1.7.

Organizational Planning Tools

(HL only)
 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 least significant/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 cos