Organizational Planning Tools DecisionMaking Framework Business Plans Key

Organizational Planning Tools • Decision-Making Framework • Business Plans

Key Terms • Operational Decisions – lower level often administrative decisions with little or no risk • Tactical Decisions- calculated, medium term decision • Strategic Decisions- decisions concerning policy that have a long term impact on a business.

Decision-Making Tools • Fishbone/Cause & Effect diagram/Ishikawa diagram • Scientific • Intuitive • Decision Trees • The Ansoff Matrix

Fishbone • This is used to visually display the many potential causes for a specific problem or effect. • Normally used in group setting as part of brainstorming process

Fishbone Method 1. Identify the problem or effect to be analyzed 2. Identify the main classes of possible causes using categories 3. Identify possible detailed causes under each of these categories 4. Record these possible causes on the diagram to enable them to be discussed and clarified

Scientific • Formal method of decision making process following key steps

Scientific Method 1. 2. 3. 4. 5. 6. 7. Identify Objectives Collect information and ideas Analyzing information and ideas Making a decision Communication Outcome Evaluate the result

Intuitive • Having a hunch… • Acting on it

Decision Trees • A method of tracing the alternative outcomes of any decision. • The likely results can be compared so that the business can find the most profitable alternative

Decision Trees • Advantages • Disadvantages • Careful consideration of all alternatives • Logical approach to decision making • Takes risk into account • Useful when similar scenarios have occurred before – probabilities • Useful in tactical or routine decision • Discourages gut reaction decision making • Hard to get accurate data for probabilities • Less useful for completely new problems • Data bias/manipulate data • Ignores changing business environment • Manager may rely less on qualitative data

Ansoff Matrix • This model identifies growth strategies for businesses based on an analysis of their products and their markets

Homework • Further reading about the decision making tools • Research and take notes on the advantages and disadvantages of the different decision making tools Resources: Text book Internet