MGT 250 Chapter 5: Chapter 5
9 May 2018
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MGT 150 Ch. 5: Planning & Decision Making Sept. 26, 2017
▪ 5-1: Benefits & Pitfalls of Planning:
• Planning: choosing a goal & developing strategy to achieve it.
• 5-1a: Benefits: intensified effort, persistence, direction, & creation of task strategies.
• 5-1b: Pitfalls: can impede change and prevent or slow needed adaptation, planning can create a
false sense of certainty, & there is a detachment of planners.
▪ 5-2: How To Make A Plan That Works:
1. Set Goals
2. Develop Commitment
3. Develop Effective Action Plans (Who, What, When, How)
4. Track Progress Toward Goal Achievement
5. Maintain Flexibility
• 5-2a: Setting Goals: S.M.A.R.T.
o Specific
o Measurable
o Attainable
o Realistic
o Timely
• 5-2b: Developing Commitment to Goals: determination to achieve a goal.
• 5-2c: Developing Effective Action Plans: plan that lists specific steps, ppl, resources, & time
period needed to attain goal.
• 5-2d: Tracking Progress:
o Proximal Goals: short-term goals/sub-goals.
o Distal Goals: long-term goals/primary goals.
• 5-2e: Maintaining Flexibility:
o Options-Based Planning: maintaining planning flexibility by making small, simultaneous
investments in many alternative plans.
o Slack Resources: cushion of extra resources used w/ options-based planning to adapt to
unanticipated changes, problems, or opportunities.
▪ 5-3: Planning From Top to Bottom: planning works best when goals & action plans at bottom &
middle of organization support goals & action plans at top of organization; when everybody pulls in
same direction.
• 5-3a: Starting at the Top:
o Strategic Plans: overall company plans clarify how company will serve customers & position
itself against competitors over the next 2-5 yrs.
o Purpose Statement: statement of company’s purpose/reason for existing.
o Strategic Objective: more specific goal that unifies company-wide efforts, stretches &
challenges organization, & has a time frame.
• 5-3b: Bending in the Middle: middle management is responsible for developing & carrying out
tactical plans to accomplish organization’s strategic objective.
o Tactical Plans: created & implemented by middle managers that direct behavior, efforts, &
attention over next 6 months to 2 yrs.
o Management By Objectives: managers & employees:
1. Discuss possible goals.
2. Collectively select goals that are challenging, attainable, & consistent w/ company’s goals.
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