1.7 Organisational planning tools [HL] Flashcards
(19 cards)
Decision tree
Decision trees are a quantitative organizational planning tool
that calculates the probable values of different options, helping
managers to minimise the risks in decision-making.
Force field analysis
Force field analysis deals with the forces for and against change.
Driving forces are the benefits of change (such as reduced costs
or improved productivity) whilst restraining forces are the
causes of resistance to change.
Fishbone diagram (or cause and effect model)
Fishbone diagram (or cause and effect model) is an
organizational planning tool based on identifying and dealing
with the root causes of a problem or issue facing a business.
Gantt charts
Gantt charts are a visual representation of all the tasks in a
particular project plotted against the timescale. As a planning
and scheduling tool, it allows project managers to monitor
progress.
The ultimate purpose of producing a Gantt chart is to identify the minimum (shortest) amount of time needed to complete a project.
Organizational planning tools
Organizational planning tools are the various methods that
businesses use to aid their decision-making, e.g. decision trees,
fishbone diagrams, Gantt charts and force field analysis.
Fishbone diagram AO3
The following causes can be found from using the fishbone
diagram:
• Management, e.g. unsuitable management style and
miscommunication with the workforce
• Manpower, e.g. unskilled workers, a lack of training and
insufficient personnel
• Machinery, e.g. technological failures, faulty equipment
and the use of outdated machinery
• Materials, e.g. sub-standard (poor quality) materials and
delayed deliveries.
Fishbone diagram AO3 4 & 2
strenghts and weaknessess
- A key strength of the Ishikawa model is that it is easy to use
and understand. - It allows decision makers to brainstorm ideas
in a systematic, - holistic and logical way. It facilitates a visual
diagnosis of a problem or issue. - Today, computer programmes
based on Ishikawas ideas, such as SmartDraw, can be used to
aid decision-making.
However
1. ,The fishbone diagram model tends to be rather
simplistic for some real-world problems. 2. In practice, the
fishbone diagram is often used in conjunction with other
decision-making frameworks to establish the root cause(s) of
a problem.
Fishbone diagram AO4
8 steps
- The problem or issue must be clearly stated and agreed
upon before further discussions begin. - Contributors must be concise and to the point. Causes
rather than symptoms must be stated. - For each ‘bone’, brainstorm the possible causes and place
these onto the node. - Consider combining nodes that are rather empty or
scrapping them altogether. - Consider separating overcrowded nodes.
- Consider which root causes warrant further investig
ation by circlingthese on the diagram. - Discuss how each circled item affects the problem or
issue being investigated. - Once the root causes have been established, the fishbone
is complete and decision makers move on to devising
appropriate strategies to deal with the sources of the
problem.
Force field analysis AO3
Driving forces push for change whilst
restraining forces act against change.
The relative strength of
these forces determines whether the change should take place.
Force field analysis AO4
4 stages
- List the driving forces for change and the restraining forces against change.
- Allocate a weight to each of these forces, from 1 (weak)
to 5 (strong). - Draw a FFA diagram (see Figure 1.7.e), including the
weights of each of the driving and restraining forces. - Total the scores for the driving forces and restraining
forces.
Force field analysis AO3
3 strengths 2 weaknesses
- can help to work out how to improve
the projects chances of success. This is done by investigating
how driving forces can be strengthened and how restraining
forces can be minimised or eliminated. - Whilst, the problems of change management are not solvedby
FFA it allows managers to examinethe driving and restraining
forces more clearly. - force field analysis is a useful decisionmaking
technique for looking at the forces acting for and
against change. If change is desired, managers can analyse
and influence the forces to make the change happen. - Weights attached to the driving and restraining forces
might be done subjectively rather than based on facts or
evidence. - Not all relevant forces might be considered, perhaps
deliberately to overemphasise the need for change.
Decision tree AO3
advantages 5p
- They allow managers to set out problems in a clear and logical
manner.
2.All potential options can be seen at the same time, thereby
speeding up decision-making. - They consider the risks involved in decision-making, such as
possible negative outcomes. - They enable more scientific and objective decisions to be made
as all likely costs of decisions are considered. - As a visual stimulus, they provide a tangible insight to a problem,
rather than having to rely on people’s views or emotions of the
problem.
Decision tree AO3
disadvantages 5p
- The probabilities given in a decision tree are only estimates and
subject to forecasting errors. - They are based on quantitative data only, so qualitative issues
(such as the effects on staff morale or the compatibility of a
decision with the firm’s aims) are ignored. - The technique does not necessarily reduce the amount of risk
involved in decision-making. - Delays in the planning process can void the data by the time a
decision is actually made, yet time lags are often inevitable in
the real business world. - The task of assigning probabilities is rather subjective so results
can be deliberately biased to justify the preference of the
Decision nodes
Decision tree AO4
Decision nodes are shown as squares. These are used
when there is a decision to be made, e.g. whether to
launch a new product, to invest in new machinery or to
move into overseas markets.
Chance nodes
Decision tree AO4
Chance nodes are shown as circles. These are used to
show the different possible outcomes of a decision. Typical
outcomes include criteria such as ‘failure or success’ and
‘improvements or deteriorations’.
Decision tree AO4 (6p)
For each chance node, there will be two or more routes
(outcomes). These show the probability of the different
outcomes for each chance node.
The probabilities for each
chance node must add up to 1.
The actual values of each outcome are stated at the end of
each branch.
The costs of each option must be deducted
when calculating the net figure for each outcome.
Each unwanted branch of the decision tree is cut-off
(rejected), indicated by two parallel lines. This will leave
just one best option to follow.
Gantt chart AO3
Project management allows managers to complete a project
successfully in the quickest time available by overseeing a large
number of activities and ensuring that each task is completed
on schedule. If a deadline is missed, there is likely to be delays
for the rest of the project. Late completion of a project or the late
delivery of output to a client can be very costly to the business.
Gantt charts show this information visually, giving project
managers an instant overview of the project, the activities
involved, their duration and when each individual activity
needs to be finished.
The ultimate purpose of producing a Gantt chart is to identify the minimum (shortest) amount of time needed to complete a project.
Gantt chart AO4
6 rules
• It is presented as a bar chart showing all the scheduled
tasks over a given time scale.
• The time scale is shown on the horizontal axis.
• Each activity isshownbyaseparate horizontal rectangular
bar,with the length depicting the duration of the activity.
Each bar shows the start date, duration and end date of
an activity.
• Each horizontal bar show the start and finish dates
• Both critical and non-critical activities (those with some
slack time) are shown.
• Predecessor-successor relationships are shown, i.e.
activities that must be preceded by others and activities
that must follow others.
Today, project managers tend
Gantt chart AO4
6 steps
• Identifying all the activities required for the completion
of the project.
• Breaking down the project into separate and clearly
identifiable tasks.
• Determining how long each of these tasks will take.
• Identifying all dependencies, i.e. activities that cannot
start until the completion of other tasks.
• Determining which tasks can take place concurrently (to
minimise production time).
• Placing all tasks in the right sequence on the Gantt chart.
