3. What are the steps in the decision-making
process?
4. What are the current issues in managerial decision
making?

©2013 John Wiley & Sons, Inc. All rights reserved. 1-48
Chapter
Place Slide 7 Learning
Title Text Here Dashboard

1. Information, Technology, and Management


1. What is useful information?
2. Information systems and business intelligence
3. Information needs in organizations
4. How information technology is changing organizations
2. Information and Managerial Decisions
1. Managers as information processors
2. Managers as problem solvers
3. Types of managerial decisions
4. Decision conditions

©2013 John Wiley & Sons, Inc. All rights reserved. 1-49
Chapter
Place Slide 7 Learning
Title Text Here Dashboard

3. The Decision-Making Process


1. Step 1 – Identify and Define the Problem
2. Step 2 – Generate and Evaluate Alternative Courses of Action
3. Step 3 – Decide on a Preferred Course of Action
4. Step 4 – Implement the Decision
5. Step 5 – Evaluate Results
6. At All Steps – Check Ethical Reasoning
4. Issues in Managerial Decision Making
1. Decision errors and traps
2. Creativity in decision making

©2013 John Wiley & Sons, Inc. All rights reserved. 1-50
Takeaway
Place Slide1:Title
Information, Technology, & Management
Text Here

Information, Technology, & Management


– Managers must have
• Technological competency
– Ability to understand new technologies and to use them to
their best advantage
• Information competency
– Ability to locate, gather, organize, and display information for
decision making and problem solving
• Analytical competency
– Ability to evaluate and analyze information to make actual
decisions and solve real problems

©2013 John Wiley & Sons, Inc. All rights reserved. 1-51
Takeaway
Place Slide1:Title
Information, Technology, & Management
Text Here

What is useful information?


– Data
• Raw facts and observations
– Information
• Data made useful and meaningful for decision
making
– Information drives management functions

©2013 John Wiley & Sons, Inc. All rights reserved. 1-52
Takeaway
Place Slide1:Title
Information, Technology, & Management
Text Here

• Characteristics of useful information:


– Timely
– High quality
– Complete
– Relevant
– Understandable
• Analytics: systematic gathering and
processing of data to make it useful as
information

©2013 John Wiley & Sons, Inc. All rights reserved. 1-53
Takeaway
Place Slide1:Title
Information, Technology, & Management
Text Here

Information systems and business intelligence


– Management information systems
• Use IT to collect, organize, and distribute data for use
in decision making
– Business intelligence
• Taps information systems to extract and report data in
organized ways that are helpful to decision makers

©2013 John Wiley & Sons, Inc. All rights reserved. 1-54
Takeaway
Place Slide1:Title
Information, Technology, & Management
Text Here

Executive dashboards
• Visually update and display key
performance indicators and information
on a real-time basis

©2013 John Wiley & Sons, Inc. All rights reserved. 1-55
Takeaway
Place Slide1:Title
Information, Technology, & Management
Text Here

Information needs in organizations


– Information exchanges with the external
environment:
• Gather intelligence information
• Provide public information
– Information exchanges within the organization:
• Facilitate decision making
• Facilitate problem solving

©2013 John Wiley & Sons, Inc. All rights reserved. 1-56
Takeaway 1: Information, Technology, & Management
Place Slide Title Text Here

Implications of IT for
Implications of IT within
relationships with external
organizations:
environment:
• Helps with customer • Facilitation of
relationship management communication and
• Helps organizations with information sharing
supply chain management • Operating with fewer
• Helps in monitoring middle managers
outsourcing and other • Flattening of organizational
business contracts structures
• Faster decision making
• Increased coordination and
control

©2013 John Wiley & Sons, Inc. All rights reserved. 1-57
Place Slide Title Text Here
Figure 7.1 Internal and external information
needs in organizations

©2013 John Wiley & Sons, Inc. All rights reserved. 1-58
Place Slide Title Text Here
Figure 7.2 Information technology is breaking
barriers and changing organizations

©2013 John Wiley & Sons, Inc. All rights reserved. 1-59
Takeaway
Place Slide 2: Information
Title and Managerial Decisions
Text Here

Information and Managerial Decisions


– Managers as Information Processors
• Continually gather, give, and receive
information
• Now as much electronic as it is face to face
• Always on, always connected

©2013 John Wiley & Sons, Inc. All rights reserved. 1-60
Place Slide Title Text Here
Figure 7.3 The manager as an information-
processing nerve center

©2013 John Wiley & Sons, Inc. All rights reserved. 1-61
Takeaway
Place Slide 2: Information
Title and Managerial Decisions
Text Here

Problem solving
– The process of identifying a discrepancy between actual
and desired performance and taking action to resolve it

Performance Performance
Decision
threat opportunity
A choice among Situation offers
Something is
possible the chance for a
wrong or has
alternative better future if
the potential to
courses of the right steps
go wrong
action are taken

©2013 John Wiley & Sons, Inc. All rights reserved. 1-62
Takeaway
Place Slide 2: Information
Title and Managerial Decisions
Text Here

Problem-solving approaches or styles:

Problem avoiders Problem solvers Problem seekers


• Inactive in information • Reactive in gathering • Proactive in
gathering and solving information and anticipating problems
problems solving problems and opportunities and
taking appropriate
action to gain an
advantage

©2013 John Wiley & Sons, Inc. All rights reserved. 1-63
Takeaway
Place Slide 2: Information
Title and Managerial Decisions
Text Here

Systematic versus intuitive thinking

Systematic Intuitive
thinking thinking
• approaches • approaches
problems in a problems in a
rational, step-by- flexible and
step, and spontaneous
analytical fashion fashion

©2013 John Wiley & Sons, Inc. All rights reserved. 1-64
Takeaway
Place Slide 2: Information
Title and Managerial Decisions
Text Here

Multidimensional thinking applies both


intuitive and systematic thinking
– Effective multidimensional thinking
requires skill at strategic opportunism

©2013 John Wiley & Sons, Inc. All rights reserved. 1-65
Takeaway
Place Slide 2: Information
Title and Managerial Decisions
Text Here

Managers use different cognitive styles

©2013 John Wiley & Sons, Inc. All rights reserved. 1-66
Takeaway
Place Slide 2: Information
Title and Managerial Decisions
Text Here

Types of problems
– Structured problems are ones that are familiar,
straightforward, and clear with respect to
information needs
– Programmed decisions apply solutions that are
readily available from past experiences to solve
structured problems

©2013 John Wiley & Sons, Inc. All rights reserved. 1-67
Takeaway
Place Slide 2: Information
Title and Managerial Decisions
Text Here

Types of problems
– Unstructured problems are ones that are
full of ambiguities and information
deficiencies
– Nonprogrammed decisions apply a specific
solution to meet the demands of a unique
problem
– Commonly faced by higher-level
management
©2013 John Wiley & Sons, Inc. All rights reserved. 1-68
Takeaway
Place Slide 2: Information
Title and Managerial Decisions
Text Here

Crisis decision making


– A crisis involves an unexpected problem
that can lead to disaster if not resolved
quickly and appropriately

©2013 John Wiley & Sons, Inc. All rights reserved. 1-69
Takeaway
Place Slide 2: Information
Title and Managerial Decisions
Text Here

Rules for crisis management:

• Figure out what is going on


• Remember that speed matters
• Remember that slow counts, too
• Respect the danger of the unfamiliar
• Value the skeptic
• Be ready to “fight fire with fire ”

©2013 John Wiley & Sons, Inc. All rights reserved. 1-70
Takeaway
Place Slide 2: Information
Title and Managerial Decisions
Text Here

Managers make decisions with various amounts of information

Certain environment

• offers complete information on possible action


alternatives and their consequences

Risk environment

• lacks complete information but offers probabilities of


the likely outcomes for possible action alternatives

Uncertain environment

• lacks so much information that it is difficult to assign


probabilities to the likely outcomes of alternatives

©2013 John Wiley & Sons, Inc. All rights reserved. 1-71
Place Slide Title Text Here
Figure 7.4 Three environments for managerial
decision making and problem solving

©2013 John Wiley & Sons, Inc. All rights reserved. 1-72
Place Slide Title Text Here
Figure 7.5 Steps in managerial decision making and
problem solving

©2013 John Wiley & Sons, Inc. All rights reserved. 1-73
Takeaway
Place 3 : The
Slide Title TextDecision-Making
Here Process

Step 1 — Identify and define the problem


– Focuses on information gathering, information
processing, and deliberation
– Decision objectives should be established
– Common mistakes in defining problems:
• Defining the problem too broadly or too narrowly
• Focusing on symptoms instead of causes
• Choosing the wrong problem

©2013 John Wiley & Sons, Inc. All rights reserved. 1-74
Takeaway
Place 3 : The
Slide Title TextDecision-Making
Here Process

Step 2 — Generate and Evaluate Alternative


Courses of Action
– Potential solutions are formulated and more
information is gathered, data are analyzed, the
advantages and disadvantages of alternative
solutions are identified
– Approaches for evaluating alternatives:
• Stakeholder analysis
• Cost-benefit analysis

©2013 John Wiley & Sons, Inc. All rights reserved. 1-75
Takeaway
Place 3 : The
Slide Title TextDecision-Making
Here Process

Step 2 — Generate and Evaluate Possible


Courses of Action (cont.)
– Criteria for evaluating alternatives:
• Benefits
• Costs
• Timeliness
• Acceptability
• Ethical soundness

©2013 John Wiley & Sons, Inc. All rights reserved. 1-76
Takeaway
Place 3 : The
Slide Title TextDecision-Making
Here Process

Step 2 — Generate and Evaluate


Possible Courses of Action (cont.)
– Common mistakes:
• Abandoning the search for alternatives
too quickly

©2013 John Wiley & Sons, Inc. All rights reserved. 1-77
Takeaway
Place 3 : The
Slide Title TextDecision-Making
Here Process

Step 3 — Decide on a Preferred Course


of Action
– Two different approaches
• Behavioral model leads to satisficing
decisions
• Classical model leads to optimizing decisions

©2013 John Wiley & Sons, Inc. All rights reserved. 1-78
Place Slide Title Text Here
Figure 7.6 Differences in the classical and behavioral
decision-making models

©2013 John Wiley & Sons, Inc. All rights reserved. 1-79
Takeaway
Place 3 : The
Slide Title TextDecision-Making
Here Process

Step 4 — Implement the Decision


– Involves taking action to make sure the solution
decided upon becomes a reality
– Managers need to have willingness and ability to
implement action plans
– Lack-of-participation error should be avoided

©2013 John Wiley & Sons, Inc. All rights reserved. 1-80
Takeaway
Place 3 : The
Slide Title TextDecision-Making
Here Process

Step 5 — Evaluate Results


– Involves comparing actual and desired results
– Positive and negative consequences of chosen
course of action should be examined
– If actual results fall short of desired results, the
manager returns to earlier steps in the decision-
making process

©2013 John Wiley & Sons, Inc. All rights reserved. 1-81
Takeaway
Place 3 : The
Slide Title TextDecision-Making
Here Process

At all steps, check ethical reasoning!


– Ask these spotlight questions

Utility • Does the decision satisfy all constituents


or stakeholders?

Rights • Does the decision respect the rights and


duties of everyone?

Justice • Is the decision consistent with the


canons of justice?

Caring • Is the decision consistent with my


responsibilities to care?

©2013 John Wiley & Sons, Inc. All rights reserved. 1-82
Takeaway
Place 4: Issues
Slide Title Textin Managerial
Here Decision Making

Issues in decision making


– How do decision errors happen?
– Heuristics are strategies for simplifying
decision making

©2013 John Wiley & Sons, Inc. All rights reserved. 1-83
Takeaway
Place 4: Issues
Slide Title in Managerial
Text Here Decision Making

Availability Bias
• Bases a decision on recent information or events

Representativeness Bias
• Bases a decision on similarity to other situations

Anchoring and Adjustment Bias


• Bases a decision on incremental adjustment from a prior decision point

Framing Error
• Trying to solve a problem in the context in a positive or negative context

Confirmation Error
• Focusing on information that confirms a decision already made

Escalating Commitment
• Continuing a course of action even though it is not working

©2013 John Wiley & Sons, Inc. All rights reserved. 1-84
Takeaway
Place 4: Issues
Slide Title in Managerial
Text Here Decision Making

Creative Decision making:


– Creativity is the generation of a novel idea or
unique approach that solves a problem or crafts
an opportunity
• Big-C creativity occurs when extraordinary things are
done by exceptional people
• Little-C creativity occurs when average people come
up with unique ways to deal with daily events and
situations

©2013 John Wiley & Sons, Inc. All rights reserved. 1-85
Takeaway
Place 4: Issues
Slide Title Textin Managerial
Here Decision Making

Personal creativity drivers

Task
Motivation
Task Creativity
Expertise Skills

Creativity

©2013 John Wiley & Sons, Inc. All rights reserved. 1-86
Takeaway
Place 4: Issues
Slide Title Textin Managerial
Here Decision Making

Situational creativity drivers

Management
Support

Team Organizational
Creativity
Skills Culture

Creativity

©2013 John Wiley & Sons, Inc. All rights reserved. 1-87
Place Slide Title Text Here
JOHN R. SCHERMERHORN, JR.
MANAGEMENT
12th Edition

Chapter 8

Fundamentals of
Planning
©2013 John Wiley & Sons, Inc. All rights reserved. 7-88
1-88
Planning
Place Ahead
Slide — Chapter
Title Text Here 8 Study Questions

1. Why and how do managers plan?


2. What types of plans do managers use?
3. What are the useful planning tools and
techniques?
4. How can plans be well implemented?

©2013 John Wiley & Sons, Inc. All rights reserved. 1-89
Chapter
Place Slide 8 Learning
Title Text Here Dashboard

1. Why and How Managers Plan


1. Importance of planning
2. The planning process
3. Benefits of planning

2. Types of Plans Used by Managers


1. Long-range and short-range plans
2. Strategic and tactical plans
3. Operational plans

©2013 John Wiley & Sons, Inc. All rights reserved. 1-90
Chapter
Place Slide 8 Learning
Title Text Here Dashboard

3. Planning Tools and Techniques


1. Forecasting
2. Contingency planning
3. Scenario planning
4. Benchmarking
5. Use of staff planners

4. Implementing Plans to Achieve Results


1. Goal setting
2. Goal alignment
3. Participation and involvement

©2013 John Wiley & Sons, Inc. All rights reserved. 1-91
Takeaway
Place 1: Why
Slide Title Textand How Managers Plan
Here

• Planning
– The process of setting objectives and
determining how to accomplish them
• Objectives and goals
– Identify the specific results or desired outcomes
that one intends to achieve
• Plan
– A statement of action steps to be taken in order
to accomplish the objectives

©2013 John Wiley & Sons, Inc. All rights reserved. 1-92
Takeaway
Place 1: Why
Slide Title Textand How Managers Plan
Here

• Steps in the planning process:


– Define your objectives
– Determine where you stand vis-à-vis objectives
– Develop premises regarding future conditions
– Analyze alternatives and make a plan
– Implement the plan and evaluate results

©2013 John Wiley & Sons, Inc. All rights reserved. 1-93
Place Slide Title Text Here
Figure 8.1 The roles of planning and controlling
in the management process

©2013 John Wiley & Sons, Inc. All rights reserved. 1-94
Takeaway
Place 1: Why
Slide Title Textand How Managers Plan
Here

• Benefits of planning:
– Improves focus and flexibility
– Improves action orientation
– Improves coordination and control
– Improves time management

©2013 John Wiley & Sons, Inc. All rights reserved. 1-95
Takeaway
Place 1: Why
Slide Title Textand How Managers Plan
Here

• Personal time management tips:


– DO say “no” to requests that distract from what
you should be doing
– DON’T get bogged down in details that can be
addressed later
– DO screen telephone calls, emails, and meeting
requests

©2013 John Wiley & Sons, Inc. All rights reserved. 1-96
Takeaway
Place 1: Why
Slide Title Textand How Managers Plan
Here

• More personal time management tips:


– DON’T let drop-in visitors instant messaging use
up your time
– DO prioritize your important and urgent work
– DON’T become calendar bound by letting others
control your schedule
– DO follow priorities; do most important and
urgent work first

©2013 John Wiley & Sons, Inc. All rights reserved. 1-97
Takeaway
Place 2: Types
Slide Title TextofHere
Plans Used by Managers

• Types of plans
– Long-term plans look three or more
years into the future
– Short-term plans typically cover one
year or less

©2013 John Wiley & Sons, Inc. All rights reserved. 1-98
Takeaway
Place 2: Types
Slide Title TextofHere
Plans Used by Managers

Most of us
• 3 month time
frame

A few of us
• 1 year time frame
Very few of us
• 20 year time frame

©2013 John Wiley & Sons, Inc. All rights reserved. 1-99
Takeaway
Place 2: Types
Slide Title TextofHere
Plans Used by Managers

• Strategic plans — set broad, comprehensive,


and longer-term action directions for the
entire organization
• Vision – clarifies purpose of the organization
and what it hopes to be in the future

©2013 John Wiley & Sons, Inc. All rights reserved. 1-100
Takeaway
Place 2: Types
Slide Title TextofHere
Plans Used by Managers

• Tactical plan – helps to implement all or parts of the


strategic plan
• Functional plans – indicate how different operations
within the organization will help accomplish the
overall strategy
• Production plans
• Financial plans
• Facilities plans
• Logistics plans
• Marketing plans
• Human resource plans

©2013 John Wiley & Sons, Inc. All rights reserved. 1-101
Takeaway
Place 2: Types
Slide Title TextofHere
Plans Used by Managers

• Operational plans — identify short-term activities to


implement strategic plans
– Policies are standing plans the communicate guidelines
for decisions
– Procedures are rules that describe actions to be taken in
specific situations
– Budgets are plans the commit resources to projects or
activities
• Zero based budgets allocate resources as if each
budget were brand new

©2013 John Wiley & Sons, Inc. All rights reserved. 1-102
PlaceTakeaway 3: Planning
Slide Title Text HereTools and Techniques

• Forecasting
– Attempts to predict the future
– Qualitative forecasting uses expert opinions
– Quantitative forecasting uses mathematical
models and statistical analysis of historical data
and surveys

©2013 John Wiley & Sons, Inc. All rights reserved. 1-103
PlaceTakeaway 3: Planning
Slide Title Text HereTools and Techniques

• Contingency planning
– Identifying alternative courses of action to take
when things go wrong
– Contingency plans anticipate changing conditions
– Contingency plans contain trigger points

©2013 John Wiley & Sons, Inc. All rights reserved. 1-104
PlaceTakeaway 3: Planning
Slide Title Text HereTools and Techniques

• Scenario planning
– A long-term version of contingency planning
– Identifying alternative future scenarios
– Plans made for each future scenario
– Increases organization’s flexibility and
preparation for future shocks

©2013 John Wiley & Sons, Inc. All rights reserved. 1-105
PlaceTakeaway 3: Planning
Slide Title Text HereTools and Techniques

• Benchmarking
– Use of external and internal comparisons to plan
for future improvements
– Adopting best practices: things people and
organizations do that lead to superior
performance
– Staff planners assist in all steps of the planning
process

©2013 John Wiley & Sons, Inc. All rights reserved. 1-106
Takeaway
Place Slide 4: Implementing
Title Text HerePlans to Achieve Results

©2013 John Wiley & Sons, Inc. All rights reserved. 1-107
Place Slide Title Text Here
Figure 8.2 A sample hierarchy

©2013 John Wiley & Sons, Inc. All rights reserved. 1-108
Takeaway
Place Slide 4: Implementing
Title Text HerePlans to Achieve Results

• Goal Alignment Between Team Leader and


Team Member
– Jointly plan: set objectives, set standards, choose
actions
– Individually set: perform tasks (member), provide
support (leader)
– Jointly control: review results, discuss
implications, renew cycle

©2013 John Wiley & Sons, Inc. All rights reserved. 1-109
Takeaway
Place Slide 4: Implementing
Title Text HerePlans to Achieve Results

• Participatory Planning
– unlocks the motivational potential of goal setting
– management by objectives (MBO) promotes
participation
– when participation is not possible, workers will
respond positively if supervisory trust and
support exist

©2013 John Wiley & Sons, Inc. All rights reserved. 1-110
Place Slide Title Text Here
Figure 8.3 How participation and involvement help
build commitment to plans

©2013 John Wiley & Sons, Inc. All rights reserved. 1-111

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