STEPS IN PLANNING

AND
DECISION MAKING

AKSHAY.MUKUND
USN:-1AP07EC007
 PLANNING
• The concept
• Plan is a commitment to a particular course of action
necessary to
achieve specific results

• Planning is determination of future course of action

• It occupies the first position in the management

process

• Without a plan there can be nothing to organize.

Without a plan,
• managers can’t lead with confidence
• There is no way to see if they stray from the
path of achieving objectives
• DEFINITION:-
• Planning is deciding in the present, what to
do in the future.
• It is a process by where companies reconcile
their resources with their objectives and
opportunities
 Basic Prerequisites

a. A scratchpad
b. Collective thinking ,if
working in team
STEPS IN PLANNING
THE STEPS ARE……
• (i) Establishing Objectives
• (ii) Collection and Forecasting of Information
• (iii) Development of Planning Premises
• (iv) Search of Alternatives
• (v) Evaluation of Alternatives
• (vi) Selection of Plan and Development of Derivative
Plans
Schematic Representation
 DECISION MAKING
• Concept:-
• To decide is to come to a definite conclusion for a
follow up action
• Definition- A decision is a course of action which is
consciously chosen for achieving a desired result
• Decision making process pervades all the
managerial actions
• It is an indispensable part of a manager’s job
 What is Decision Making?
• Some Definitions…
• 1.Decision making is the study of identifying and
choosing alternatives based on the values and
preferences of the decision maker.
• Making a decision implies that there are alternative
choices ,so choose the one that has,
• (1) has the highest probability of success or
effectiveness and
• (2) best fits with our goals, desires, lifestyle, values,
and so on.
• 2. Decision making is the process of sufficiently reducing
uncertainty and doubt about alternatives to allow a
reasonable choice to be made from among them.
• A reasonable choice should be made , because, every
decision involves a certain amount of RISK.
A fact about decision making…
Some Decision Making Strategies

• A. importance of the problem

• B. time available for solving it
• C. cost involved with alternative solutions
• D. availability of resources, knowledge
• E. personal psychology values
 Examples of Decision making
1.You have $250,000 to invest for a year. If you put it in stocks,
there is a 50 percent chance that you will net a return of
$40,000. There is, however a 20 percent chance that you'll
lose $2,000 and a 30 percent chance that the market will
really decline and you'll lose $50,000.
• If you put the money in the bank, there is a 95 percent
chance that you'll earn $17,500 in interest. There is,
however, just a small chance--5 percent--that the bank will
go broke, and since the FDIC insurance covers only
$100,000, you would lose $150,000.
• Which investment has the highest expected value?
2.You want to decide whether or not to take the
freeway home from an event you've attended.
• From experience, if you take the freeway,
• you will either speed home,
• or you will get into a traffic jam,

• If you take the side streets, you will either get home
okay, (since it's only half as fast as the freeway)
• or you will hit another traffic jam,
• slightly worse than a jam on the freeway.
 Decision Levels

• 1. Strategic:- Strategic decisions

are the highest level.

• 2. Tactical:-Tactical decisions
support strategic decisions.

• 3. Operational:-These are
every day decisions, used to
support tactical decisions.
 Techniques for Decision Making
• 1. T-Chart:- A T-Chart is PROS CONS
an orderly, graphic
representation of
alternative features or better higher
points involved in a visibility insurance
decision.
safer poorer gas
• For example, what are the structure mileage
pros and cons of deciding
to buy a sport utility can take off more
vehicle? road expensive
maintenance
• 2.Measured Criteria:-With this technique, you list
the criteria you want your decision to meet and
assign points to each criterion based on its relative
importance in the decision.
 Example:- selecting means of transport
for vacation
points train plane car

comfort 30 25 21 18

speed 15 7 15 3

safety 20 13 17 9

food 10 6 2 10

total 75 51 55 40
Thank you  