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Chapter 5: Planning and Decision Making
Pedagogy Map
This chapter begins with the learning outcome summaries and terms covered in the chapter, followed by a
set of lesson plans for you to use to deliver the content in Chapter 5.
• Lesson Plan for Lecture (for large sections)
• Lesson Plan for Group Work (for smaller classes)
• Assignments with Teaching Tips and Solutions
What Would You Do Case Assignment – DuPont
Self-Assessment – Self Management
Management Decision – What Should We Call It?
Highlighted Assignments
Key Points
What Would You Do?
After years of falling behind competitors, what kind of plans
and decisions does DuPont need to make to restore its
prestige, performance, and competiveness?
Students are asked to consider whether a company should
Management Team Decision
Students must decide whether to pay a government fine and
admit culpability for manufacturing defects or fight the fine
and risk a public backlash.
Practice Being a Manager
This exercise highlights some well-tested tools for
strengthening your planning and decision-making skills.
himself in a high-stakes game with a clever bank robber who
is holding 50 people hostage in the Manhattan Trust Bank
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outside landscape architects.
Supplemental Resources
Where to Find Them
Course Pre-Assessment
IRCD
Course Post-Assessment
IRCD
Learning Outcomes
1 Discuss the benefits and pitfalls of planning.
Planning is choosing a goal and developing a method for achieving it. Planning is one of the best ways to
improve organizational and individual performance. It encourages people to work harder (intensified
2 Describe how to make a plan that works.
There are five steps to making a plan that works: (1) Set S.M.A.R.T. goals—goals that are Specific,
Measurable, Attainable, Realistic, and Timely. (2) Develop commitment to the goals. Managers can
3 Discuss how companies can use plans at all management levels, from top to bottom.
Proper planning requires that the goals at the bottom and middle of the organization support the objectives
at the top of the organization. Top management develops strategic plans, which start with the creation of
4 Explain the steps and limits to rational decision making.
Rational decision-making is a six-step process in which managers define problems, evaluate alternatives,
and compute optimal solutions. The first step is identifying and defining the problem. Problems are gaps
PowerPoint slides with lecture notes
IRCD and online
Who Wants to Be a Manager game
IRCD and online
Test Bank
IRCD and online
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5 Explain how group decisions and group decision-making techniques can improve decision
making.
When groups view problems from multiple perspectives, use more information, have a diversity of
knowledge and experience, and become committed to solutions they help choose, they can produce better
solutions than individual decision makers. However, group decisions can suffer from these disadvantages:
groupthink, slowness, discussions dominated by just a few individuals, and unfelt responsibility for
Terms
absolute comparisons
action plan
A-type conflict (affective conflict)
brainstorming
budgeting
operational plans
options-based planning
planning
policy
problem
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Lesson Plan for Lecture
Pre-Class Prep for You:
Pre-Class Prep for Your Students:
• Review chapter and determine what points to
cover.
• Bring PPT slides.
• Bring book.
Warm Up
Begin chapter 5 by asking your students the following questions: “How many of you
think you’re good at planning?” and “What kind of things do you plan?”
Content
Delivery
Lecture slides: Make note of where you stop so you can pick up at the next class
meeting. Slides have teaching notes on them to help you as you lecture.
Topics
PowerPoint Slides
Activities
Planning
1: Planning & Decision
Making
2 How to Make a Plan
that Works
2.1 Setting Goals
2.2 Developing
7: How to Make a Plan
That Works
8: Setting Goals
9: Developing
Consider using an example
that students can follow for
this section (like the steps
to planning a campus
3 Planning from Top to
Bottom
3.1 Starting at the Top
3.2 Bending in the
Middle
13: Planning from Top to
Bottom
14: Starting at the Top
15: Planning Time Lines
16: Bending in the
What is Rational
Decision Making?
19: What Is Rational
Decision Making?
20: Rational Decision
Making
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4 Steps and Limits to
Rational Decision
Making
4.1 Define the
Problem
Decision Making
22: Define the Problem
23: Identify Decision
Criteria
24: Weight the Criteria
Ask students, “How many
of you think you’re good
decision makers?” and
What process do you go
through to make a decision?
5 Using Groups to
Improve Decision
Making
5.1 Advantages and
Pitfalls of Group
Decision Making
5.6 Electronic
Brainstorming
31: Using Groups to
Improve Decision
Making
32: Advantages to Group
Decision Making
33: Disadvantages to
Technique
39: Delphi Technique
40: Stepladder Technique
41: Electronic
Brainstorming
Remind students of a group
decision they encounter
regularly: what to do on
Friday/Saturday night.
How do students decide
Adjust lecture to include the activities in the right column. *Some activities should be
done before introducing the concept, some after.
Conclusion
Assignments:
• Remind students about any upcoming events.
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Lesson Plan for Group Work
Pre-Class Prep for You:
Pre-Class Prep for Your Students:
• Review material to cover and modify the lesson
plan to meet your needs.
• Set up the classroom so that small groups of 4-5
students can sit together.
• Bring book.
Warm Up
Begin Chapter 5 by asking your students the following set of questions:
• “How many of you think you’re good at planning?”
Content
Delivery
Lecture on The Benefits and Pitfalls of Planning and How to Make a Plan That Works
(Sections 1-2).
Break for group activity:
“S.M.A.R.T. Objectives”
Divide the class into small groups (3-4 students). Give each group a list of objectives
Segue into a lecture on Planning from Top to Bottom (Section 3).
“To Pay or Not Pay”
Divide the class into small groups of 3 to 4 students and allow 5 to 7 minutes for them
to review the Management Decision. Have students work through the questions, then
Ask students, “How do you go about making a decision? Does anyone have a system for
making tough (or even easy) decisions?”
Segue into a lecture on Steps and Limits to Rational Decision Making (Section 4).
Break for the following activity:
independently out of class to evaluate the options and compute the final decision.
“Campus Decisions”
Divide the class into groups of 3-4 students to work through deciding where to live as
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Segue into next section by asking students the following question:
• “Do you think it is easier to make decisions as an individual or as part of a
group?”
Lecture on Group Decision Making (Section 5).
Once you go through the various group decision-making techniques, let students know
that they will be using them throughout the semester in class to work through group
activities. Begin with the following quick activity:
“Quizzes, Tests, and Exams”
Divide students into small groups of 5 to 7 students and give them the following
problem: how to evaluate students during the semester. They will need to propose
Conclusion
Assignments:
was done.
• If you have finished covering Chapter 5, assign students to review Chapter 5 and
read the next chapter on your syllabus.
• Remind students about any upcoming events.
Assignment Teaching Tips and Solutions
Case Assignment – What Would You Do?
What Really Happened? Solution
DUPONT
In the case, you learned that the DuPont Corporation, founded in 1802, was a manufacturer of blasting
powder in its first 100 years. In its second 100 years, it became one of the world’s leading chemical
First, given sustained weak performance over the last quarter century, do you need to step back and
consider DuPont’s purpose, that is, the reason that you’re in business. After transitioning from blasting
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powder to chemicals, DuPont’s slogan became, “Better things for better living … through chemistry.” Is
it time, again, to reconsider what DuPont is all about?
compared to a set of 19 peer companies. After such an extended period of poor performance, is it enough
just to examine how DuPont does business, or should the company reexamine its purpose, that is, its
reason for existing?
DuPont CEO, Ellen Kullman, tells a story in which she shares that she is reading the biography of Alfred
du Pont, one of the sons of founder E.I. du Pont, who later bought and ran the company with his cousins,
Pierre and Coleman du Pont. Kullman says,
The company they bought in 1902 was still very much the explosives company that it had been
throughout the 19th century. But they didn’t look back; they looked forward. In many ways they
Kullman’s predecessor, CEO Charles O. Holliday Jr., began the process of changing DuPont’s
purpose by selling Conoco Oil, pharmaceutical divisions, and nylon and textile divisions, the latter of
which were once thought to be the core of the company. In their absence, Holliday stated that DuPont
would “be the world’s most dynamic science company.” Kullman built on Holliday’s changes, declaring
that DuPont was in the “innovation and science” business.
Was it time, again, to reconsider what DuPont was all about? Clearly, according to CEO Kullman it
was. For the second time in its 210 year history, DuPont changed why it exists.
Or, instead of an intense focus on DuPont’s purpose, would it make more sense to make lots of plans and
lots of bets so that “a thousand flowers can bloom?” In other words, would it be better to keep options
open by making small, simultaneous investments in many alternative plans? Then, when one or a few of
these plans emerge as likely winners, you invest even more in these plans while discontinuing or reducing
investment in the others.
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Because action plans are sometimes poorly conceived and goals sometimes turn out not to be
achievable, the last step in developing an effective plan is to maintain flexibility. One method of
maintaining flexibility while planning is to adopt an options-based approach. The goal of options-based
The set of businesses in each growth platform was then charged with achieving specific growth goals.
DuPont supported the five growth platforms with something it called, “Knowledge Intensive University.”
According to Planning Director Robert Cooper, DuPont launched 2 programs, “for ‘knowledge intensive’
growth to drive value creation through a basic knowledge of our customers, markets, and intellectual
property.” Cooper explains, “One is for the top management of product divisions and global businesses.
This program helps our most senior people develop an understanding of how to establish the best places
to grow; the importance of creating a sense of urgency; and how to allocate resources among the business
teams that must execute the agenda. The second program is for the business teams themselves. That
Finally, planning is a double-edged sword. If done right, it brings about tremendous increases in
individual and organizational performance. But if done wrong, it can have just the opposite effect and
harm individual and organizational performance. With that in mind, what kind of goals should you set
for the company? Should you focus on finances, product development, or people? And, should you have
an overriding goal, or should you have separate goals for different parts of the company?
Planning is one of the best ways to improve organizational and individual performance. It encourages
people to work harder (intensified effort), to work hard for extended periods (persistence), to engage in
behaviors directly related to goal accomplishment (directed behavior), and to think of better ways to do
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Kullman’s top goal is for DuPont to increase its earnings per share by 20% per year. In most
companies, this would be a super aggressive goal, but achieving this goal would return the company to
price-earnings ratios that it was earning five years ago. So while this is an aggressive annual goal, it’s
also modest in the sense that it is returning DuPont to a previously achieved level of earnings. How
doable is Kullman’s goal? In the last half century, four of the last nine DuPont CEOs were able to
achieve this level of earnings growth over a three-year period. None, however, were able to make this
growth last four consecutive years. So, what can Kullman do to increase the odds of achieving this goal?
projects can be expected to make a tidy profit to continue to receive funding.” Thomas M. Connelly Jr.,
DuPont’s chief innovation officer, makes the key point that, “We can’t leave our science in the library.”
The focus on research with market potential appears to be working. In 2009, DuPont filed for 2,086 U.S.
Patents, the highest in company history, and 8% higher than the year before. Furthermore, DuPont
brought 1,400 new products to market in 2009, more than in any previous year.
Finally, should DuPont have an overriding goal, or should it have separate goals for different parts of
the company? While CEO Kullman’s top goal is to increase earnings per share by 20% per year, those
Sources: R. Cooper, “Knowledge-Intensive Growth at DuPont,” Center for Leadership & Change Management,
Wharton School, University of Pennsylvania,
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Self-Assessment
SELF-MANAGEMENT
This assessment is meant to identify how developed students’ self-management skills are. To become a
better manager, it is necessary to develop strong self-management skills. This assessment will give you a
foundation for your later self-management goals (i.e., where you are now so you can see what you need to
do to get where you want to be).
In-Class Use
Have students open their books to page 192 of the text and give them 5 to 7 minutes to complete the
Scoring
In general, higher scores mean a more developed sense of self-management and lower scores indicate a
reliance on external sources for planning. If your score fell between:
• 0-70 – You rely almost entirely on an external entity (professor, adviser, boss, or parent) to make
a plan for you and identify your goals. To be a successful manager, however, you will need to
greatly improve in this area.
Give students the following techniques to improve their self-management skills:
If you are not used to practicing self-management, the best way to start is with something simple. In
other words, start with something you will be able to accomplish. For example, imagine your dorm room
or apartment is a chronic mess (you may not have to use much imagination). Set an overall goal to keep it
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Management Decision
WHAT SHOULD WE CALL IT?
Purpose
This case gives students an opportunity to partake in the managerial function of decision making.
Students must decide how to present an automobile warranty so that the company can maximize sales, but
must also consider how the company’s commitment to honesty will be perceived by consumers.
Setting It Up
You can introduce this case by presenting an object before students. It can be something simple like a
Questions
1. What recommendation would you make as to how to label the warranty in marketing campaigns?
Why?
Students’ responses will vary. In any case, their responses should reflect awareness of how their
2. In making the decision, how could you benefit from the various group decision making techniques
described in the chapter? Which might be most effective for the decision you face?
There are a number of group decision-making methods discussed in the chapter and students may
choose one or more of them in solving the problem presented in this case. Their responses should,
Whichever of the techniques that the students decide to apply to this case, they should also show
cognizance of the advantages of group decision making, and how they can be applied to this case.
Groups can do a much better job than individuals in decision making because groups are able to view