Planning and Decision Making

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What is the meaning of planning?

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Planning is a blueprint of the course of action to be followed in the future, requiring imagination, foresight, and sound judgment.

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What are the characteristics of sound business plans?

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Objective oriented, clear, logical, simple, controllable, flexible, stable, complete, and integrated.

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What are the steps in the planning process?

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1. Setting objectives 2. Planning premises 3. Alternate course of action 4. Evaluating alternate courses 5. Selecting the best alternative 6. Implementing the plan 7. Follow up

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What are the limitations of planning?

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Planning can lead to rigidity, may not work in dynamic environments, reduces creativity, involves huge costs, is time-consuming, and does not guarantee success.

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What are the types of plans?

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1. Standing or multi-use plans 2. Single-use or ad hoc plans

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What is the definition of decision-making?

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Decision-making is the process of selection from a set of alternative courses of action to fulfill the objective of the decision problem.

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What are the characteristics of decision-making?

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Goal-oriented, choice of the most appropriate course of action, continuous process, intellectual process, dynamic process, situational, and pervasive.

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What are the types of managerial decisions?

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1. Programmed & Non-Programmed Decision 2. Strategic & Routine Decision 3. Administrative Decision 4. Individual & Group Decision

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What is the process of decision-making?

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1. Identify the problem 2. Diagnose the problem 3. Discover alternatives 4. Evaluate the alternatives 5. Choose the best alternative 6. Implement & Follow up

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What is the Rational Economic Man model?

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It assumes that decision-makers are always rational and choose the alternative that provides maximum gain.