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1 7 Organizational Planning Tools
1 7 Organizational Planning Tools
Decision-making
Types of decisions
Operational (daily) – policies, practice, rules, set procedures, etc.
Tactical (regular/short term issues) – handled by management regarding
their respective departments
Strategies (long term) – high level decisions made by top management on
new directions, growth, and issues affecting the entire organization or with long
term consequences
Types of decision-making
Intuitive decision-making
Making decisions based on instinct or gut-feeling
Less costly and time consuming
May sometimes be considered as irresponsible decision-making
Scientific decision-making
Basing decisions on a formal framework and data analysis
Greater chance of success
Takes longer and can be expensive
Decision-Making Framework
A guide or model that involves following certain steps to make the
best and most appropriate business decision in a given situation
In a simple decision-making model, the following steps may be
done:
Identify the business problem, concern or issue
Gather sufficient data and information
Analyze data and information to produce a list of possible
options
Assess the costs and benefits of each option
Select the most favorable and realistically achievable
option
Communicate this decision to the staff
Review and evaluate the outcome, i.e. did it help the
organization’s objectives and what lessons were learned?
Fishbone/Ishikawa Diagram
Cause and effect diagram developed by Prof. Kaoru Ishikawa
Can usually be broken down into 6Ms (but not limited to)
Machine
Mother Nature
Manpower
Money
Market
Materials
And usually into the 4Ps (but not limited to)
People
Policies
Paraphernalia
Procedure
Stages of Fishboning
Agree on the problem and write this on the right as the EFFECT.
Brainstorm the main categories or generic ones (6Ms or 4Ps) = main bones
Brainstorm all of the detailed reasons why problems might occur = small
bones
Analyze findings and investigate the main causes of the problem
Recommendations for the improvement of the business based on the
constructed diagram.
Decision tree
Quantitative decision making tool representing available options to a business and
showing probable outcomes
By comparing likely financial results from each option, the manager can minimize
risk and maximize returns
Constructing a Decision Tree
Decisions nodes (squares) and chance nodes (circles), representing the
outcomes of a decision
Probabilities are shown with each possible outcome
Economic returns are expected financial gains or losses of a particular
outcome
Expected Value
Likely financial result of an outcome.
(Economic return – costs) * probability
Net EV is calculated from right to left
Limitations
Limited by the accuracy of the data used – estimate or guesstimate
date and outdated probabilities
Merely aid the decision making process, but they cannot replace
the consideration of risk or the impact of qualitative factors
Force field analysis
Decision-making tool that looks at helping or hindering forces towards a plan
Analyzes factors that support and oppose the plan to decide whether or not to
push through with it
Constructing a force field analysis
Draw a large rectangle in the middle, write the proposed plan in it
List down the supporting factors on the left side
List down the opposing factors on the right side
Rate each factor based on influence (usually on 1-to-5 scale, with 1
being leastsignificant/influential, 5 being most significant/influential)
Using force field analysis
Decide whether or not to push through with proposed plan given
both supporting and opposing factors and their respective importance
Plan changes that may be implemented to strengthen supporting
factors, weaken opposing factors, and make the proposed plan more
successful/effective
Limitations
Factors and their ratings are subjective and may be biased
May cause a division among decision-making parties on whether
or not to push through with plan
Gantt chart
A type of bar chart that illustrates a project schedule
Outlines the start and finish dates of important elements of a project
Also shows relationship of these elements (i.e. Task B starts only when Task A
finishes)
Constructing a Gantt chart
Rows are the elements/tasks
Columns are the dates (left to right)
Fill in boxes corresponding to duration of each task
Draw vertical line to represent current date
Limitations
Relies on completed and accurate project breakdown structure (breakdown
of elements and tasks of project)
Depicts time of tasks, but not scope or cost