Don Hellriegel

Susan E. Jackson
John W. Slocum, Jr.

MANAGING: A COMPETENCY
BASED APPROACH
11th Edition

Chapter 9: Using Planning and Decision Aids

Prepared by
Argie Butler
Texas A&M University
  Learning Goals

1. Explain the essentials of knowledge management

and how it is used to create value for organizations
2. Describe the features and uses of the Delphi method,
simulation, and scenario forecasting aids
3. Discuss the creative process and how to use Osborn’s
creativity model
4. Explain and apply three quality improvement aids:
benchmarking, the Deming cycle, and the Baldrige
quality program
Chapter 9: PowerPoint 9.1
  Recognizing, generating, documenting, distributing, and
transferring among persons useful information, know-how,
and expertise to improve organizational effectiveness
 Main Components of Knowledge Management

Enabling technologies

Tacit knowledge

Explicit
knowledge

Chapter 9: PowerPoint 9.2

 Reinventing the wheel
Knowledge attrition
Information
overload
Productivity and
opportunity loss

Chapter 9: PowerPoint 9.3

 Teams

Customers

Workforce

Chapter 9: PowerPoint 9.4

  Snapshot

“The most valuable assets of a 20th-century

company were its production equipment. The
most valuable asset of a 21st-century institution,
whether business or nonbusiness, will be its
knowledge workers and their productivity. In
the society into which we are moving very fast,
knowledge is the key resource.”

Peter Drucker (1909-2005), author of Management Challenges

for the 21st Century and of many other pioneering books on
management
Chapter 9: PowerPoint 9.5
 Enabling Corporate Culture

 Sense of trust is essential

 Belief that sharing expertise will not be used

against the individual

 In Chapter 18, (Understanding Organizational

Cultures and Cultural Diversity) and elsewhere,
enabling cultures are explored in depth

Chapter 9: PowerPoint 9.6

  Provides a process for an organization to gain deeper
knowledge and understanding of its strategic decisions
by considering the role of finances, customers, internal
processes, and learning/growth

 Provides a broad perspective in planning and decision

making

 Takes account of financial and nonfinancial measures

Chapter 9: PowerPoint 9.7

 Financial Customer
Perspective (outcomes) Perspective (outcomes)
Goals Measures Initiatives Goals Measures Initiatives

Vision
and
Strategies

Internal Learning/Growth
Perspective (activities) Perspective (activities)
Goals Measures Initiatives Goals Measures Initiatives

Chapter 9: PowerPoint 9.8 (Adapted from Figure 9.1)

  Snapshot

“We had an overemphasis on financial indicators, and we

were struggling to report quality and cost-effectiveness data
to the board of directors. So, we adopted a scorecard
approach at the highest level of the organization to balance
the financial indicators with quality measures and other
indicators. We then drove it down to the department level,
to the point where the scorecards become very targeted.”

George G. Pepetti III, Executive Vice President and COO

Silver Cross Hospital, Joliet, Illinois
Chapter 9: PowerPoint 9.9
 Using Forecasting Aids

 Projecting or estimating future events or

conditions in an organization’s environment
 Focuses on external and vital events/beyond
the organization’s direct control
 Extrapolation: projection of some trend or
tendency from the past or present into the
future
 Numerous forecasting aids available

Chapter 9: PowerPoint 9.10

 Listening to the
Hearsay
media

Assuming that
things are going Tunnel vision
to return the way
they used to be

Chapter 9: PowerPoint 9.11

  Based on a consensus of a panel of experts
 Series of questionnaires
 Typically involves three phases
 Phase I: Questionnaire is sent to a group
of experts
 Phase II: Summary of the first phase is
prepared with revised questionnaire
 Phase III: Summary of the second phase
is prepared with revised questionnaire
 Three phases are typically recommended

Chapter 9: PowerPoint 9.12

 Simulation

 Representation of how a real system performs

 Can be altered by users
 Many types of business simulations, often computer/
software based, such as:
 Treasury and Financial Models
Cash management, Income statements, cash
flow projections, Stock and commodity prices
 Marketing Models
Sales budgets, Pricing, Market share
projections, and Advertising and market plans

Chapter 9: PowerPoint 9.13

 Scenarios
 Descriptive narratives that help people recognize and
adapt to plausible changing and uncertain alternative
futures
 Enables management to ask numerous “what if
questions, such as:
 What if the competitor (or set of competitors) commits to a
diversification of its product line (new products for existing
and new customers) through a combination of current and new
technologies?
 What if the competitor launches a series of new products?
 What if the competitor launches a sequence of extensions to its
current product lines (with the specific aim of attracting new
customers to the market)?
Chapter 9: PowerPoint 9.14
  Considers combinations of uncertainties and questions
in each scenario
 Forces managers to evaluate preliminary plans against
future possibilities

“Scenarios are different from forecasts in that

they provide a tool that helps us to explore the
many complex business environments in which
we work, the factors that drive changes, and
development in those environments.”

Jeron Van Der

chief executive of the Shell Group
Chapter 9: PowerPoint 9.15
  Ability to visualize, generate, and implement new ideas or concepts
or new associations between existing ideas or concepts that are novel
and useful
 Stages in the Creative Process

5. Verification

4. Illumination

3. Incubation

2. Concentration

1. Preparation

Chapter 9: PowerPoint 9.16 (Adapted from Figure 9.2)

  Three-phase decision-making process that
involves:

 fact finding,

 idea finding, and

hm
 solution finding m

 Intended to stimulate freewheeling thinking,

novel ideas, curiosity, and cooperation
Chapter 9: PowerPoint 9.17
  Brainstorming: an unrestrained flow of ideas in a
group or team with all critical judgments suspended

1. Criticism is ruled 2. Freewheeling is

out welcomed

Rules of
brainstorming
4. Combination 3. Quantity is
and wanted
improvement
are sought
Chapter 9: PowerPoint 9.18
  Electronic Brainstorming
 Makes use of personal computers that are networked
to input and automatically disseminate ideas in real
time to all team members, each of whom may be
stimulated to generate additional ideas
 Individuals may input ideas via the keyboard as
they think of them
 No identification of individual or team that generates
each idea
 May be better than face-to-face

 Safer for lower-level employees

Chapter 9: PowerPoint 9.19
  A systematic and continuous process of
measuring and comparing an organization’s
goods, services, and practices against industry
leaders anywhere in the world to gain
information that will help the organization
improve performance
 Can be expensive and time consuming

 Helps managers and employees learn from

others
Chapter 9: PowerPoint 9.20
 Benchmarking
 Stages/Process

2. Identify 3. Collect data

1. Define the
the best and analyze to
Domain
performers identify gaps

5. Develop and
7. Repeat 4.Set
6. Evaluate implement
benchmarkings improvement
results plans to
as needed goals
close gaps

Chapter 9: PowerPoint 9.21 (Adapted from Figure 9.3)

  Comprises four stages—plan, do, study, and act—that
should be repeated over time to ensure continuous learning
and improvements in a function, product, or process

Repeat
4. Act 1. Plan PDSA

3. Study 2. Do

Improvements and learning over time

Chapter 9: PowerPoint 9.22 (Adapted from Figure 9.4)
 Baldrige Quality Program

 Provides a systems perspective for managing an

organization and its key processes to achieve the
result of performance excellence

 Malcolm Baldrige National Quality Award

 Promotes excellence in organizational performance

 Recognizes the quality and performance
achievements of U.S. organizations
 Publicizes successful performance strategies

 Systems perspective
Chapter 9: PowerPoint 9.23
 Organizational Profile:
Environment, Relationships, and Challenges

2 5
Strategic Human
Planning Resource
Focus
1 7
Leadership Results
3 6
Customer and Process
Market Focus Management

Measurement, Analysis, and Knowledge Management

Source: Baldrige National Quality Program. Gaithersburg, MD: National
Institute of Standards and Technology, 2006, 5.
Chapter 9: PowerPoint 9.24 (Adapted from Figure 9.5)
  Set of five international standards that
define the requirements for an effective
quality management system
 Standards published by the International
Organization for Standardization (ISO),
headquartered in Geneva, Switzerland
 ISO certification is administered by
accreditation and certification bodies
within the country where the firm
operates

Chapter 9: PowerPoint 9.25