Planning in Technology Management

Planning in Technology Management | urdu hindi | TM | Technology Management lecture | TM Course | 32

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Planning

Decision Making

Decision

The Decision-Making Process

The Situation

Step 1: Identifying the Problem

Problem

Characteristics of Problems

Step 2: Identifying Decision Criteria

Step 3: Allocating Weights to the Criteria

Decision criteria are not of equal importance

Criteria and Weights for Computer Replacement Decision

Step 4: Developing Alternatives

Identifying viable alternatives

Step 5: Analyzing Alternatives

Appraising each alternative’s strengths and weaknesses

Assessed Values of Laptop Computers Using Decision Criteria

Step 6: Selecting an Alternative

Choosing the best alternative

Step 7: Implementing the Alternative

Putting the chosen alternative into action

Evaluation of Laptop Alternatives Against Weighted Criteria

Step 8: Evaluating the Decision’s Effectiveness

The soundness of the decision is judged by its outcomes

Decision Making for Today’s World

Guidelines for making effective decisions:

1. Understand cultural differences.

2. Know when it’s time to stop.

3.Use an effective decision-making process. This process has six characteristics:

4.Build an organization that can spot the unexpected and quickly adapt to the changed environment. Karl Weick calls such organizations highly reliable organizations (HROs) and says they share five habits:

What Is Planning?

A primary managerial activity that involves:

Defining the organization’s goals

Establishing an overall strategy for achieving those goals

Developing plans for organizational work activities Formal planning

Specific goals covering a specific time period

Written and shared with organizational members

Why Do Managers Plan?

Provides direction

Reduces uncertainty

Minimizes waste and redundancy

Sets the standards for controlling

Planning and Performance

Formal planning is associated with:

Higher profits and returns on assets.

Positive financial results.

The quality of planning and implementation affects performance more than the extent of planning.

The external environment can reduce the impact of planning on performance.

Formal planning must be used for several years before planning begins to affect performance.

How Do Managers Plan?

Elements of Planning Goals (also Objectives)

Desired outcomes for individuals, groups, or entire organizations

Provide direction and evaluation performance criteria

Plans

Documents that outline how goals are to be accomplished

Describe how resources are to be allocated and establish activity schedules

Types of Goals

Financial Goals are related to the expected internal financial performance of the organization.

Strategic Goals are related to the performance of the firm relative to factors in its external environment (e.g., competitors).

If managers emphasize only one goal, other goals necessary for long-term success are ignored.

SMART Objectives

Types of Goals (cont’d)

Stated goals can be found in an organization’s charter, annual report, or public relations announcements, or in public statements made by managers.

These broadly-worded official statements of the organization (intended for public consumption) that may be irrelevant to its real goals (what actually goes on in the organization).

Strategic Plans

Apply to the entire organization.

Establish the organization’s overall goals.

Seek to position the organization in terms of its environment.

Cover extended periods of time.

Operational Plans

Specify the details of how the overall goals are to be achieved.

Cover a short time period.

Long-Term Plans

Plans with time frames extending beyond three years

Short-Term Plans

Plans with time frames of one year or less

Directional Plans

Flexible plans that set out general guidelines and provide focus, yet allow discretion in implementation

Specific Plans

Plans that are clearly defined and leave no room for interpretation

Single-Use Plan

A one-time plan specifically designed to meet the need of a unique situation

Standing Plans

Ongoing plans that provide guidance for activities performed

repeatedly

Setting Goals and Developing Plans

Traditional Goal Setting

Broad goals are set at the top of the organization.

Goals are then broken into sub-goals for each organizational level.

Assumes that top management knows best because they can see the “big picture”.

Goals are intended to direct, guide, and constrain from above.

Goals lose clarity and focus as lower-level managers attempt to interpret and define the goals for their areas of responsibility.

Exhibit 7–2 The Downside of Traditional Goal Setting

Maintaining the Hierarchy of Goals

Means–Ends Chain

The integrated network of goals that results from establishing a

clearly-defined hierarchy of organizational goals.

Achievement of lower-level goals is the means by which to reach higher-level goals (ends).

Management By Objectives (MBO)

Specific performance goals are jointly determined by employees and managers.

Progress toward accomplishing goals is periodically reviewed.

Rewards are allocated on the basis of progress towards the goals.

Key elements of MBO:

Goal specificity, participative decision making, an explicit performance/evaluation period, feedback

Exhibit 7–3 Steps in a Typical MBO Program

The organization’s overall objectives and strategies are formulated.

Major objectives are allocated among divisional and departmental units.

Unit managers collaboratively set specific objectives for their units with their managers.

Specific objectives are collaboratively set with all department members.

Action plans, defining how objectives are to be achieved, are specified and agreed upon by managers and employees.

The action plans are implemented.

Progress toward objectives is periodically reviewed, and feedback is provided.

Successful achievement of objectives is reinforced by performance- based rewards.

Does MBO Work?

Reason for MBO Success

Top management commitment and involvement Potential Problems with MBO Programs

Not as effective in dynamic environments that require constant resetting of goals.

Overemphasis on individual accomplishment may create problems with teamwork.

Allowing the MBO program to become an annual paperwork shuffle.

Exhibit 7–4 Well-Written Goals

Steps in Goal Setting

Review the organization’s mission statement.

Do goals reflect the mission?

Evaluate available resources.

Are resources sufficient to accomplish the mission?

Determine goals individually or with others. Are goals specific, measurable, and timely?

Write down the goals and communicate them. Is everybody on the same page?

Review results and whether goals are being met.

What changes are needed in mission, resources, or goals?

Developing Plans: Contingency Factors in Planning

Manager’s level in the organization

Strategic plans at higher levels

Operational plans at lower levels

Degree of environmental uncertainty

Stable environment: specific plans

Dynamic environment: specific but flexible plans

Length of future commitments

Commitment Concept: current plans affecting future commitments must be sufficiently long-term to meet those commitments.

Exhibit 7–5 Planning in the Hierarchy of Organizations

Developing Plans: Approaches to Planning

Establishing a formal planning department

A group of planning specialists who help managers write organizational plans.

Planning is a function of management; it should never become the sole responsibility of planners.

Involving organizational members in the process

Plans are developed by members of organizational units at various levels and then coordinated with other units across the organization.

Contemporary Issues in Planning

Criticisms of Planning

Effective Planning in Dynamic Environments

Criticisms of Planning

Planning may create rigidity.

Plans cannot be developed for dynamic environments.

Formal plans cannot replace intuition and creativity.

Planning focuses managers’ attention on today’s competition

not tomorrow’s survival.

Formal planning reinforces today’s success, which may lead to tomorrow’s failure.

Just planning isn’t enough.

Effective Planning in Dynamic Environments

Develop plans that are specific but flexible.

Understand that planning is an ongoing process.

Change plans when conditions warrant.

Persistence in planning eventually pay off.

Flatten the organizational hierarchy to foster the development of planning skills at all organizational levels.

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Planning in Technology Management