The document discusses the decision making process which includes identifying a problem, criteria for making a decision, developing alternatives, analyzing options, selecting an alternative, implementing it, and evaluating the results. It also covers types of decisions, conditions for decision making, common decision making errors, and different types of plans used in organizations.

1. Mgt 101
Planning

2. Decision Making Process
Identification of a problem
Decision – A choice from
Identification of Decision Criteria two or more alternatives
Allocation of weights to criteria Decision Making Process – A
set of eight steps that
Development of alternatives include identifying a
problem, selecting an
alternative and evaluating
Analysis of Alternatives
the decision’s effectiveness.
Selection of an Alternative
Problem – A discrepancy
between an existing and a
Implementation of the Alternative desired state of affairs.
Evaluation of Decision Effectiveness

3. Making Decisions
Rational Decision Making – Decision-making
behaviour where choices are consistent and
value-maximizing within specified constraints.
Intuitive decision making – Making decisions on
the basis of experience, feelings and accumulated
judgment.
Programmed Decision – A repetitive decision that
can be handled by a routing approach.

4. Decide?
Structured Problems – Straightforward, familiar, and
easily defined problems.
Procedure – A series of interrelated sequential steps that
can be used to respond to a well-structured problem.
Rule – An explicit statement that tells managers what
they can or cannot do.
Policy – A guideline for making decisions.

5. Decision Making Conditions
Certainty – A situation in which a manager can
make accurate decisions because all outcomes
are known.
Risk – A situation in which the decision maker is
able to estimate the likelihood of certain
outcomes.
Uncertainty –A situation in which a decision maker
has neither certainty nor reasonable probability
estimates available.

6. Common Decision-Making Errors
Anchoring Effect – Describes when decision makers
fixate on initial information as a starting point
and then, once set, fail to adequately adjust for
subsequent information.
Selective Perception Bias – Decision makers
selectively organize and interpret events based
on their biased perceptions.
Availability Bias – Decision makers tend to
remember events that are the most recent and
vivid in their memory.

7. Common Decision-Making Errors
• Self serving
• Overconfidence
• Immediate Gratification
• Randomness

8. Types of Plans

9. Plans
Strategic Plans – Plans that apply to the entire
organization, establish the organization’s overall goals
and seek to position the organization in terms of its
environment.
Operational Plans – Plans that specify the details of how
the overall goals are to be achieved.
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Long-term – Plans with a time frame beyond 3 years.
Short-term – Plans covering 1 year or less.

10. What is Planning?
Defining organization’s goals, establishing overall
strategy and developing plans.
Reasons:
1. Provides Direction
2. Reduces Uncertainty
3. Minimizes waste and redundancy
4. Establishes goals and objectives
5. Is associated with positive financial results.