Decision
a choice among possible alternative courses of action
Performance Threat
Something is wrong or has the potential to go wrong
Performance Opportunity
Situation that offers the chance for a better future if the right steps are taken
Problem Avoiders
inactive in information gathering and solving problems
Problem Solvers
Reactive in gathering information and solving problems
Problem Seekers
Proactive in anticipating problems and opportunities and taking appropriate action to gain an advantage
Systematic Thinking
approaches problems in a rational, step by step and analytical fashion
Intuitive Thinking
approaches problems in a flexible and spontaneous fashion
Certain Environment
offers complete information on possible action alternatives and their consequences (low risk of failure) (programmed decision)
Risk Environment
Lacks complete information but offers probabilities of the likely outcomes for possible action alternatives (medium risk of failure)
Uncertain Environment
lacks so much information that it is difficult to assign probabilities to the likely outcomes of alternative (high risk of failure) (non programmed)
Classical Model
structured problem
clearly defined
certain environment
complete info
all alt and consequences known
(Optimizing Decision)
Optimizing Decision
choose absolute best among alternatives
Rationality
acts in perfect world
Bounded rationality
acts with cognitive limitations
Behavioral Model
unstructured problem
not clearly defined
uncertain environment
incomplete information
not all alt and consequences known
Satisficing Model
choose first "satisfactory" alt
Utility
does the decision satisfy all constituents or stake holders
Rights
does the decision respect the rights and duties of everyone
justice
is the decision of consistent with the canons of justice
caring
the decision consistent with my responsibilities to care
Availability Bias
bases a decision on recent information or events
Representativeness Bias
bases decision on similarity to other situations
Anchoring and Adjustment
bases a decision on incremental adjustment from a prior decision point
Framing Error
trying to solve a problem in the context in positive or negative context
Confirmation Error
focusing on information that confirms a decision already made
Escalating Commitment
continuing a course of action even though it is not working
Planning
the process of setting objectives and determining how to accomplish them
Objectives and Goals
identify the specific results or desired outcomes that one intends to achieve
Plan
a Statement of action steps to be taken in order to accomplish the objectives
Planning
to set the direction
-decide where you want to go
-decide how to best go about it
Organizing
to create structures
Controlling
to ensure results
-measure performance
-take corrective action
Leading
to inspire effort
Strategic Plans
set abroad, comprehensive, and longer-term action directions for the entire organization
-set forth goals and objectives needed to accomplish the organizations vision
Vision
clarifies purpose of the organization and what it hopes to be in the future
Tactical Plans
developed and used to implement all or part of the strategic plan
-address the issue of how organizational resources can bed to put the strategies into action
-often take the from of fictional plans
Functional Plans
indicate how different functions within the organization help accomplish the overall strategy
-production plans, financial plans,facilities plans
Operational Plans
identify short term activities to support and implement strategic and tactical plans
Standing Plans
Policies: communicate guidelines for decisions
Procedures: describe actions to be taken in specific situations
Single-Use Plans
Budgets: single use plans the commit resources to projects or activities
-financial, operating, non monetary
-fixed vs flexible
-zero based budgets
Feedforward controls
ensure the right directions are set and the right resource inputs are available (solve problems before they occur)
Concurrent Controls
ensure the rights things are being done as part of work flow operations (solve problems while they are occurring)
Feedback Controls
ensure that final results are up to desired standards (solve problems after they occur)
External Controls
-bureaucratic control
-market control
-clan control
Project Management
overall planning, supervision, and control of projects
Gantt Chart
graphic display of scheduled tasks required to complete a project
-allows a manager to know what activities should be performed at a given time and to monitor daily progress of a project
CPM
the critical path method and program evaluation and review technique
PERT
approach to project method developed as a means of handling uncertainty in completion times
Vertical axis of Gantt Chart
activities
Horizontal Axis Gantt Chart
time
Project Networks
graphic representation of activities and their sequences
Nodes
circles or boxes that represent activities
Arcs
arrows that define the precedence relationships between activities
Critical Path Method
approach to scheduling and controlling project activities
Inventory Control
economic order quantity
just in time scheduling
Breakeven Analysis
performs what if calculations at different revenue and cost conditions
-point where we begin making profit
revenue=costs
Economic Order Quantity
helps minimize carrying costs
-places new orders when inventory falls to predetermined levels
Just In Time Scheduling
almost eliminates carrying costs
-improves workflow by scheduling materials to arrive at a work station or facility just in time for use
Financial Statements
provide basic information for financial control
Balance Sheet
shows firms financial position at a specific point in time with respect assets, liabilities, and owners equity
Income statement
Highlights firms financial performance
-itemized financial statements of the income and expenses of a company's operations
(profit and loss statement)
Statement of Cash Flows
concerned with the flow of cash into and out of a firm
-summary of the cash receipts and cash payments for a specific period of time
Liquidity
the ability to generate cash to pay bills
Leverage
the ability to earn more in returns than the cost of debt
Profitability
the ability to earn revenues greater than costs
Asset Management (activity ratios)
the ability to use resources efficiently and operate at minimum cost
Liquidity Ratios
indicate a companies ability to pay short term debts
Leverage Ratios
show the relative amount of funds in the business supplied by creditors and shareholders
Profitability Ratiosq
indicate managements ability to generate a financial return on sales or investments
-example Return on Investment
Asset Management Ratios
measure internal performance with respect to key activities defined by management
Balanced Scorecard
comprehensive view of organizational performance using four metrics
-financial performance
-customer satisfaction
-internal process improvement
-innovation and learning
Strategic Management
the process of formulating and implementing strategies to accomplis long term goals and sustain competitive advantages
Strategy
a comprehensive plan guiding resource allocation to achieve long-term organization goals
Strategic Analysis
process of analyzing the organization, the environment, its competitive position and current strategies
Strategic Formulation
creating strategy, involves assessing existing strategies, organization and environment to develop new strategies and strategic plans capable of delivering future competitive advantage
Strategy Implementation
allocating resources and putting strategies into action
Porters Five Forces
-industry competition
-new entrants
-substitute products or services
-bargaining power of suppliers
-bargaining power of customers
Industry Competition
intensity of rivalry among firms and their competitive behavior
New Entrants
threat of new competitors entering the market
Substitute products or services
threat of substitute products or services
Bargaining power of suppliers
ability of resource suppliers to influence the cost of products or services
Bargaining power of customers
ability of customers to influence the price they will pay for products or services
Technological Competency
is the ability to understand new technologies and to use them to their best advantage
Analytical Competency
the ability to evaluate and analyze information to make actual decisions and solve real problems
Information Competency
the ability to gather and use information to solve problems