UNIT -2 PLANNING AND DECISION MAKING

Management is a universal phenomenon. It is a very popular and

widely used term. All
organizations business, political, cultural or social are involved in management
because it is the
management which helps and directs the various efforts towards a definite
purpose. According to
Harold Koontz, “Management is an art of getting things done through and with
the people in
formally organized groups.” It is an art of creating an environment in which people
can perform and
individuals and can co-operate towards attainment of group goals . Management is
a purposive‖
activity. It is something that directs group efforts towards the attainment of certain
pre – determined
goals. Management is a purposive activity. It is something that directs group
efforts towards the
attainment of certain pre-determined goals
Management is a universal phenomenon. It is a very popular and
widely used term. All
organizations business, political, cultural or social are involved in management
because it is the
management which helps and directs the various efforts towards a definite
purpose. According to
Harold Koontz, “Management is an art of getting things done through and with
the people in
formally organized groups.” It is an art of creating an environment in which people
can perform and
individuals and can co-operate towards attainment of group goals . Management is
a purposive‖
activity. It is something that directs group efforts towards the attainment of certain
pre – determined
goals. Management is a purposive activity. It is something that directs group
efforts towards the
attainment of certain pre-determined goals
INTRODUCTION:
Planning is the fundamental and important function of management. Planning is
the primary function of management. It is a process of setting goals and choosing
the means to achieve these goals. A plan is a predetermined course of action to
achieve a specified goal. Planning is deciding in advance what is to be done,
when, where, how and by whom it is to be done. Planning bridges the gap from
where we are to where we want to go.

1|Page Planning and Decision Making|YIASCM

Planning is the starting point of management. All other functions of management
are related to and dependent on planning function. It helps to visualise the
future problems and keeps the management ready with possible solutions.
Planning involves selecting mission and objectives and the action to achieve
them. Planning requires decision making to choose from available future course
of action. Planning is necessary to ensure proper utilisation of human and non-
human resources.
DEFINITIONS OF PLANNING
Koontz and O’Donnell defines “Planning is deciding in advance what to do, how
to do it, when to do it and who is to do it.”
James Stoner wrote “Planning is the process of establishing goals and a suitable
course of action for achieving those goals.”
George Terry stated “Planning is the selecting and relating of facts and the
making and using of assumptions regarding the future in the visualisation and
formulation of purposed activities believed necessary to achieve desired results.”
According to Billy E. Goetz, “Planning is fundamentally choosing and a planning
problem arises when an alternative course of action is discovered.”

TYPES OF PLANS
There are many types of plans. They are:
1. STANDING OR REPEATED-USE PLANS AND SINGLE-USE PLANS
(A) STANDING PLANS OR REPEATED-USE PLANS
Standing or repeated-use plans are plans which are to be used repeatedly (i.e.,
over and over again) over a long period of time for tackling frequently recurring
problems and issues. They give readymade answers to issues which occur again
and again. Standing plans serve as guidelines for managerial decision-making
and actions. They make managerial decisions and actions easy and increase
managerial efficiency, as they offer standard procedures for tackling similar and
frequently recurring problems and issues.
Standing plans include many components or derivating plans like (a) objectives,
(b) policies, (c) procedures, (d) methods, (e) rules and (f) strategies.
B) SINGLE-USE PLANS OR AD HOC PLANS
Single-use plans are plans which are to be used only in specific situations and
for tackling specific matters. In other words, they are plans for handling non-
repetitive and specific problems. As they are for specific matters only, single-use
plan or ad hoc plan for one situation cannot be used in another situation.

2|Page Planning and Decision Making|YIASCM

Single-use plans include components or derivation plans like (a) programmes, (b)
Schedules, (c) projects and (d) budgets.

2. FINANCIAL PLANS AND NON-FINANCIAL PLANS

(A) Financial Plans or Cash Plans:
Financial plans or cash plans are plans which relate to the monetary or financial
resources of the concern. They determine the sources from which finance can be
secured and the amounts which can be allocated to various purposes.
(B) Non-financial or Non-Cash Plans:
Non-financial plans or non-cash plans are plans which relate to physical
resources, and not to financial resources, of the concern. It may be noted that
though financial plans are more important than non-financial plans, for the
smooth running of a business, non-financial plans are as important as financial
plans.
3. FORMAL PLANS AND INFORMAL PLANS
(A) Formal Plans:
Formal plans are plans which are reduced to black and white (i.e. put on paper).
In other words, formal plans are plans which specify in writing the specific
objectives to be achieved and the steps to be taken to achieve those objectives.
Formal plans are systematic and rational They are quite necessary for the
successful running of a concern.
(B) Informal Plans:
Informal plans are mere thinking by some individuals of a concern. of course,
informal plans may become the basis for formal plans in future. Informal plans
promote unhealthy tendencies like carelessness, ineffective employee
performance, etc. Informal plans are not of much use for the smooth running of
the enterprise.
4. SPECIFIC PLANS AND ROUTINE PLANS
(A) Specific Plans:
Specific plans are plans for specified or particular purposes.
Preparation of specific plans is a difficult task, because the methods to be
determined for specific purposes have to be specially planned and formulated.
(B) Routine Plans:
Plans which are routine or mechanical are called Routine Plans. Preparation of
routine plans is not difficult.

3|Page Planning and Decision Making|YIASCM

In the case of routine plans, the methods determined for accomplishing the
objectives of the organisation will remain the same during a particular period
without major changes.
5. ADMINISTRATIVE PLANS AND OPERATIVE PLANS
(A) Administrative Plans:
Administrative plans are plans which determine the basis of action for the whole
organisation as well as for the various segments of the organisation for a
particular period. Administrative plans are done by the middle level
management, and they provide guidelines for operative plans. Administrative
plans are stated in general terms and they can be modified to suit the changing
conditions. Administrative plans, generally, cover areas, such as planning a new
product, determining the quantity of a product, fixation of sales limit, estimation
of return on investment, etc.
(B) Operative Plans:
Operative plans are plans which are concerned with the actual execution of day-
to-day operations of the concern. Operative plans are, generally, for a short
period. They are prepared by the lower level of management who put the
administrative plans into action. Operative or operating plans cover aspects,
such as preparation of sales programme, planning of production activities, etc.
6. LONG TERM PLANS AND SHORT TERM PLANS
(A)Long term plans:
Long term plans generally cover a period ranging from three years to twenty
years or even more. The period depends upon a number of internal and external
factors, such as, nature of the business, uncertainties involved, government
policies, competitor’s actions etc.
These plans set long-term goals for the enterprise and specific strategies, policies
and programmes to attain these goals. They cover all the functional areas of the
business. Long term plans involve the analysis of environmental factors and an
attempt to anticipate, analyse and make decisions about long term problems and
issues.
(B) Short term plans:
Short term plans are concerned with the determination of short term activities to
accomplish long term objectives. They relate to a relatively short period (less than
one year).
Short term plans are prepared to achieve short term goals. They are quite specific
and action oriented. Their preparation is the responsibility of lower level
manager. Short term plans are prepared with reference to long term plans
because they are instrumental in implementing long term plans.

4|Page Planning and Decision Making|YIASCM

7. STRATEGIC PLANS AND TACTICAL PLANS
(A) Strategic Plans:
Strategic plans are plans designed to achieve the overall or general objectives of
the organisation. Strategic plans are done by the top level management. They are
concerned with the determination of the overall or general objectives of the
enterprise, the formulation of policies and the determination of strategies to be
adopted and other steps to be taken to accomplish those objectives. They serve
as the basis for all other plans, in the sense that all other plans are made on the
basis of strategic plans. They are intended to contribute to the growth, stability
and public image of the enterprise.
Strategic plans are made keeping in mind the strength and weakness of the
enterprise, the resources currently available with the concern and likely to be
available in the future, the moves of the competitors, the consumer preferences,
market forces, plan for expansion and diversification, and economic, political and
social environment.
(B) Tactical Plans:
Tactical plans are plans which are concerned with the planning of detailed
operations needed to achieve the organizational goals. Tactical plans are
intended to support the implementation of strategic plans, whenever some
difficulties are faced in the execution of strategic plans. They involve formulation
of specific functional and sub-plans to implement the strategic plans. They are
done by the middle level management.
Tactical plans are intended to meet any changes in internal organisation and
external environment. For instance, difficulty in procuring raw materials,
changes in prices of products, unexpected moves by the competitors and other
unforeseen situations are met with the help of tactical plans. It may be noted
that the success of tactical plans depends upon the speed and flexibility with
which management acts to meet the sudden and unforeseen situations.

STEPS IN PLANNING PROCESS

Planning is one of the great importance to an organisation. The entire process of
planning should be carried out in a systematic manner. The planning process
involves the following steps:
1.Determination of the Objectives: The first step in planning is to identify
certain objectives. The objectives set must clearly indicate what is to be achieved,
where action should take place, who should perform it and when it is to be
accomplished. The objectives should be established for the entire organisation

5|Page Planning and Decision Making|YIASCM

and for each and every department. Planning has no utility if it is not related to
certain objectives.
2.SWOT Analysis: SWOT analysis means to study Strengths, Weaknesses,
Opportunities and Threats in the business. Before making plan, SWOT analysis
has to be done. Internal environment and external environment must study
properly. The internal environment consists of manpower, materials,
management-labour relations etc. External environment consists of government
policies, competitions, consumer’s preferences etc.
3.Development of Planning Premises: The next step is the establishment of
planning premises. Planning premises are the assumptions and predictions
about the future. The assumptions are the basis of planning. Forecasting is
important in premising. It helps in making realistic assumptions about sales,
costs, prices, products etc. in future. This requires a collection of data on present
trends and future possibilities.
4.Framing Alternative Plans: The next logical step in planning is to determine
and evaluate alternative courses of action. There are alternate plans available for
the achievement of the objectives. The manager Should try to find out all the
possible alternatives. At the time of developing alternatives, he should screen out
most viable alternatives. So, he has to analyse in detail a limited number of
alternatives.
5.Evaluation of Alternatives: Next step is to evaluate available alternatives.
Alternatives are to be evaluated in terms of costs, benefits, risks, etc. One
alternative may appear profitable but require heavy cash outlay whereas the
other alternative is less profitable but involve more risk. Many quantitative
techniques are available to evaluate alternatives. Evaluation of alternatives helps
the planner to select suitable plan of action.
6.Selecting Best Alternative: The sixth step in planning is selecting a course of
action from among alternatives. In fact, it is the point of decision making. After
evaluating the various alternatives, the best alternative which gives more benefits
should be selected for implementation.
7.Formulating Derivative Plans: To make any planning process complete, the
final step is to formulate derivative plans to give effect to and support the basic
plan. For example, if Indian Airlines decide to run Jumbo Jets between Delhi and
Patna, obliviously, a number of derivative plans have to be framed to support the
decision, e.g., a staffing plan, operating plans for fuelling, maintenance, stores
purchase, etc. Each manager and department of the organisation is to contribute
to the accomplishment of the master plan on the basis of the derivative plans.
8.Establishing Sequence of Activities: Timing and sequence of activities are
determined after formulating basic and derivative plans, so that plans may be
put into action. The starting and finishing times are fixed for each piece of work,
so as to indicate when and within what time that work is to be commenced and
completed. To maintain a smooth flow of work, the sequence of operation must

6|Page Planning and Decision Making|YIASCM

 be decided.
9.Implementation: The plan should be communicated to all persons concerned
in the organisation. Its objectives and course of action must be clearly defined
leaving no ambiguity in the minds of those who are responsible for its execution.
Planning is effective only when the persons involved work in a team spirit and all
are committed to the objectives, policies, programmes and strategies envisaged in
the plan.
10.Follow-up: It is also required to see whether the plan is working well in the
present situation. If conditions have changed, the current plan has become
outdated or inoperative, it should be replaced by another plan. A regular follow-
up is necessary and desirable from effective implementation and accomplishment
of objectives.

ENVIRONMENTAL ANALYSIS AND DIAGNOSIS (INTERNAL AND

EXTERNAL ENVIRONMENT)
Environmental analysis involves assessing and understanding both the internal and
external environments of an organization. This evaluation helps in identifying
opportunities, threats, strengths, and weaknesses, enabling better decision-making
and strategic planning. Here are the key components of internal and external
environmental analysis:
Internal Environment Analysis:
1.Organizational Structure: Examining the formal structure, hierarchy, and
reporting relationships within the organization. Understanding the structure helps
in determining the flow of information, decision-making processes, and the level of
flexibility.
2.Resources: Evaluating the organization's resources such as human capital,
financial assets, technology, equipment, and infrastructure. Assessing the
availability and effectiveness of resources helps in leveraging strengths and
addressing weaknesses.
3.Capabilities and Core Competencies: Identifying the unique strengths, skills,
and capabilities of the organization. These may include specialized knowledge,
patents, innovative processes, or exceptional talent that provide a competitive
advantage.
4.Culture and Values: Assessing the organizational culture, values, norms, and
beliefs that guide behaviors and decision-making. Understanding the culture helps
in aligning strategies and ensuring compatibility with the organizational values.
5.Leadership and Management Style: Analyzing the leadership style,
management practices, and the effectiveness of leadership in guiding the
organization towards its objectives.

External Environment Analysis:

1.PESTEL Analysis:
A.Political Factors: Examining government policies, regulations, stability, and
potential political influences on the organization.

7|Page Planning and Decision Making|YIASCM

B.Economic Factors: Analyzing economic conditions, trends, inflation rates, GDP
growth, currency fluctuations, and market dynamics.
C.Social Factors: Understanding societal trends, demographics, cultural shifts,
consumer behavior, and lifestyle changes.
D.Technological Factors: Assessing technological advancements, innovations,
R&D trends, and their impact on the industry.
E.Environmental Factors: Considering environmental concerns, sustainability
issues, climate change, and their effects on business operations.
F.Legal Factors: Reviewing laws, regulations, compliance requirements, and legal
frameworks that affect the industry or organization.

2.Competitive Analysis:
Identifying competitors, their strengths, weaknesses, market share, strategies, and
their potential impact on the organization's market position.

3.Market Analysis:
Evaluating market trends, customer preferences, demand-supply dynamics, and
potential market opportunities or threats.

4.Stakeholder Analysis:
Identifying key stakeholders (such as customers, suppliers, investors, government,
and communities) and understanding their interests, concerns, and influence on
the organization.

5.SWOT Analysis:
Integrating internal and external analyses to identify the organization's strengths,
weaknesses, opportunities, and threats. This helps in formulating strategies that
leverage strengths and opportunities while mitigating weaknesses and threats.

Effective environmental analysis and diagnosis provide insights that guide

strategic decision-making, formulation of business strategies, and proactive
responses to changes and challenges in the business environment.

DECISION MAKING

Introduction

Decision making is an essential aspect of modern management. It is a primary

function of management. A manager’s major job is sound/rational decision
making. He takes hundreds of decisions consciously and subconsciously. Decision
making is the key part of manager's activities. Decisions are important as they
determine both managerial and organisational actions. It represents a well-
balanced judgment and a commitment to action.
It is rightly said that the first important function of management is to take
decisions on problems and situations. Decision making pervades all managerial
actions. It is a continuous process. Decision making is an indispensable
component of the management process itself.

8|Page Planning and Decision Making|YIASCM

Definitions of Decision Making
Haynes and Massie defines “A decision is a course of action which is consciously
chosen for achieving a desired result.”

The Oxford Dictionary defines the term decision making as “the action of carrying
out or carrying into effect.”

According to James Stoner, “Decision making is the process of identifying and

selecting a course of action to solve a specific problem.”

Trewartha and Newport defines, “Decision making involves the selection of a

course of action from among two or more possible alternatives in order to arrive at
a solution for a given problem.”

IMPORTANCE OF DECISION-MAKING:

Decision-making is a critical aspect of management and plays a vital role in the

success and effectiveness of individuals and organizations. Here are the key points
highlighting the importance of decision-making:
1.Strategic Importance: Decision-making is essential for setting organizational
goals and charting the course of action to achieve them. Strategic decisions shape
the long-term direction of the organization.

2.Problem-Solving: Effective decision-making helps in addressing problems and

challenges faced by organizations. It involves identifying issues, analyzing
alternatives, and selecting the best course of action to resolve them.

3.Resource Allocation: Decision-making involves allocating resources such as

finances, human capital, time, and materials efficiently. Proper resource allocation
is crucial for maximizing productivity and achieving goals.

4.Innovation and Growth: Decision-making encourages innovation by fostering

an environment where new ideas and opportunities are explored. It enables
organizations to adapt to changing markets and technologies, fostering growth and
sustainability.

5.Risk Management: Decision-making involves evaluating risks and uncertainties

associated with various choices. It helps in assessing potential outcomes,
minimizing risks, and making informed decisions.

6.Enhanced Efficiency: Efficient decision-making streamlines processes,

eliminates inefficiencies, and optimizes operations within an organization. It helps
in achieving goals in a timely manner.

7.Empowerment and Leadership: Decision-making empowers individuals and

teams by involving them in the process. It fosters a culture of collaboration,

9|Page Planning and Decision Making|YIASCM

enhances morale, and encourages leadership development.

8.Customer Satisfaction: Decisions made with a focus on customer needs and

preferences can lead to improved products, services, and customer satisfaction,
which is crucial for business success.

9.Competitive Advantage: Strategic and timely decisions can provide a

competitive edge by capitalizing on market opportunities and staying ahead in a
dynamic business environment.

10.Accountability and Responsibility: Decision-making establishes

accountability as decision-makers are responsible for the outcomes of their
decisions. It creates a framework for evaluating performance and learning from
successes or failures.

PROCESS OF DECISION MAKING

Decision making involves a number of steps which need to be taken in a logical
manner. This is treated as a rational or scientific ‘decision making process’ which
is lengthy and time-consuming. Following are the important steps of decision
making.

1.Identification of Problem: Identification of the problem is the first step in the

process of decision making. It is rightly said that a problem well-defined is a
problem half-solved. Information relevant to the problem should be gathered so
that critical analysis of the problem is possible. This is how the problem can be
diagnosed. Clear distinction should be made between the problem and the
symptoms which may cloud the real issue.

2.Analysing the Problem: After defining the problem, the next step in the decision
making process is to analyse the problem in depth. In this step, the problem is
thoroughly analysed. This is necessary to classify the problem in order to know who
must take the decision and who must be informed about the decision taken. Various
factors have to be considered like impact of decision, practical implementation,
uniqueness of decision etc.
3.Colleting Relevant Data: After defining the problem and analysing its
nature, the next step is to obtain the relevant information/data about it.
Due to new development in the field of information technology, lots of
information is available in the business world. All available information
should be utilised fully for analysis of the problem. This brings clarity to
all aspects of the problem.
4.Framing Alternative Solutions: After the problem has been defined
and analysed on the basis of relevant information, the manager has to

10 | P a g e Planning and Decision Making|YIASCM

develop alternative solutions that could be used to solve the problem.
Only realistic alternatives should be considered. If necessary, group
participation techniques may be used while developing alternative
solutions.
5.Evaluation of Alternatives: Next step is to evaluate available
alternatives. Alternatives are to be evaluated in terms of costs, benefits,
risks, etc. One alternative may appear profitable but require heavy cash
outlay whereas the other alternative is less profitable but involve more
risk. Many quantitative techniques are available to evaluate alternatives.
Evaluation of alternatives helps the manager to select decision.
6.Selecting Best Alternative: The sixth step in decision making is
selecting the best decision among available alternatives. After evaluating
the various alternatives, the best alternative which gives more benefits
should be selected for implementation.
7.Implementation: After the selection of the best decision, the next step
is to convert the selected decision into an effective action. Without such
action, the decision will remain merely a declaration of good intentions.
Here, the manager has to convert ‘his decision’ into ‘their decision’
through his leadership. For this, the subordinates should be taken in
confidence and they should be convinced about the correctness of the
decision.
8.Follow-up: Feedback is the last step in the decision making process. It
is also required to see whether the decision implemented is solving the
problem or not. Feedback is possible in the form of organised
information, reports and personal observations. Feedback is necessary
to decide whether the decision already taken should be continued or be
modified in the light of changed conditions.

TECHNIQUES OR BASIS FOR DECISION-MAKING:

Decision-making has become a complex problem. A number of techniques,

extending from guessing to mathematical analyses, are used for decision-making

11 | P a g e Planning and Decision Making|YIASCM

process. The selection of an appropriate technique depends upon the judgment of

decision-maker.

Decision-making is a step-wise process. There are certain highly effective as well

as systematic approaches that can help us in taking the right decisions with great
consistency. While there is nothing that can guarantee error-free decision-making,
some decision-making methods can reduce the likelihood of making poor
decisions.
1. COMMAND METHOD
In this method, decision-making is an executive power, and the decisions are
taken by a central authority. This is an authoritative or dictatorial method as it
doesn’t necessarily involve the opinion of other stakeholders. One of the major
drawbacks of this method is ignorance about alternate options or opinions.

At the same time, this is also the fastest and clearest decision-making process as
it doesn’t involve conflicts and discussions with other people. This decision-
making technique is beneficial in emergencies when there is not enough time to
hold discussions or undertake lengthy analysis or review processes.

2. CONSULTATION
Consultation is the commonest among all the decision-making techniques for
taking long-term decisions. Under this technique, the decision-maker seeks inputs
from others and considers them diligently, but the eventual power of decision
remains with her.

It usually takes longer when you apply this technique compared to the time the
command decision-making methods as it involves taking the opinions of multiple
people and in-depth evaluation and discussions. This process makes others feel
valuable as it takes into account their opinions. It can do wonders for employees’
satisfaction and loyalty as they would feel involved with the decision-making
process even though the final decision is not taken by them.

3.VOTING
Voting is considered one of the most democratic techniques of decision-making in
management. During this process the available options are brought to the notice
of all group members and each action is deliberated upon. Once the discussions
are complete, the present members vote in favor of the option they find most
suitable. The option selected by the majority of the voters is regarded as the final
decision.

Voting is the preferred decision-making method among committees, boards of

directors, or senior company executives. Voting techniques of decision-making in
management are time-bound which ensures that the process does not drag for too
long.

12 | P a g e Planning and Decision Making|YIASCM

4.BRAINSTORMING
Brainstorming is among the various techniques of decision-making that proves
beneficial when there are no clear options in sight. Under this technique, all group
members get together to find options through discussion and debate.
Decisions related to strategy, policy-making, laying down of rules and procedures
and operations usually involve a lot of brainstorming. This is one of the lengthier
processes of decision-making as there are usually a lot of ideas and differences of
opinions that have to be overcome before a final decision is taken.

Nominal group technique (NGT) is defined as a structured method for

group brainstorming that encourages contributions from everyone and facilitates
quick agreement on the relative importance of issues, problems, or solutions.
Team members begin by writing down their ideas, then selecting which idea they
feel is best. Once team members are ready, everyone presents their favorite idea,
and the suggestions are then discussed and prioritized by the entire group using a
point system. NGT combines the importance ratings of individual group members
into the final weighted priorities of the group.

5.DELPHI TECHNIQUE

The Delphi Technique refers to the systematic forecasting method used to gather
opinions of the panel of experts on the problem being encountered, through the
questionnaires, often sent through mail. In other words, a set of opinions
pertaining to a specific problem, obtained in writing usually through
questionnaires from several experts in the specific field is called as a Delphi
technique.

6. DEVIL’S ADVOCACY

The devil's advocacy decision-making technique is where an individual or a group

is selected to become the critic in the proposed decision. ... The facilitator is
focused on what needs to be accomplished and appropriate levels of participation,
all in an effort to ensure quality decisions are made.

The role of devil's advocate is to ensure idea's are sound, by interrogating the
thought processes behind them—especially compared to direct alternatives. Note
that by proper discussion and healthy analysis of an idea, a team can become
more aligned and confident in their decisions.

7.QUALITY CIRCLES

Quality Circles was started in Japan in the early 1960s

It is a small group of employees from the same department who volunteer to meet
regularly to identify, analyze, and solve problems about their work

13 | P a g e Planning and Decision Making|YIASCM

8.DIALECTICAL ENQUIRY:

This technique is developed by Schweiger, Sandberg and Ragan in 1986. This is an

alternative approach for controlling group phenomenon of groupthink (group
limitations) in decision making. In this technique, two or more divergent groups
are formed to give a range of views on a specific problem. Each group is internally
homogenous but different from one another. Each group meets separately
identifying its position and presents "for" and 'against' position to the other
groups. Each group defends their opinion on what they have presented. Attempt is
made to achieve consensus among the groups. Finally consensus decision will be
accepted which meets the requirements of all group positions. It also allows final
refinement of suggested solution to the problem. Not the full consensus but the
strategy which fulfils the organisation's planning and objective is accepted for
decision making.

9. MARGINAL COST ANALYSIS

It is the future costs and benefits which influences the decision taken. Decision
maker compares the marginal benefit (additional benefit) of introducing new
solution against the marginal cost (additional cost) of the things that is given up
by spending more time and cost. Marginal benefits must be more than the
marginal cost. It would be irrational decision marginal costs are more than the
benefits.

10. NOMINAL GROUP TECHNIQUE:

Nominal group technique (NGT) is defined as a structured method for

group brainstorming that encourages contributions from everyone and facilitates
quick agreement on the relative importance of issues, problems, or solutions.
Team members begin by writing down their ideas, then selecting which idea they
feel is best. Once team members are ready, everyone presents their favorite idea,
and the suggestions are then discussed and prioritized by the entire group using a
point system. NGT combines the importance ratings of individual group members
into the final weighted priorities of the group.

14 | P a g e Planning and Decision Making|YIASCM