PLANNING

Pertemuan ke 3 & 4
Kompetensi Khusus:
Students can explain the planning aspects of the
organization that consist of decision making and
strategic and operations planning (C2)

Materi:
- Creative Problem Solving and Decision Making
- Strategic and Operations Planning
 Creative Problem
Solving
and Decision Making
 The Relationship among Objectives,
Problem Solving, and Decision Making
• Problem
– Exists whenever objectives are not being met.
– What is happening vs. what is wanted to
happen
• Problem Solving
– The process of taking corrective action to
meet objectives.
• Decision Making
– The process of selecting an alternative course
of action that will solve a problem.
– First decision is whether to take corrective
 Decision-Making Styles
• Reflexive Style
– Makes quick decisions without taking the
time to get all the information that may be
needed and without considering all the
alternatives.
• Reflective Style
– Takes plenty of time to make decisions,
gathering considerable information and
analyzing several alternatives.
• Consistent Style
– Tends to make decisions without either
 Decision Structure
• Programmed Decisions
– Recurring or routine situations in which the
decision maker should use decision rules or
organizational policies and procedures to
make the decision.
• Nonprogrammed Decisions
– Significant and nonrecurring and nonroutine
situations in which the decision maker
should use the decision-making model.
 Decision-Making Conditions
• Certainty
– Each alternative’s outcome is known in
advance.
• Risk
– Probabilities can be assigned to each
outcome.
• Uncertainty
– Lack of information or knowledge makes the
outcome of each alternative unpredictable
such that no probabilities can be
 Decision-Making Models
• Rational Model (Classical Model)
– The decision maker attempts to use
optimizing, selecting the best possible
alternative.
• The Bounded Rationality Model
– The decision maker uses satisficing,
selecting the first alternative that meets the
minimal criteria for solving the problem.
Generate Creative Alternatives
• Innovation
– The implementation of a new idea
• Product innovation (new things)
• Process innovation (new way of doing things)
• Creativity
– A way of thinking that generates new ideas
• The Creative Process
– Preparation
– Incubation and illumination
– Evaluation
• Brainstorming
– The process of suggesting many possible
alternatives without evaluation.
• Synectics
– The process of generating novel alternatives
through role playing and fantasizing.
• Nominal Grouping
– The process of generating and evaluating
alternatives using a structured voting
method that includes listing, recording,
clarification, ranking, discussion, and voting
to select an alternative.
• Consensus Mapping (Ringi)
– The process of developing group agreement
on a solution to a problem.
• Delphi Technique
– The process of using a series of confidential
questionnaires to refine a solution.
 Plan, Implement, and Control
• Plan
– Develop a plan of action and a schedule of
implementation.
• Implement the Plan
– Communicate and delegate for direct action.
• Control
– Use checkpoints to determine whether the
alternative is solving the problem.
– Avoid escalation of commitment to a bad
alternative.
 The Strategic and
Operational Planning
Process
 Planning Dimensions
• Planning
– Determining what you want to accomplish
and developing approaches to achieving
your objectives.
• Planning Dimensions:
 Strategic and Operational
• Strategic PlanningPlanning
– The process of developing a mission and long-
range objectives and determining in advance
how they will be accomplished.
• Operational Planning
– The process of setting short-range objectives
and determining in advance how they will be
accomplished.
• Strategy
– A plan for pursuing the mission and achieving
objectives.
The Strategic Planning Process
 Strategic Planning
• Corporate-Level Strategy
– The plan for managing multiple lines of
businesses
• Business-Level Strategy
– The plan for managing one line of business
• Functional-Level Strategy
– The plan for managing one area of the
business
 Industry and Competitive Situation Analysis
• Situation Analysis
– Focuses on those features in a company’s
environment that most directly affect its
options and opportunities.
• Five Competitive Forces (Porter)
– Rivalry among competing sellers in the
industry
– Threat of substitute products and services
– Potential new entrants
– Power of suppliers
– Power of buyers
 Competitive Advantage
• Core Competency
– A functional capability (strength) that the firm
does well and one that creates a competitive
advantage for the firm.
• Benchmarking
– The process of comparing an organization’s
products or services and processes with
those of other companies.
• Scanning the Environment
– Searching the external environment for
opportunities and threats.
 Setting Objectives
• Objectives
– State what is to be accomplished in
singular, specific, and measurable terms
with a target date.
• Goals
– Are general targets to be accomplished that
are translated into actionable objectives.
 Management by Objectives
• Management by Objectives
(MBO)
Step 1. Set individual objectives and plans.
Step 2. Give feedback and evaluate
performance.
Step 3. Reward according to performance.
• Sources of MBO Failures
– Lack of top management commitment and
follow-through on MBO.
– Employees’ negative beliefs about
management’s sincerity in its efforts to include
them in the decision-making process.
 Corporate-Level Strategy
• Grand Strategies • Growth Strategies
– Growth – Concentration

– Stability – Backward and

forward integration
– Turnaround and
retrenchment – Related and
unrelated
– Combination diversification
 Business-Level Strategies
• Adaptive Strategies
– Prospecting
• Aggressively offering new products and/or
entering new markets.
– Defending
• Staying with the present product line and
markets, and maintaining or increasing
customers.
– Analyzing
• A midrange approach between prospecting and
defending, moving cautiously into new markets.
 Competitive Strategies
• Differentiation
– Competing on the basis of features that
distinguish one firm’s products or services
from those of another.
• Cost Leadership
– The firm with the lowest total overall costs has
a competitive advantage in price-sensitive
markets.
• Focus
– Concentrating competitive efforts on a
particular market segment, product line, or
buyer group.
 Functional-Level (Operational) Strategies
• Marketing
– Responsible for determining which products
to provide, how they will be packaged, how
they will be advertised, where they will be
sold and how they will get there, and how
much they will be sold for.
• Operations
– Responsible for systems processes that
convert inputs into outputs.
• Human Resources
– Responsible for working with all the other
functional departments in the areas of
recruiting, selecting, training, evaluating,
and compensating employees.
• Finance
– Responsible for financing the business
activities by raising money through the sale
of stock or bonds or through loans, deciding
on the debt-to-equity ratio, paying off the
debt and dividends to shareholders, keeping
records of transactions, developing budgets,
and reporting financial results.
• Other Functional-Level Strategies
– Research and development (R&D) is
important to remaining competitive.
 Types of Plans
• Standing Plans
– Policies, procedures, and rules developed
for handling repetitive situations.
– Policies
• General guidelines to be followed when making
decisions.
– Procedures
• A sequence of actions to be followed in order to
achieve an objective.
– Rules
• A statement of exactly what should or should not
be done.
 Types of Plans
• Single-Use Plans
– Programs and budgets developed for
handling nonrepetitive situations.
– Program
• A set of activities designed to accomplish an
objective over a specified period of time.
– Program development
• Set project objectives.
• Break the project down into a sequence of
steps.
• Assign responsibility for each step.
• Establish starting and ending times.
– Program development
• Set project objectives.
• Break the project down into a sequence of
steps.
• Assign responsibility for each step.
• Establish starting and ending times.
• Determine the resources needed for each step.
– Budget
• Represents the funds allocated to operate a unit
for a fixed period of time.
• Is a planning tool initially and becomes a control
tool after implementation of the plan.
 Types of Plans
• Contingency Plans
– Alternative plans to be implemented if
uncontrollable events occur.
– Developing a contingency plan
• What might go wrong?
• How can I prevent it from happening?
• If it does occur, what can I do to minimize its
effect?
 Implementing and Controlling Strategies
• Implementing
– Top and middle managers plan, whereas lower-
level functional managers and employees
implement strategies.
– Successful implementation requires effective and
efficient support systems.
• Controlling
– The process of establishing and implementing
mechanisms to ensure that objectives are
achieved.
– Measuring progress toward achievement of
objectives and taking corrective action when
needed.
– Staying within the budget when appropriate or
 Summary
After studying the lesson we able to explain:
1. The Relationship among Objectives, Problem
Solving, and Decision Making
2. Decision-Making Styles
3. Decision Structure
4. Decision-Making Models
5. Generate Creative Alternatives
6. Plan, Implement, and Control
7. Planning Dimensions
8. Strategic and Operational Planning
9. Strategic Planning
10. Industry and Competitive Situation Analysis
11. Competitive Advantage
12. Management by Objectives (MBO)
13. Corporate-Level Strategy
14. Business-Level Strategies
15. Competitive Strategies
16. Functional-Level (Operational) Strategies
17. Types of Plans
18. Implementing and Controlling Strategies
THANK YOU