Planning Techniques and Tools

and Decision Making

Organization and Management Week 7

Planning Techniques and Tools

Planning – critical business responsibility
- the reason for this oversight is often the result of management’s lack of planning
techniques.

QUALITATIVE TECHNIQUES
1. Brainstorming – common technique
- stimulates thinking and it is when the group of planners are sharing
innovative ideas

2. Nominal Group Technique – begins with quiet time

- highly structured method that allows members to give their
own inputs
- restricts personal discussion and minimizes conflict

3. Delphi Technique – does not require to meet personally

- the group leader distributes questionnaires to collect and assimilate
their ideas

QUANTITATIVE TOOLS
1. Decision Tree – it is an excellent tool for weighing different alternatives
- consists of a graph showing potential and alternative decision paths
- the result will look like tree

Sample Decision Tree for Grocery Shopping

a. Payback Method – used in evaluating alternatives in purchasing
equipment, furniture, and fixtures.
b. Critical Path Method – mathematical way of planning to ensure a
timeless and minimum use of resources.

❕ Critical path – set of activities connecting the star node with the
finish node.

❕ Task – labels for all activities. (e.g., A, B, C, 1, 2, 3)

❕ Duration – time period for the completion of the particular activity.

(e.g., days, weeks, months, years)

❕ Predecessor – indicates the pre-requisite activity

❕ Name – the activity that has to be accomplished.

 Critical Path Method

How many paths are there? 3 PATHS

1. A2 + B5 + E10 + F2 + H2 = 21 days
2. A2 + C1 + F2 + H2 = 7 days
3. A2 + D2 + G1 + H2 = 7 days

What is the critical path?

1. A2 + B5 + E10 + F2 + H2 = 21 days ----- critical path (because
2. A2 + C1 + F2 + H2 = 7 days it has the highest
3. A2 + D2 + G1 + H2 = 7 days duration.)

What is the start node?

A2

What is the end node?

H2
 Decision Making
- involves the ability to collect, organize, and synthesize information into a useful form
for identifying and evaluating alternate options.
- takes knowledge and puts it into action

BASIC CHARACTERISTICS OF DECISION MAKING

1. Futurity – if the commitment is quite long, then the decision should be moved up to higher
levels.
2. Revesability – if the decision would be hard to reverse, it should moves up to higher levels.
3. Impact – if the decision would have wide impact, it should be deferred to a higher level.
4. Quality – if many qualitative factors are involved, move the decision to a higher level.
5. Periodicity – rare decisions should be made at higher levels.

❕ Decision Making Process – involves choosing the best alternative after defining the
issue and identifying the desirable outcome.
- generally analyzes a problem in stages.

Steps of Decision Making Process

Step 1: Identification of the Purpose of the Decision
- the problem is thoroughly analyzed.

Step 2: Information Gathering

- one will have to gather as much as information related to the factors and stakeholders
involved in the problem.

Step 3: Principles for Judging the Alternatives

- the baseline criteria for judging the alternatives should be set up.

Step 4: Brainstorm and Analyze the Different Choices

- before stepping on this, it is vital to understand the causes of the problem and
prioritization of causes.
- one can make use of cause-and-effect diagrams (help to identify all possible causes of
the problems) and Pareto chart (helps to prioritize and identify the causes with highest
effect) tool.

Step 5: Evaluation of Alternatives

- experience and effectiveness of the judgement comes into play.

Step 6: Select the Best Alternative

- an informed decision since one has already followed a methodology to derive and
select the best alternative.

Step 7: Execute the Decision

- convert the decision into a plan or a sequence of activities
• Divisional Structure – type of organizational structure that groups each
organizational function into a division

Step 8: Evaluate the Results

- one of the best practices that will improve the decision-making skills.