Unit 1.7 : Organizational Planning Tools (HL)

Question 1

Fishbone Diagram

Answer 1

1. A graphical representation of the most likely causes and effects of an important decision
2. Qualitative organizational planning tool that is used to identify the root causes of a problem or issue
3. It is also known as the cause and effect diagram
4. Usually the 4Ps are used as the bones - paraphernalia, policies, procedures, and people
5. Managers can identify the various aspects of the problem which must undoubtedly be addressed, such as adequate training or updating office equipment

Question 2

Organizational planning tools

Answer 2

1. Tools that enable businesses to deal with their problems, issues, or concerns in a systematic way
2. All business, regardless of legal status and size, have to plan in order to achieve their organizational objectives

Question 3

Causes that can be found on the fishbone diagram

Answer 3

1. Management (unsuitable management style or miscommunication)
2. Manpower (unskilled labour or lack of training)
3. Machinery (technological failures or outdates machinery)
4. Materials (sub-standard - poor quality materials and delayed deliveries)

Question 4

Important factors to a successful fish bone diagram`

Answer 4

1. The problem os issue must be clearly stated and agreed upon before any discussions start
2. Contributors must be concise and to the point
3. For each bone, brainstorm the possible cause and place these onto the nodes
4. Consider combining nodes that are empty
5. Consider separating overcrowded nodes

Question 5

Pros of the fishbone diagram

Answer 5

1. It is easy to use and understand
2. Allows decision makers to brainstorm ideas in a systematic, holistic, and logical way
3. Facilitates a visual diagnosis of a problem or issue
4. The fishbone diagram has led to computer programmes such as SmartDraw, which aid in decision-making

Question 6

Cons of the fishbone diagram

Answer 6

1. The fishbone diagram model tends to be rather simplistic for some real-world problems
2. It is usually used in conjunction with other decision-making frameworks to establish the root cause of problems
3. It’s often based on opinion rather than evidence; it needs testing to prove results
4. May bring irrelevant potential causes can cause confusion

Question 7

Decision Trees

Answer 7

1. A decision tree is a quantitative decision-making tool that calculated the probable values of different options, helping managers to minimise the risks in decision-making
2. It is a diagrammatic representation of the different options that are available to a business in the decision-making process, showing their probable outcomes
3. The tool allows managers to calculate the expected value of each decision in order to plan the best option to follow

Question 8

Rules to construct and interpret decision trees

Answer 8

1. The diagram is constructed from left to right
2. Decision nodes are SQUARES (when there is a decision to be made)
3. Chance nodes are in CIRCLES (used to show the different possible outcomes of a decision
4. Each chance node should have two or more routes or outcomes. These show the probability of the different outcomes for each chance node
5. The actual values of each outcome are stated at the end of each branch
6. Each branch is cut-off indicated by two parallel lines

Question 9

Pros of decision trees

Answer 9

1. 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
3. They consider the risks involved in decision-making such as possible negative outcomes
4. They enable more scientific and objective decisions to be made as all likely costs of decisions are considered
5. As a visual stimulus, they provide a tangible insight to a problem, rather than having to rely on people’s view or emotions of the problem

Question 10

Cons of decision trees

Answer 10

1. The probabilities given in a decision tree are only estimates and are subject to forecasting errors
2. 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
3. The technique does not necessarily reduce the amount of risk involved in decision-making
4. Delays in the planning process can void the data by the time a decision is actually made, yet jet lags are often inevitable in the real business world
5. The task of assigning probabilities is rather subjective so results can be deliberately biased to justify the preference of the management

Question 11

Force field analysis

Answer 11

1. Force field analysis (FFA) deals with the forces for and against change
2. Businesses need to be constantly adapting and changing, rather than being fixed in outdated practices and unable to look forward - force field analysis helps to decide whether change should be made
3. Driving forces push for change whilst restraining forces act against change
4. The relative strength of these forces determine whether the change should take place
5. FFA can help to improve a project’s chances of success by investigating how driving forces can be strengthened and how restraining forces can be minimised or eliminated
6. It is essentially a specialised technique of weighing up advantages and disadvantages to help decide whether a proposed change is worth implementing

Question 12

Stages involved in the force field analysis

Answer 12

1. List the driving forces for change and the restraining forces against change
2. Allocate a weight to each of these forces - from 1 (weak) to 5 (strong)
3. Draw a FFA diagram, including the weights of each of the driving and restraining forces
4. Total the scores for the driving forces and restraining forces

Question 13

Pros of force field analysis

Answer 13

1. Provides a visual summary of all the various factors supporting and opposing a particular idea, with all the data that has been collected regarding a potential decision consolidated into a single graph
2. Helps to improve a project’s chances of success by investigating how driving forces can be strengthened and how restraining forces can be minimised or eliminated
3. Can look at qualitative factors

Question 14

Cons of force field analysis

Answer 14

1. Weights attached to the driving and restraining forces might be done subjectively rather than based on facts or evidence
2. Not all relevant forces might be considered, perhaps deliberately to overemphasise the need for change

Question 15

Gantt charts

Answer 15

1. A gantt chart is a visual representation of all the tasks in a particular project plotted against the timescale
2. It is a management tool used to plan and schedule business projects, allowing project managers to monitor progress
3. 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
4. Ultimate purpose of making a Gantt chart is to identify the minimum amount of time needed to complete a project. This requires the various tasks of a project to be planned in a logical order so that the different processes are completed with minimal delay and maximum efficiency

Question 16

Rules to construct and interpret Gantt charts

Answer 16

1. It is presented as a bar chart showing all the schedules tasks over a given time scale
2. The time scale is shown on the horizontal axis
3. Each activity is shown by a separate 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
4. Each horizontal bar show the start and finish date
5. Both critical and non-critical activities (those with some slack time) are shown
6. Predecessor-successor relationships are shown such as activities that must be preceded by others

Question 17

Steps in making a gantt chart

Answer 17

1. Identify all the activities required for the completion of the project
2. Break down the project into separate and clearly identifiable tasks
3. Determine how long each of the tasks will take
4. Identify all dependencies (activities that cannot start until the completion of other tasks)
5. Determine which tasks can take place concurrently to minimise production time
6. Place all tasks in the right sequence on the gantt chart

Question 18

Pros of gantt charts

Answer 18

1. It improves efficiency and helps to manage resources (reduces time spent doing nothing)
2. Allows for better tracking of the project status
3. Illustrates overlaps and dependencies
4. Visual so easy to see
5. Can allow you to balance multiple projects
6. Helps to set realistic deadlines and expectations
7. Helps to keep everyone aligned, including remote or telecommuting workers

Question 19

Cons of gantt charts

Answer 19

1. Don’t designate priorities (assume everything is of the same priority)
2. They can become complex and confusing for large projects with many things happening simultaneously
3. Task bars do not show the amount of work that each task requires
4. Setting it up can be time-consuming

Question 20

Three levels of business decision-making

Answer 20

1. Operational decisions
2. Tactical decisions
3. Strategic decisions

Question 21

Operational decisions

Answer 21

1. Routine and day-to-day decision
2. e.g. supervisors deciding when factory floor workers should go for their break or sales managers dealing with customer enquiries

Question 22

Tactical decisions

Answer 22

1. Regular and short-term decisions
2. Usually made by middle management
3. e.g. decisions about pricing strategies or recruitment

Question 23

Strategic decisions

Answer 23

1. High-level and long-term decisions that set the overall direction for a business
2. Such decisions are dealt with by senior managers as they carry much more risk
3. e.g. which products to develop, salaries, which markets to enter, expansion etc

Question 24

Types of organizational planning tools

Answer 24

1. Fishbone diagram
2. Gantt chart
3. Forcefield analysis
4. Decision trees