1.6+Organizational+Planning+Tools

= 1.6 Organizational Planning Tools =

These are particularly important in your Internal Assessment.

__KEY WORDS__ : SCIENTIFIC v INTUITION GUT FEELING QUANTITATIVE v QUALITATIVE

While a firm //can// survive making imperfect decisions, they will not be operating at maximum efficiency and of course the more imperfect their decision making is the higher the risk of failure becomes. So good decision-making is important.

There are 2 general ways to go about your decision making, [i] is by instinct, or ' __ intuition __ '- // though of course your intuition can be developed through experience //, the other [ii] is via decision-making tools, this is known as the ' __ scientific __ ' approach. - and typically involves the use of tools within a ** decision-making framework. **

// Note : it is almost impossible to remove all elements of intuition from the decision making process. It is more a matter of not relying on it so heavily //

Both have their dis/advantages : eg the former is quick, the latter is more thoughtful

Table here of dis/adv

table from page 92 here __________________________________

S.W.O.T. ANALYSIS : __S__trengths, __W__eakness, __O__pportunities, __T__hreats

All **Opportunities** and **Threats** can be found in 4* categories : [1] Political .. //ie some Political factors could represent an Opportunity, some could represent a Threat - depending on the factor and depending on the firm. A government Law prohibiting smoking in public is going to be a Threat to Cigarette firms, but an Opportunity for Nicotine Patch firms// [2] Environmental [3] Social [4] Technological
 * some theorists say its more thorough to consider 7 factors which they identify as STEEPLE

Essentially it involves identifying - through research - all the factors within the firms that give it a differentiating Strength, or dangerous Weakness (SW) and all the factors outside the firms control that could provide Opportunities for success or Threats of Failure (OT). Then armed with this information you create a strategy to capitalize on the strengths/opportunities &/or limit the impact of the weakness/threats.

Here is Erica Olsen explaining how to carry out an effective one. She gets more specific than the text book but still does NOT relate it to any particular firm therefore does not end up with any clear example of a strategy. Still well worth a watch.

Key points are similar to above .. [1] SW are internal and researched via Primary Sources [2] OT are external and researched via mainly Secondary Sources [3] a SWOT must lead to a STRATEGY - if not its nothing more than a Sudoku wannabe . media type="youtube" key="GNXYI10Po6A" height="315" width="420"

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 * ANALYSIS OF THIS TOOL - ITS DIS/ADVANTAGES **
 * Advantages || Disadvantages ||
 * * //dfgasgasdg//
 * //zsgsdfg// || * //asdfsadf//

COST-BENEFIT ANALYSIS (CBA) This model examines the financial costs and benefits of a decision. It's used when both costs and benefits can be quantifiable. Break-even analysis and investment appraisal are two examples of CBA. drawbacks: CBA ignores non-financial aspects of decision-making, such as their implications on the workforce and whether the decision is ethical. //* dfsdfh// ||
 * ANALYSIS OF THIS TOOL - ITS DIS/ADVANTAGES **
 * Advantages || Disadvantages ||
 * * //dfgasgasdg//
 * //zsgsdfg// || * //asdfsadf//

FORCE FIELD ANALYSIS

This model was devised by Professor Kurt Lewin as a technique for examining the forces for and against a decision.

Driving forces refer to the advantages of implementing a decision whereas restraining forces are the limitations or disadvantages of the decision.



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 * * //dfgasgasdg//
 * //zsgsdfg// || * //asdfsadf//

THE 5 WHY'S.

Created by Sakichi Toyoda. It is a simple process of asking, five times, why an issue or concern has happened in order to get to the root cause(s) of the problem. Here it is an example.

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 * ANALYSIS OF THIS TOOL - ITS DIS/ADVANTAGES **
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 * * //dfgasgasdg//
 * //zsgsdfg// || * //asdfsadf//

DECISION TREES A decision tree is a quantitative decision-making tool. It is a diagrammatic representation of the different options that are available to a business in the decision-making process, showing their probable outcomes. The tool allows managers to calculate the expected value of each decision in order to identify the best option to follow.

Rules used to construct and interpret decision trees. 1- The diagram is constructed from left to right. 2- Decision nodes or decision points are show as squares.(launch a new product, invest in new machinery, move into overseas market) 3- Chance nodes are shown as circles. (different possible outcomes of a decision, failure or success, improvements or deterioration) 4- Probability (//) different outcomes for each chance node. Must add up to 1 or 100%. The actual value is stated at the end of each branch. The unwanted branch of a decision tree is cut off

Example : .......sdsadga....

clear insight into the problem || * //asdfsadf// //* dfsdfh// ||
 * ANALYSIS OF THIS TOOL - ITS DIS/ADVANTAGES **
 * Advantages || Disadvantages ||
 * * Set out problems in a clear and logical manner
 * By using probabilities - they consider risk
 * As a Visual stimulus they provide

ISHIKAWA'S FISHBONE MODEL Japanese quality guru, Professor Kaoru Ishikawa (1915-1989) came up with the Fishbone model of decision-making, also known as **cause and effect** diagram. The fishbone model is a graphical representation of the most likely causes and effects of an important issue. It's a management tool used to identify the root causes of a problem or issue. It is useful when dealing with a problem that has several elements or root causes. The diagram shows the problem or issue of concern on the right-hand side. The 4 M's (management, manpower, machines and materials) are used to identify different categories of causes.

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 * * //dfgasgasdg//
 * //zsgsdfg// || * //asdfsadf//

=__Other tools__ - which were once on the syllabus but are no longer. Still useful though.=

SIX THINKING HATS Edward De Bono who created this method said, it is important to look at decisions from six different perspectives. That way you have considered all angles & possibilities.

This model use 6 different coloured hats,each representing different ways of thinking:
 * white hat (factual information),
 * red hat ( thinking based on emotions and feelings),
 * black hat (consideration of only the bad points of a decision),
 * yellow hat (all the benefits of a decision),
 * green hat (creative solutions to a problem),
 * blue hat (neutral thinking, i.e someone who chairs the meeting of decision-makers and ensures that each "hat"is represented)

in the early days of using this model he actually insisted that members of his decision making team literally wore the correct hat which he had made for them. It got the individual into the role better, he said. So they gathered - round a table? - and began the discussion of the decision - each member contributing from their given perspective



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 * * //dfgasgasdg//
 * //zsgsdfg// || * //asdfsadf//

PARETO ANALYSIS

Vilfredo Pareto, an Italian economist, found that approximate 80% of a country's wealth was owned by just 20% of the population.This finding became known as the Pareto principle (or the 80/20 principle) - others adapted this idea and said actually the 80/20 principles is true in many aspects of life & business eg 20% of the work can generate 80% of the output. 20% of the staff come up with 80% of the ideas, etc etc

When applied to decision making the idea is
 * find those 20% issues that are causing 80% of the problems
 * find those 20% solution that will create 80% of the benefits

It identifies the decisions that will provide the greatest benefits or the most important problems that needs to be solve - and as such has clear links to Fishbone Model



Example: //frjrtjyrtuy//


 * ANALYSIS OF THIS TOOL - ITS DIS/ADVANTAGES **
 * Advantages || Disadvantages ||
 * * //dfgasgasdg//
 * //zsgsdfg// || * //its kind of vague - just a starting point// //really//
 * //you are still left with the challenge of how do you find those problems / solutions// ||

COST-BENEFIT ANALYSIS (CBA)

This model examines the financial costs and benefits of a decision. It's used when both costs and benefits can be quantifiable. Break-even analysis and investment appraisal are two examples of CBA. drawbacks: CBA ignores non-financial aspects of decision-making, such as their implications on the workforce and whether the decision is ethical. //* dfsdfh// ||
 * ANALYSIS OF THIS TOOL - ITS DIS/ADVANTAGES **
 * Advantages || Disadvantages ||
 * * //dfgasgasdg//
 * //zsgsdfg// || * //asdfsadf//