Dr. hab. Jerzy Supernat Institute of Administrative Sciences University of Wrocław

1. Planningand Decision Making Dr. hab. Jerzy SupernatInstitute of Administrative SciencesUniversity of Wrocław

2. Planning and Decision Making Planning and decision making constitute the first managerial function that organizations must address. dr hab. Jerzy Supernat

3. Planning and Decision Making All planning and decision making occurs within an environmental context. Thus understanding the environment is essentially the first step in planning and decision making. dr hab. Jerzy Supernat

4. Planning and Decision Making • Decision making is the cornerstone of planning. It is the catalyst that drives the planning process: • organization’s goals follow from decisionsmade by various managers • the best plan for achieving particular goals reflects a decision to adopt one course of action as opposed to others Decision making underlies every aspect of setting goals and formulating plans. dr hab. Jerzy Supernat

5. Planning and Decision Making • Purposes of goals • goals provide guidance and a unified direction for people in the organization • (effective) goal setting promotes good planning, and good planning facilities future goal setting • (specific and moderately difficult) goals canserve as a source of motivation to employees of the organization (es-pecially if attaining the goal is likely to result in rewards) • goals provide a mechanism for control and evaluation dr hab. Jerzy Supernat

6. Planning and Decision Making • Kinds of goals. Organization’s goals vary by: • level (an organization’s mission, strategic goals, tactical goals, operational goals) • area (goals for operations, marketing, finance, quality, productivity and so forth) • time frame (long-term goals, intermediate-term goals, short-term goals; nb. some goals have an explicit time frame and others have an open-ended time horizon) dr hab. Jerzy Supernat

7. Planning and Decision Making John A. Pearce II, Fred David: An organization mission is a statement of its fundamen-tal, unique purpose that sets a business apart from other firms of its type and identifies the scope of the business’s operations in product and market terms. Jelfa SA mission statement: The mission of Jelfa SA is to enhance the quality of life and prolong the life span of society by manufacturing phar-maceuticals that come up to the highest world standards. dr hab. Jerzy Supernat

8. Planning and Decision Making Managing Multiple Goals Organizations set many different kinds of goals and sometimes ex-perience conflicts or contradictions among goals. To address such pro-blems, managers must understand the concept of optimizing. Optimizing involves balancing and reconciling possible conflicts between goals. Managers must look for inconsis-tencies and decide whether to pursue one goal to the ex-clusion of another or to find a midrange target between the extremes. dr hab. Jerzy Supernat

9. Planning and Decision Making • Kinds of organizational plans • Given the clear link between organizational goals and plans it is obvious that organizations establish many dif-ferent kinds of plans. At a general level, these include: • strategic plans • tactical plans • operational plans dr hab. Jerzy Supernat

10. Planning and Decision Making • Strategic Plans • Strategic plans are the plans developed to achieve stra-tegic goals. They are long-range plans and address ques-tions of • scope / domain • resource allocation / deployment • competitive advantage • synergy dr hab. Jerzy Supernat

11. Planning and Decision Making Tactical Plans Tactical plans aim at achieving tactical goals. They are intermediate plans developed to implement specific parts of a strategic plan. Thus tactical plans are concerned more with actually getting things done than with deciding what to do. dr hab. Jerzy Supernat

12. Planning and Decision Making • Operational Plans • Operational plans are short-range plans and focus on car-rying out tactical plans to achieve operational goals.Two basic forms of operational plans are: • Single-use plans(developed fornonrecurring situations) • programs • projects • Standing plans • policies • standard operating procedures • rules and regulations dr hab. Jerzy Supernat

13. Planning and Decision Making Murphy’s Law To err is human, to forgive is not company policy. dr hab. Jerzy Supernat

14. Planning and Decision Making Contingency Planning Contingency planning is important for most organizations and necessary for those operating in particularly complex or dynamic environments. The essence of contingency planning is the determination of alternative courses of action to be taken if an intended plan of action is un-expectedly disrupted or rendered inappropriate. Contingency: an event which may or may not occur; that which is possible or pro-bable; a fortuitous event; a chance. dr hab. Jerzy Supernat

15. Contingency plans should be periodically updated and revised.

16. Peter F. Drucker(1909-2005)

17. Planning and Decision Making • Peter F. Drucker on decision making • Making good decisions is a crucial skill at every level. • Decision making is the specific executive task. • Most discussions of decision making assume that only senior executives make decisions or that only senior executives' decisions matter. This is a dangerous mistake. • Whenever you see a successful business, someone once made a courageous decision. • Plans are only good intentions unless they immediately degenerate into hard work. dr hab. Jerzy Supernat

18. Planning and Decision Making Whatever a manager does he does through making decisions. Those decisions may be made as a matter of routine. In-deed, he may not even realize that he is making them. Or they may affect the future existence of the enterprise and require years of systematic analysis. But management is always a decision-making process. dr hab. Jerzy Supernat

19. Planning and Decision Making • Progressive stages of decision-making process • defining the problem • analyzing the problem • developing alternative solutions • deciding upon the best solution • converting the decision into effective action dr hab. Jerzy Supernat

20. Planning and Decision Making • Stage 1: Defining the problem • finding the real problem and defining it • determining the objectives for the solution and the ru-les that limit the solution dr hab. Jerzy Supernat

21. Planning and Decision Making Quod tibi fieri non vis, alteri ne feceris (Do not do unto others what you do not want done to yourself). The Gospel according to Matthew 7, 12: „Do for others what you want them to do for you”. George Bernard Shaw (1856-1950): Do not do unto others as you would expect they should do unto you. Their tastes may not be the same. dr hab. Jerzy Supernat

22. Planning and Decision Making • Peter M. Senge (born 1947) distinguishes: • fundamental solutions • symptomatic solutions dr hab. Jerzy Supernat

23. Planning and Decision Making • Stage 2: Analyzing the problem • classifying the problem • finding the facts dr hab. Jerzy Supernat

24. Planning and Decision Making Aaron Bernard Wildavsky (1930-1993): Orga-nizations exist to suppress data. Some data are screened in but most are screened out. The very structure of organizations – the units, the levels, the hierarchy – is designed to reduce the data to manageable and manipula-table proportions. (…)at each level there is not only compression of data but absorption of uncertainty. It is not the things in themselves but data – reduction sum-maries that are passed up until, at the end, executives are left with mere chains of inferences. Whichever way they go, error is endemic: If they seek original sources, they are easily overwhelmed; if they rely on what they get, they are easily misled. dr hab. Jerzy Supernat

25. Planning and Decision Making Stage 3: Developing alternative solutions What the alternatives are will vary with the problem. But one solution should always be considered: taking no ac-tion at all. Some problems are so complex that you have to be high-ly intelligent and well-informed just to be undecided about them. Laurence J. Peter dr hab. Jerzy Supernat

26. Planning and Decision Making Alex F. Osborne (1888-1966) – the man who invented brainstorming: It is easier to tone down a wild idea than to think up a new one. dr hab. Jerzy Supernat

27. Planning and Decision Making • Stage 4: Deciding upon the best solution • There are four criteria for picking the best from among the possible solutions: • risk • economy of effort • timing • limitation of resources dr hab. Jerzy Supernat

28. Planning and Decision Making Stage 5: Converting the decision into effective ac-tion (…) it is of the essence of manager’s decision that other people must apply it to make it effective. A manager’s de-cision is always a decision concerning what other people should do. (…) It requires that any decision become „our decision” to the people who have to convert it into action. This in turn means that they have participate responsibly in making it. dr hab. Jerzy Supernat

29. Planning and Decision Making Decision making and problem solving Problem solvingsensu largo Problem solvingsensu stricto Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 Decision makingsensu stricto Decision makingsensu largo Decision makingsensu largissimo dr hab. Jerzy Supernat