8.Operational Planning and Decision Making

8/13/2019 8.Operational Planning and Decision Making

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DIPLOMA IN BUSINESS LEADERSHIP

MODULE 8

REVISED

NOVEMBER 2003

OPERATIONAL PLANNING

AND

DECISION MAKING

SOLVING THE PUZZLE

THROUGH EFFECTIVE

PLANNING AND SOUND


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AND

DECISION MAKING

MODULE 8

OBJECTIVES

On completing this module delegates shall:

1. Describe the basic steps in planning process.

2. Describe how planning and controlling are linked.

3. Develop specific objectives and action plans.

4. Describe and utilie decision making and operation planningtechni!ues

". Describe and appl# the rational problem solving.

$. %ppl# the si& step approach to decision making

'. Describe the characteristics of a control s#stem.

(. %ppl# different control s#stems at work.


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AND

DECISION MAKING

ACKNOWLEDGEMENTS AND REFERENCES

)iggs * +eath , -ritical ath /cheduling 01(2eil - -hurch , lanning and -ontrol 01(4.% /toner , 5anagement 4th6dition 01(

7lo#d 7 8#ors , lanning 9mplementation 01(4)oss ). )eck , Operations 5anagement 01($7ouis %llen , raining 5anual 01($ Drucker , he ractice of 5anagement 01"4 Dewe# , +ow we think 013;< + %gor , +ow -6O=s make decisions 01($

>ideos provided b# the ?niversit# of -alifornia@ through ageA-omms 0vt. 7td.

-alling the shots

5anagement at work

rogramming for performance

Beeping track.


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AND

DECISION MAKING

PART 1 - INTRODUCTION

DIPLOMA IN BUSINESS LEADERSHIPDIPLOMA IN BUSINESS LEADERSHIP

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G-hance favours onl# the mind that is preparedHG-hance favours onl# the mind that is preparedH

1


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No!"#!$ 2003 R A Fo%&'$!%%(

OBJECTIVE



AND

DECISION MAKING


AND

DECISION MAKING

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%s we e&plained in 5odule 4 A /trategic 5anagement and in the modules coveringfunctional and situational leadership@ all managers are involved in 7%9C@O)C%9/9C@ 76%D9C and -O)O779C.

+owever@ operations managers and most middle level line managers have the directresponsibilit# of Ggetting the job doneH. he# must provide the leadership that is needed

to produce the product or service demanded b# the customer.

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8usiness leaders must solve problems and make decisions. DecisionAmaking must bemade to fit particular circumstances.

6ffective business leaders do not merel# wait for problems to arise: the# activel# look forproblems and opportunities.

Opportunit# finding@ problem finding and problem solving are all important leadershipactivities.

rogrammed decisions are made b# habit@ polic# or standing proceduresK nonAprogrammed decisions are made under new or unusual conditions and re!uire creativethinking and rational considerations.

NON-PROGRAMMED DECISIONS

INTRODUCTIONINTRODUCTION

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% business organisation can be defined as an identifiable entit# created to accomplish aspecific purpose. 9t e&ists with and is part of a large environment.

he organisation itself consists of numerous subAcomponents 0subAs#stems@ all of whichinteract in pursuing the organisational goals.

/everal important s#stems concepts underlie this definition of business. he organisationhas:

7egal

A S,STEMS APPROACHA S,STEMS APPROACH


9dentifiable goals that ma# be e&pressed in terms of profit@service@ or other accomplishments.

8oundaries that limit the nature and t#pes of activities itperforms.

9s part of a larger environment 0another s#stem.

9s made up of subAs#stems that are interrelated in man#comple& wa#s.

6ngages in efforts and actions to ensure that it=s goals arebeing achieved.

9dentifiable goals that ma# be e&pressed in terms of profit@service@ or other accomplishments.

8oundaries that limit the nature and t#pes of activities itperforms.

9s part of a larger environment 0another s#stem.

9s made up of subAs#stems that are interrelated in man#comple& wa#s.

6ngages in efforts and actions to ensure that it=s goals arebeing achieved.

One critical skills of all leaders involves the abilit# to selectthe appropriate decision making process for each problem ordecision

0>ictor +. vroom

One critical skills of all leaders involves the abilit# to selectthe appropriate decision making process for each problem ordecision

0>ictor +. vroom

he business firm and its environment


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T.! B/(! F($" A S)!" V(!4

TIME FOR TEAM WORKTIME FOR TEAM WORK

5

7egal

Covernmentechnological-hange

Other ations

-onsumers

Other-ompanies

Ceneralublic

/upervisors

onAsupervisor# emplo#ees

urchasing

/ales

/enior 5anagement

roduction %ccounting

inance ersonnel

5arketing 6ngineering


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1. 9n #our teams discuss the statement GBUSINESS IS AN OPEN S,STEM67)ecord #our comments.

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2. 8usiness ethics and decisions are closel# related.


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L


THE FUNCTIONS OF MANAGEMENT

A FRAMEWORK FOR OPERATIONAL PLANNING

THE FUNCTIONS OF MANAGEMENT

A FRAMEWORK FOR OPERATIONAL PLANNING

PLANNINGPLANNING

he manager selects the objectives for the subAs#stem of the organisationand the policies@ procedures@ programmes and budgets for achieving theobjectives. his stage also includes clarification of the role and focus onhis functional area in the overall corporate strateg# 05odule 4. 9t alsoinvolves action planning and efforts directed towards product planning@facilities design and the use of the conversion process.

he manager selects the objectives for the subAs#stem of the organisationand the policies@ procedures@ programmes and budgets for achieving theobjectives. his stage also includes clarification of the role and focus onhis functional area in the overall corporate strateg# 05odule 4. 9t alsoinvolves action planning and efforts directed towards product planning@facilities design and the use of the conversion process.

ORGANISATIONORGANISATION

he establishment of an intentional structure of roles and informationflows within the function area. Determining the activities re!uired toachieve the operational objectives and assigning responsibilit# andauthorit# for the achievement of objectives.

he establishment of an intentional structure of roles and informationflows within the function area. Determining the activities re!uired toachieve the operational objectives and assigning responsibilit# andauthorit# for the achievement of objectives.

LEADINGLEADING

9n e&ecuting the plan@ managers are clearl# concerned with how theiractions affected human behaviour.


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PART 1

DECISION MAKING

o ensure that plans are accomplished@ the manager must also e&ercisecontrol. Outputs must be measured and adjustments made as necessar#. 9ffeedback information indicates substantial variances@ then corrective

action must be taken. %ctual solutions to problems ma# not be so simple@but feedback and control measures can often identif# the sources ofproblems and suggest wa#s to solve them.

o ensure that plans are accomplished@ the manager must also e&ercisecontrol. Outputs must be measured and adjustments made as necessar#. 9ffeedback information indicates substantial variances@ then correctiveaction must be taken. %ctual solutions to problems ma# not be so simple@

but feedback and control measures can often identif# the sources ofproblems and suggest wa#s to solve them.

DIPLOMA IN BUSINESS

LEADERSHIP

DIPLOMA IN BUSINESS

LEADERSHIP

THE FINE ART OF EECUTIVE DECISION

CONSISTS IN NOT DECIDING 9UESTIONS

THAT ARE NOT NOW PERTNENT: IN NOT

DECIDING PREMATUREL,: IN NOT

MAKING DECISIONS THAT CANNOT BE

MADE EFFECTIVE AND IN NOT MAKING

DECISIONS THAT OTHERS SHOULD

MAKE;77

THE FINE ART OF EECUTIVE DECISION

CONSISTS IN NOT DECIDING 9UESTIONS

THAT ARE NOT NOW PERTNENT: IN NOT

DECIDING PREMATUREL,: IN NOT

MAKING DECISIONS THAT CANNOT BE

MADE EFFECTIVE AND IN NOT MAKING

DECISIONS THAT OTHERS SHOULD

MAKE;77

?


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hese are broad comple& decisions which are basic to the overall pattern of activit#. he#are multiAdimensional. his means that the# are concerned with man# factors at onceKman# specialised areas@ man# assets and man# people.

he problems are of such a t#pe that one ma# be less concerned to find the answer than todefine the problem.

he limits of the problem are not alwa#s clear.

7astl#@ the# are uni!ue and need to be approached afresh ever# time the# occur. +abitand precedent simpl# suppl# pitfalls.

here are usuall# abundant in number and are in a minor ke#. he problem will berelativel# clearl# defined@ the objectives known@ information available and constraints

appreciated.

%ll that needs to be done is weigh the parts and come up with a solution that optimisessatisfaction@ econom# or whatever else is needed.

hese are the da#AtoAda# decisions of middle management:

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T,PES OF BUSINESS DECISIONST,PES OF BUSINESS DECISIONS

THE STRATEGIC DECISIONTHE STRATEGIC DECISION

THE OPERATIONAL DECISIONTHE OPERATIONAL DECISION

+ow man# units shall we produceM


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9n classif#ing the decision one or all of the following factors should be considered:

DECISION CLASSIFICATIONDECISION CLASSIFICATION

he time span of the decision. he further ahead the less eas# toreverse.

he impact on other areas of the organisation.

he relative proportions of !uantitative and !ualitative data. >alues@people are usuall# made b# senior management.

he fre!uenc# of the decision.

he time span of the decision. he further ahead the less eas# toreverse.

he impact on other areas of the organisation.

he relative proportions of !uantitative and !ualitative data. >alues@people are usuall# made b# senior management.

he fre!uenc# of the decision.

TEAM WORKTEAM WORK

Discuss in #our groups e&amples of recent decisions made b# the

group members and the process the# adopted to make the decision.0+O< D9D +6E 5%B6 +6 D6-9/9OM

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Discuss in #our groups e&amples of recent decisions made b# thegroup members and the process the# adopted to make the decision.

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LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL

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GROUP DISCUSSION

VIDEO PRESENTATION

Discuss the points raised in the video under the following headingsK

COLLECT THE FACTS

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CONSULTATION

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LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL

CONSIDER OPTIONS


COMMUNICATELLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL

TAKE ACTION

DECISIONS DECISIONSDECISIONS DECISIONS

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LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL

FOLLOW UPLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL

DECISIONS AND INTERNAL CHANGE

Once a decision is set in motion it brings about changes within the compan#.ressure can then build up in ke# functional or operational areas:

Objectives and lanning A must be clear@ concise@ measurable@ attainable@

realistic@ understood@ acceptable@ and fle&ible.

5arketing A above all other areas marketing has to adjust !uickl# todecisions and change.

he business operation can be seen as a flow or ad#namic process where there e&ists a series ofrepetitive events or a c#cle.

or this c#cle to function decisions must be taken andunder such circumstances a certain amount of changeis inevitable.

he business operation can be seen as a flow or a

d#namic process where there e&ists a series ofrepetitive events or a c#cle.

or this c#cle to function decisions must be taken andunder such circumstances a certain amount of changeis inevitable.

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ersonnel , he human area is one where change is most readil# felt.

Organisational structure , he larger the organisation the more painful thechange.

DECISIONS AND ETERNAL CHANGE

5ost organisations e&perience pressure from outside the organisation. %mongsuch e&ternal factors should include those set out below.

Covernment and 6conom# , a& controls@ mone# and credit controls@ directintervention. rivate and public s#stems.

Covernment in 7aw 5aking , 7aw constrains business in man# wa#sK tariffs@barriers to entr#@ >%@ /ales ta&@ price controls. /ome laws ma# also protect

business@ e.g. monopol# restrictions.

echnological , /cience and technolog# continues to move forward at some timeor other.

-ompetition , ew entrants@ new products@ changes in taste and fashion. irmsmust be fle&ible and adapt.

/t#les of 5anagement , 5anagement@ leadership@ the wa# people work@ powersharing and team work. %ll companies are affected.

o sta# in business and operate efficientl# business mustbe prepared to adjust to an increasing rate of change.

o sta# in business and operate efficientl# business mustbe prepared to adjust to an increasing rate of change.

1*


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% process in an# action taken b# management to achieve organisational goals andobjectives.


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17 COMPAN, GOALS

-entral to all decision making are organisational goals. 5ost companies havestrategic goals towards which the# are alwa#s striving. 6) +6 )OO -%?/6 O +6 )O8765 %D6/%879/+ /6-99- O86-9>6/ O O>6)-O56 9

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A WRONG DIAGNOSIS INVALIDATES

ALL THAT FOLLOWS

A WRONG DIAGNOSIS INVALIDATES

ALL THAT FOLLOWS

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%s we shall discuss in detail later:

6&ample

37 CONSTRAINTS

%part from the general constraints@ it is important for a manager to recognise hisJherimmediate limits in arriving at a solution.

TIME SPENT IN RECONNAISANCE IS

NEVER TIME WASTED7

TIME SPENT IN RECONNAISANCE IS

NEVER TIME WASTED7

WHAT IS THE APPARENT PROBLEM@

WHAT IS THE REAL PROBLEM@

WHAT IS THE APPARENT PROBLEM@WHAT IS THE REAL PROBLEM@

rices too highM

Iualit# too lowM

Designs unsuitable for the marketM

5arket mi& wrongM

/ales to high for profitabilit# in the pastM

i&ed costs to highM

/olving the wrong problems is often worse than doingnothing at all

rices too highM

Iualit# too lowM

Designs unsuitable for the marketM

5arket mi& wrongM

/ales to high for profitabilit# in the pastM

i&ed costs to highM

/olving the wrong problems is often worse than doingnothing at all

A =$o ( .! %!!% o '%!7A =$o ( .! %!!% o '%!7

WHAT IS THE REAL PROBLEM@WHAT IS THE REAL PROBLEM@

15


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ime is possibl# the most immediate limit.

DecisionAmaking is a ke# part of a manager=s activities. 9t pla#s a particularl# importantrole when the manager is involved in planning. lanning involves the most significantand far reaching decisions a manager can make.

D!&((o M'(, is the process through which a course of action is selected as the

solution to a specific problem.

5an# authors and managers use the term D6-9/9O 5%B9C and )O8765/O7>9C interchangeabl#. %ccording to +uber@ decisionAmaking is making a choicefrom a narrow range of alternatives. roblem solving refers to a broad set of activitiesinvolved in finding and implementing a course of action.

9s this the best time to tackle the problemM

ime span of the decision. /ome problems are more urgent than others.

ime of e&ecution.

ime is mone#

9s this the best time to tackle the problemM

ime span of the decision. /ome problems are more urgent than others.

ime of e&ecution.

ime is mone#

DECISION MAKING THE HUBER MODELDECISION MAKING THE HUBER MODEL


THE HUBER MODEL

0roblem 0/olving 0

0000

roblem 0 /olving 0

0

0 -hoice 0 Decision5aking 0 5aking

0 0

%ctivities dealing with determiningthe e&ercise and importance ofproblems

%ctivities dealing with identif#ingdefining and diagnosing problems

%ctivities dealing with generatingalternative solutions


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9t is not alwa#s clear whether a situation presents a problem or an opportunit#. 5issedopportunities also create problems.

PROBLEM FINDINGPROBLEM FINDING

%n operational problem is a deviation from a standardor e&pectation. o be effective in decisionAmaking@ amanager must be aware of current problems and mustanticipate potential problems.

%n operational problem is a deviation from a standardor e&pectation. o be effective in decisionAmaking@ amanager must be aware of current problems and mustanticipate potential problems.

/%D%)DJ6N6-%9O

Deviation P % roblem

%-?%7 6)O)5%-6 O) /%6 O %%9)/

/%D%)DJ6N6-%9O

Deviation P % roblem

%-?%7 6)O)5%-6 O) /%6 O %%9)/

roblems endanger a compan#=s abilit# to reach its objective

Opportunities offer the chance to e&ceed organisationalobjectives

roblems endanger a compan#=s abilit# to reach its objective

Opportunities offer the chance to e&ceed organisationalobjectives

1?

%ctivities dealing with evaluatingand choosing among alternativesolutions

%ctivities dealing with implementingand controlling the chosen solution


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DECIDING TO DECIDE

o business leader can handle ever# problem that arises. o avoid getting bogged downin trivial matters@ efficient managers onl# deal with problems that re!uire their input. %manager who gives the same amount of attention to ever# problem will get ver# little

work done.


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here are two forms of time available to a manager. hese are:

DISCRETIONAR, TIME0output


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+ere the manager recognises in this problem the same two characteristics common to allthe problems his subordinate has brought to his attention. he manager 0a knowsenough to get involved@ but 0b not enough to make an immediate decision. /o theconversation ends for the moment:

%llan is now a victim of Dave=s imposed time@ and the more often he is a victim@ themore the subordinate will e&pect time from his boss.

urthermore@ %llan has voluntaril# assumed a position subordinate to Date in two wa#s:

erhaps later@ in order to ensure that %llan is working on it@ Dave will drop b# and ask@G+ow=s it goingMH

-%/6


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-hris. he longer the manager dela#s@ the more frustrated becomes -hris withaccompan#ing growth of guilt on the manager=s part.

-%/6 +)66

%t a meeting with hil@ the manager agrees to provide all the necessar# backing for amarket research project he has authorised hil to initiate. he manager=s parting wordsare:

-%/6 O?)

orman has just been transferred from another part of the compan# in order to launchand eventuall# manage a new business venture. he manager has told him that the#should get together soon to hammer out a set of objectives for his new job and adds:

G9 will draw up an initial draft for discussion with #ou.H

9n each instance the manager and the subordinate assume that the matter underconsideration is a joint problem. 9n each case the donke# begins its career astride bothbacks.


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RETURNING THE MONKE,S

Our manager at the office on 5onda# late enough to find his four subordinates gatheredin his outer office waiting to see his about their monke#s. +e calls each subordinatesingl# and e&plains that he purpose of the interview is to shift the monke# on to the deskbetween them and figure out together how the subordinate can best pick it up within thene&t 24 hours.

%s each subordinate leaves the office@ the manager is rewarded b# the sight of a monke#leaving the office on his subordinate=s back. or the ne&t 24 hours the subordinate willnot be waiting for the manager@ instead@ the manager will be waiting for the subordinate.

e&t da#@ at the perspective appointments@ the manager e&plains the principle:

G%t no time 9 am helping #ou with this or an# other problem will #our problembecome m# problem. he instant #our problem becomes mine@ #ou will no longerhave a problem. 9 cannot help a person who hasn=t got a problem.


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he manager must:

HOW TO CARE AND FEED MONKE,S

+ere are five hard and fast rules 0violation of these rules will cost discretionar# time:

CONCLUSION

Outlaw the subordinate=s use of 1 and 2K

6nsure that each problem leaving his office has an assignedinitiative level of 3 or more.

Outlaw the subordinate=s use of 1 and 2K

6nsure that each problem leaving his office has an assignedinitiative level of 3 or more.

5onke#s should be fed or shot. 0one or the otherK if the# suffocate to death #ouwill be obliged to waste valuable time on postAmortem or resuscitation.

he monke# population should be kept below the ma&imum number of managerhas time to feed. +is subordinates will find time to work as man# monke#s ashe finds time to feed. 9t should not take more than 2; minutes to feed aproperl# prepared monke#.

5onke#s should be fed b# appointment onl#. Eour subordinates must bring theirmonke#s to #ouK never look for hungr# monke#s.

ever feed monke#s b# memo or mail. eed face to face or b# telephone.

6ver# monke# should have an assigned sitting@ or ne&t feeding time and anappropriate level of initiative. hese ma# be revised at an# time b# mutualconsent@ but it should never be allowed to become vague.

5onke#s should be fed or shot. 0one or the otherK if the# suffocate to death #ouwill be obliged to waste valuable time on postAmortem or resuscitation.

he monke# population should be kept below the ma&imum number of managerhas time to feed. +is subordinates will find time to work as man# monke#s ashe finds time to feed. 9t should not take more than 2; minutes to feed aproperl# prepared monke#.

5onke#s should be fed b# appointment onl#. Eour subordinates must bring theirmonke#s to #ouK never look for hungr# monke#s.

ever feed monke#s b# memo or mail. eed face to face or b# telephone.

6ver# monke# should have an assigned sitting@ or ne&t feeding time and anappropriate level of initiative. hese ma# be revised at an# time b# mutualconsent@ but it should never be allowed to become vague.

6nlarge #our discretionar# time b# reducing 0even eliminating subordinateAimposed time.

?se a portion of this new discretionar# time to ensure that all subordinatespossess initiative@ without which the# cannot e&ercise initiative and then see to itthat this initiative is indeed taken.

?se another portion of his increased discretionar# time to get and keep controlsfor the timing and content of both bossAimposed and s#stemAimposed time.

6nlarge #our discretionar# time b# reducing 0even eliminating subordinateA

imposed time.

?se a portion of this new discretionar# time to ensure that all subordinatespossess initiative@ without which the# cannot e&ercise initiative and then see to itthat this initiative is indeed taken.

?se another portion of his increased discretionar# time to get and keep controlsfor the timing and content of both bossAimposed and s#stemAimposed time.


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Decision making is the process of selecting a course of action to solve a specific problem.

One criteria of a good decision is its )%9O%79E@ the e&tent to which a chosencourse of action is designed to achieve an objective in an efficient manner.

MANAGERIAL DECISION MAKINGMANAGERIAL DECISION MAKING

TRADITIONAL DECISION MAKING

On the spot judgement calls

+ighl# intuitive in nature

%ssumptions and criteria vague

5echanical application of polic#

?nthinking responses.

TRADITIONAL DECISION MAKING

On the spot judgement calls

+ighl# intuitive in nature

%ssumptions and criteria vague

5echanical application of polic#

?nthinking responses.

T.!) #!%(!! .' .! '! '$o'&. o &.'! ( o

$o&!!= ( .! =($!&(o o! .' $'!%%!= ( .! '7

T.!) #!%(!! .' .! '! '$o'&. o &.'! ( o

$o&!!= ( .! =($!&(o o! .' $'!%%!= ( .! '7

A RATIONAL APPROACHA RATIONAL APPROACH

A%.o/. $'(o'%() ( ' (=!'% o .! o/.: ($'&(&! .! =!&((o "'!$ "/ #! &o! o !%!

o$ o"!.( %!7 R'(o'%() ( #o/=!= o$ %("(!=

#) ("!: &o: ='' &o%%!&(o '= ''%)(7

A%.o/. $'(o'%() ( ' (=!'% o .! o/.: (

$'&(&! .! =!&((o "'!$ "/ #! &o! o !%!o$ o"!.( %!7 R'(o'%() ( #o/=!= o$ %("(!=

#) ("!: &o: ='' &o%%!&(o '= ''%)(7

2

THE PROCESSTHE PROCESS


30/109

One of the main barriers to rational decision making arises from the fact that managershave to promote their own careers while making organisational decisions. his oftenresults in compromises@ inconsistencies and conflict.

17 STATE THE APPARENT PROBLEM

rom a !uick assessment of data and the use of intuition and e&perience@ decide onthe apparent problem.

27 INVESTIGATE THE SOLUTION

Discuss and anal#se the following:

A RATIONAL DECISION MAKING MODEL

A RATIONAL DECISION MAKING MODEL

1. 2. 3.

4. ". $.

'.

I KEEP SI HONEST SERVICE MEN7 THE,

TAUGHT ME ALL I KNOW7 THEIR NAMES ARE

WHAT AND WH, AND WHEN AND HOW AND

WHERE AND WHO7

WHAT: A Describe the incidentJproblem.


31/109

37 DEFINE THE REAL PROBLEM

he real problem ma# or ma# not be the same as the apparent problem. roblemsshould be defined in terms of objectives.

*7 DEVELOP ALTERNATIVES

Do not accept the first feasible solution. Do not evaluate as this stop participants from

generating new ideas. 9ndividual or group brainstorming techni!ues should be used.

BRAINSTORMING

+7 EVALUATE ALTERNATIVES

%ll alternatives should be evaluated on the basis of three ke# !uestions:

7 SELECT THE BEST ALTERNATIVE

A =!&((o "'( $o#%!" o%( !&.(/! ( 4.(&.

'$(&(' $) o ("$o! &$!'(() #) o'!o/%)

$oo( '%!$'(! 4(.o/ &o&!$ o$ $!'%() o$

$'=((o7 DO NOT EVALUATE

A =!&((o "'( $o#%!" o%( !&.(/! ( 4.(&.

'$(&(' $) o ("$o! &$!'(() #) o'!o/%)

$oo( '%!$'(! 4(.o/ &o&!$ o$ $!'%() o$

$'=((o7 DO NOT EVALUATE

9s this alternative feasibleM Do we have the resourcesM Does it meetlegal and ethical considerationsM Does it meet with overall goalsM


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his selection will be based on the evaluation 0" above@ time and informationavailable. 9t could represent a compromise.

57 IMPLEMENT AND FOLLOW UP

his step involves more than just giving orders. )esources ma# need to be ac!uired

and all allocated. )esponded. )esponsibilit# delegated. rogress reports and controls.8udgets and time schedules. %ll these can be covered b# the use of an %ction lan.

OPPORTUNIT, COSTS


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aulo 6ngineering -ompan# manufacture small units. he demand for the product isgrowing. he# recentl# increased their production b# introducing two new production

lines@ one working b# da# 14;; hours to 1(;; hours@ the second from 2;;; hours to 24;;hours.

One of the components@ a switch circuit is soldered to the unit b# manual operation. hisis a delicate operation and re!uires a high degree of skill to ensure that the circuit iscomplete and the joint is well made.

wo weeks after the introduction of the new production lines@ a number of customercomplaints were received. he switching units were not functioning and the wiring jointswere breaking.

he majorit# of the workers emplo#ed on the new production lines were #oung schoolleavers@ who had onl# received two weeks training.

ollowing further investigation@ it was discovered that the majorit# of the poor !ualit#units had been assembled b# the da# shift. One vital aspect of the switch assembl# wasthe voltage provided to the soldering e!uipment. 9t was essential that this remained at22;J23; volts. %n# drop below 22; volts resulted in a soft joint@ which would not hold.

ower supplied to the factor# was subjected to fluctuations during the da# due to the

draw down b# the heav# industries in the area. %fter 1';; hours when the majorit# ofthe factories closed@ the suppl# was stead#.

27 I!('! .! $o#%!"


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LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL

W.!$! =(= ( .'!@ 08e specificLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL

LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL

W.! =(= ( .'!@ 0ime of da# or weekLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL

LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL

W.o 4' (o%!=@ 0eople directl# involvedLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL

W.) =(= ( .'!@



Ho4 =(= ( .'!@




37 D!(! .! R!'% P$o#%!"

32


35/109

*7 D!!%o So%/(o 0Do not limit #our alternatives. e.g. move to 8otswana0DO O 6>%7?%6 /?CC6/9O/ % +9/ /%C6

LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL





+7 E'%/'! '= !%!& .! B! So%/(o )efer to paragraph " page 2 and socialJeconomic factors page 3;

7 I"%!"! '= Co$o%

Develop a specific objective to implement #our decision:


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AUTOCRATIC

CONSULTATIVE

GROUP

DECISION MAKING ST,LESDECISION MAKING ST,LES

GROUP WORK

GROUP WORK

%9: Eou solve the problem or make the decision #ourself@ using informationavailable to #ou.

%11: Eou obtain information from #our subordinate0s@ then decide on thesolution #ourself. Eour subordinates provide information rather than

generate alternatives.

%9: Eou solve the problem or make the decision #ourself@ using informationavailable to #ou.

%11: Eou obtain information from #our subordinate0s@ then decide on thesolution #ourself. Eour subordinates provide information rather thangenerate alternatives.

-1 : Eou share the problem with individuals@ get ideas and suggestions 0not asa group. hen #ou make the decision which ma# or ma# not reflect#our subordinates= influence.

-11 : Eou share the problem with #our subordinates as a group collectivel#obtaining their ideas and suggestions. Eou make the decision whichma# or ma# not reflect #our subordinates= influence.

-1 : Eou share the problem with individuals@ get ideas and suggestions 0not asa group. hen #ou make the decision which ma# or ma# not reflect#our subordinates= influence.

-11 : Eou share the problem with #our subordinates as a group collectivel#obtaining their ideas and suggestions. Eou make the decision whichma# or ma# not reflect #our subordinates= influence.

C1 : Eou share a problem with #our subordinates as a group.ogether #ou develop and evaluate alternatives and attempt to reach-onsensus. Eour role is that of team coach. Eou are willing to accept%nd implement a solution that has the support of the group.

C1 : Eou share a problem with #our subordinates as a group.ogether #ou develop and evaluate alternatives and attempt to reach-onsensus. Eour role is that of team coach. Eou are willing to accept%nd implement a solution that has the support of the group.

33


37/109

APPL,ING THE MODEL

PROBLEM

ATTRIBUTES

DIAGNOSTIC

9UESTIONS0%. Iualit# of the decision 9s there a !ualit# re!uirementM

9s one solution more rationalM

08. he leader=s knowledge@ e&pertise@information

Do 9 have sufficient knowledge to make ahigh !ualit# decisionM

0-. /tructure of problem 9s the problem structuredM

0D. %cceptance and -ommitment 9s acceptance b# subordinates criticalM

06.


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CASE 1

CASE 2

Eou are building a main roadwa# and have to estimate #oure&pected rate of progress in order to schedule the deliver# of

materials.

Eou know the terrain and have all the historical data in order tocalculate the mean and variance in the rate of speed. Eou are theonl# person technicall# !ualified as an engineer.

9f #ou underestimate@ workers will stand idle and materials will betied up before being used.

rogress to date has been good. %ll workers will receive bonusesif the project is finished ahead of time. he# are aware of this and

have worked ver# hard.


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No!


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WORKPAPER

CASE 1

CASE 2

LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL

DECISION MAKING ST,LESDECISION MAKING ST,LES

3


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DECISION MAKING

0- * O)+


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%) 2


On completing this part delegates should be able to:

1. Describe the basic steps in the operational planning process.

2. %nal#se a need and design a specific objective and standards.

3. repare a detailed action plan including programme steps@ schedules and budgets.

4. 9dentif# and describe management techni!ues that can make planning moreeffective


38


43/109


44/109

he overall objective of operational planning is to meet the compan#=s basic strategicgoals. he compan#=s strateg# and strategic focus can be translated into operationalobjectives which specif#:

OPERATIONAL PLANNING OBJECTIVESOPERATIONAL PLANNING OBJECTIVES

)OD?- 0/6)>9-6 -+%)%-6)9/9-/

)O-6// -+%)%-6)9/9-/

-?/O56) /6)>9-6Iuantities and deliver# dates

)OD?- 0/6)>9-6 I?%79E

69-96-E %D 66-9>66//

7abour relations7abour cost control5aterial cost controlacilit# utilisation

%D%%8979E O) ??)6 /?)>9>%7

)OD?- 0/6)>9-6 -+%)%-6)9/9-/

)O-6// -+%)%-6)9/9-/

-?/O56) /6)>9-6Iuantities and deliver# dates

)OD?- 0/6)>9-6 I?%79E

69-96-E %D 66-9>66//

7abour relations7abour cost control5aterial cost controlacilit# utilisation

%D%%8979E O) ??)6 /?)>9>%7

3?


45/109


-O55956/ O


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OPERATIONAL FRAMEWORK

FOR OBJECTIVE SETTING

OPERATIONAL FRAMEWORK

FOR OBJECTIVE SETTING

+6O)69-%7 +96)%-+E O6)%9O%7 I?6/9O/

5ission and urpose A 1.


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Operational planning is a fundamental process and can be condensed into fourbasic steps that can be adapted to all planning activities at all operational levels.

STEP 1 ESTABLISH A SET OF OBJECTIVES


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L'& o E($o"!'% Ko4%!=!

o set clear objectives the effective manger needs to understandthe e&ternal environment:

-ompetition

-ustomers

/uppliers

Covernment agencies

6tc


49/109

THE FOUR BASIC STEPS IN PLANNING

/6 1 /6 2


STEP 1 STEP 2

STEP 1 STEP 2

STEP * STEP 3


STEP 1 STEP 2

STEP 1 STEP 2

STEP * STEP 3

6/%879/+-76%)

O86-9>6/

D696 +6)6/6

/9?%99O

D6>67O %%-9O

7%

D66)596%9D/ %D8%))96)/

**


50/109

here are two main t#pes of operational plans. 01 /ingle use plans , these are developedto achieve specific objectives and dissolved when the objective has been achieved. 02

DO FIRST THINGS FIRSTDO FIRST THINGS FIRST

PROGRAMMING AND SCHEDULING9dentif# all ke# steps that have to be taken towards reaching #our specific objective.7ist in order of priorit#. % time se!uence should then be allocated to each

programme step 0scheduling.

ACCOUNTABILIT,Decide who is overall responsible for achieving the individual programme steps.

PROCEDURES6nsure that correct operating procedures are in place. % detailed set of instructionsfor performing a se!uence of actions.

BUDGET%llocate financial and other resources to meet the re!uirements of each programmestep.

POLICIES6nsure that all actions taken and decisions made are within the boundaries orconstraints of compan# polic#.

PROGRAMMING AND SCHEDULING9dentif# all ke# steps that have to be taken towards reaching #our specific objective.

7ist in order of priorit#. % time se!uence should then be allocated to eachprogramme step 0scheduling.

ACCOUNTABILIT,Decide who is overall responsible for achieving the individual programme steps.

PROCEDURES6nsure that correct operating procedures are in place. % detailed set of instructions

for performing a se!uence of actions.

BUDGET%llocate financial and other resources to meet the re!uirements of each programmestep.

POLICIES6nsure that all actions taken and decisions made are within the boundaries orconstraints of compan# polic#.


SET SPECIFIC OBJECTIVES

PROGRAMME AND SCHEDULES

ACCOUNTABILIT,

PROCEDURES

BUDGETS

POLIC,


SET SPECIFIC OBJECTIVES

PROGRAMME AND SCHEDULES

ACCOUNTABILIT,

PROCEDURES

BUDGETS

POLIC,

*+


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/tanding plans , these are standardised approaches for handling recurrent and predictablesituations.

THE HIERARCH, OF OPERATIONAL PLANS

/ingle use lans , roblems that do not occur repeatedl#

/tanding lans , 6stablished polic# to deal with recurringevents andactivities

THE HIERARCH, OF OPERATIONAL PLANS

/ingle use lans , roblems that do not occur repeatedl#

/tanding lans , 6stablished polic# to deal with recurringevents andactivities

/)%6C9- CO%7/

/)%6C9- 7%/

O6)%9O%7 7%/ 0O86-9>6/

/9C76 ?/67%/

/%D9C 7%/

)OC)%5/

)O6-/8?DC6/

O79-E

/%D%)DO6)%9C

)O-6D?)6/

)?76/

*


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Civen background information about an organisation need@ #ou should be able to prepare@without help@ a specific objective and accompan#ing statement of standards to meet thatneed. 9n the response #ou prepare:

the specific objective will clearl# state the results necessar# to

meet the needK

the standards will be easil# understood and measurableK

and accountabilit# and completion time for achieving the specific

objective will be stated.

No!:

Developing Objectives is an important activit# performed b# the professional manager.

9t is also a comple& activit#@ dependent upon man# variables.

9n this module #ou will be shown the basic skills involved in developing objectives. hesession to follow will discuss the application of these skills@ and give #ou practice in theiruse.

OVERVIEW THE ACTION PLAN

he action plan is@ in effect@ a roadmap that enables us and our subordinates to achieveorganiational objectives effectivel# and efficientl#. %n introduction to needs anal#sisand the components of the action plan follows.

N!!= '!"!


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P$o$'" S!

Once we have our specific objective standards@ we need to think through the various stepsnecessar# to accomplish the objective.


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APPARENT NEEDS

MAINTENANCE DEPARTMENT

NOTES

LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL

APPARENT NEEDS STATEMENT

LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL

1. ?nscheduled downtime for minorrepairs to the electrical s#stem hasincreased fift# percent in the lastthree months.

1. here is too much unscheduleddowntime for minor repairs to electricals#stem components.

2. 9t takes the electrical crew too longto find a trouble spot in the s#stem@and even longer to make thenecessar# repairs

2. he electrical crew takes too lone tolocate trouble spots and make minorrepairs

3. he safet# inspector=s last reportnoted that the accumulation ofcombustible materials and debrisaround laboratories was approachingthe danger level. +e mentionedli!uid solutions and other waste

materials@ as well as a general lack ofcleaning 0floors not swept@ bo&es leftl#ing around@ etc.

3. oo man# haards conditions e&ist inand around laboratories.

4. he safet# inspector also listed anumber of heating e!uipment itemsthat need repairs@ oiling@ replacementof missing parts@ etc.

4. 5aintenance and minor repairs ofheating e!uipment are not handledregularl#.

66D/ /%656/ DO= /%E %E+9C%8O? +O< O /O7>6 +6 )O8765.

+6 999%7 79/9C O 66D/ 9/ O 9O)D6) O 95O)%-6.

+6 999%7 79/9C DO6/ O D66)596 9+6E %)6 %%)6 66D/ O) )6%7 66D/

66D/ /%656/ DO= /%E %E+9C%8O? +O< O /O7>6 +6 )O8765.

+6 999%7 79/9C O 66D/ 9/ O 9

O)D6) O 95O)%-6.

+6 999%7 79/9C DO6/ O D66)596 9+6E %)6 %%)6 66D/ O) )6%7 66D/

*?


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". 6lectrical and heating crew memberscould not perform minor repairs ore&plain s#stem malfunctions on threeseparate occasions.

". 5an# of the heating and electrical crewmembers are not sufficientl# familiarwith the e!uipment and s#stems.


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T.! !&((& O#!&(!

Eour first step in meeting the need #ou have identified is to think through thespecific@ concrete results #ou must achieve in order to satisf# that need. hehardest problem in developing a specific objective is to make it concrete , #ourobjective should describe a specific result that can be accomplished within adefinite period of time.

+ere are some ideas that will help #ou write better specific objectives:

1. Describe results #ou can see@ feel@ weigh@ or otherwise measure. Don=t useabstractions.

2. 7ist onl# one primar# result in #our specific objective. his helps #oufocus #our efforts.

3. 5ake sure #our specific objective is clear and concise.

4. 5ake sure that the result described in the specific objective will@ ifachieved@ satisf# the need #ou have identified.

+ere=s an e&ample of a specific objective designed to meet a need:

N!!=

/ales in )egion " are less than half of those in comparable regions@ and should bebrought into line.

S!&((& O#!&(!

S7O7717 SALES INCREASE. o raise sales volume in )egion " b# 2;R in thefirst !uarter of this fiscal #ear@ whilst maintaining !ualit# and not increase in sales

e&penditure.

+0


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T.! S'!"! o S'='$=

Once we have defined what it is we want to accomplish b# developing a specificobjective@ we ne&t need to state what evidence will show us that we have met thatobjective.


58/109

SUMMAR,

o implement an# operational decision we must first clearl# outline what drafting a

specific objective re!uires.

1. 5ust be concise

2. 5ust be measurable:

ime

-ost

Iuantit#

Iualit#

AVOID

3. 5ust be realistic

4. 5ust be fle&ible

". 5ust be understood

$. 5ust be accepted.

+2

%s soon as possible9n due courseull #our socks up etc

%s soon as possible9n due courseull #our socks up etc


59/109

VIDEO DISCUSSION

G$o/ Wo$

9n this video the word %)C6 is used , not objective. Discuss the main points raisedand lessons #our group learnt:

S!&((&

LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL

LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL

M!'/$'#%!


A$!!=LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL

R!'%((&



T("! Bo/=!=


+3


60/109



61/109

GROUP WORK

hink about a need from #our own work situation. 6:

LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL














LLLLLLLLLLLLLL

+*


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GROUP WORK

E6/ O

01 9s the objective clear and conciseM

02 9s the objective result orientedM

03 9s the objective realisticM

04 9s the accountable manager identifiedM

0" 9s each standard clearM

0$ Do the standards specif# in measurable terms@ the re!uired level of performanceM

0' %re all performance standards realisticM

-heck the /6-99- O86-9>6 #ou wrote against the followinglist:

-heck the /6-99- O86-9>6 #ou wrote against the followinglist:

9 +6 %/


63/109

GROUP WORK

Debtor collection at %8- 7td is poor. 5ost pa#ments due are $; da#s behind. 9n the lastfinancial #ear over S1@" million was written off as bad debts.

ohn hiri is the debtors clerk and he reports to the accounts supervisor.

he latest schedules reflects the following position:

3; Da#s A S"4; ;;;

$; Da#s A S42; ;;;

; Da#s and over A S24; ;;;

3; Da#s A S"4; ;;;

$; Da#s A S42; ;;;

; Da#s and over A S24; ;;;

he accountants /pecific Objective and /tandards:

Ghe accounts supervisor shall reduce all debtors over 3; da#s andfollow up fre!uentl#H.

/tandards

)egular weekl# follow ups

%ll debtors over 3; da#s to be contacted and outstanding moniescollected.

he accountants /pecific Objective and /tandards:

Ghe accounts supervisor shall reduce all debtors over 3; da#s and

follow up fre!uentl#H.

/tandards

)egular weekl# follow ups

%ll debtors over 3; da#s to be contacted and outstanding moniescollected.

+


64/109

9UESTION


65/109







L

SUMMAR,

%n objective must meet an identified need. 9f results are achieved@ the need should besatisfied.

he statement of desired results must be e&pressed in clear@ concise terms.

/pecific objectives should be accompanied b# standards@ which provide a measure ofhow well a given individual has done in accomplishing desired results.

he standards should include a statement of who is accountable for accomplishing theobjective:

not necessaril# who is going to do the workK

rather@ who is accountable for seeing to it that the stated objective isaccomplished.

/tandards should also specif# a definite time for the completion of the objective.

/tandards should be:

measurable

realistic

fle&ible

+8


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understood and accepted


67/109

P$o$'""(:

S&.!=/%(: '= B/=!(

P$o$'": S&.!=/%!: '= B/=!

Once #ou have completed #ou needs anal#sis and have developed the specific objectivesand standards@ #ou have effectivel# defined what #ou intend to achieve. Eour ne&t step isto state how #ou will accomplish the results #ou have specified. he management toolsfor doing this are programs@ schedules@ and budgets.

8riefl#@ a program is a se!uential listing of the action steps necessar# to accomplish theresults stated in #our specific objective. his includes a statement of who is accountablefor the accomplishment of each program step.

/chedules assign a time frame to #our plan , a starting date and a completion date foreach step and for the program as a whole.

8udgets are a means of allocating limited resources in the most effective manner.8udgeting fre!uentl# involves tradeAoffs@ one of the most common being the acceptanceof a longer completion period in return for the e&penditure of fewer resources.

7et=s take a closer look now at the format used in programming@ scheduling@ andbudgeting.

P$o$'" S!

Our first job is to determine precisel# how we will go about accomplishing our objective.his involves identif#ing the various program steps re!uired to get the results we havespecified. irst@ we list each step separatel#@ without tr#ing to define the precisese!uence in which the# must be accomplished. his gives us a good picture ofever#thing we must do to achieve our objective.

ollowing this@ we are read# to anal#se the flow of work. erhaps some program stepscannot start until others have been completed. 9n other situations@ its ma# be possible toundertake several steps at the same time.


68/109

he steps involved in setting up a program@ then@ are as follows:

1. /pecif# the various program steps to be accomplished.2. %rrange them in a logical se!uence.3. /pecif# who is accountable for carr#ing out each program step.

S&.!=/%(

Developing a realistic schedule and sticking to it is one of the most important means ofreaching a planned objective. % good method for preparing a realistic schedule is theminimaxtechni!ue. his involves estimating the minimum 0or optimistic time re!uiredto complete each program step@ and the ma&imum 0or pessimistic time for each step.Eou ne&t draw on #our knowledge of factors that are likel# to affect the work andestimate the most likel# completion time. his third figure will generate fall somewherebetween the first two.

?se ever# available resource to help make these estimates realistic. 9f #ou or others havecarried out similar programs in the past@ consult the records to find out how long the workactuall# took.

+ere are the steps:

17 D!!$"(! o("((& ("!7

8egin b# estimating when each program step will be completed if ever#thing goeswell. Don=t worr# about the desired completion date for the program at thispoint. 9f #ou tr# to make #our estimate fit that completion date@ #ou ma# betempted to cut back time allotments unrealisticall# for some or all of #ourprogram steps.

9nstead of tr#ing to make the schedule fit the program completion date@ use thescheduling process to verif# the feasibilit# of the desired date.


69/109

here are man# wa#s of estimating the most likel# time@ but most come down togood judgement. /ometimes taking a point halfwa# between optimistic andpessimistic times will be accurate enough.

B/=!(


70/109

DIRECTIONS

1. 7et=s use the programming@ scheduling@ and budgeting approach we=ve justreviewed. lease refer to the specific objective and standards #ou prepared as part

of the module on developing objectives 0age "'

2. 9n the space below@ write a program@ schedule@ and budget for the achievement ofthat objective.

PROGRAM

STEPS

ACCOUNT-

ABILIT,

SCHEDULE

S'$F((.

BUDGET

U(

2


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S/""'$)

he steps involved in programming@ scheduling@ and budgeting are as follows:

1. )eview each specific objective.

2. 9dentif# the program steps necessar# to achieve each specific objective.

3. ut the steps in se!uence and number them.

4. /pecif# accountabilit#.

". repare a schedule@ using the minimax approach when it is helpful.

$. -alculate the value of achieving the specific objective.

'. Determine the cost of each program step.

(. -onvert all costs into mone#@ if feasible.

.


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0956 %77O


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he installation although comple& can be broken down into si& or seven ke# activities.Eou have ade!uate resources to carr# our #our plan. % budget of S'@" million has beenprovided for installation etcF

-hief 6ngineer is !ualified to install test etc. +e will be accountable for the operation.

Eour electrician will deal with all electrical re!uirements.

Eour technical training officer will give practical training to all operators. his shouldonl# take 2 0wo full da#s@ as the# are alread# familiar with the machines and havereceived a number of da#s theoretical training.

-oncrete beds and steel support has not #et been done. his will take between 3 0threeand ' 0seven da#s.

ake deliver#@ check and install will take between 1 and 4 da#s

it new electrical switch bo&es will take between 3 and " da#s. ower 0V6/% must bedisconnected before new cabling can be connected.


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FORM 1

SPECIFIC OBJECTIVES

S!&((& O#!&(!

To

S'='$=

17

27

37

*7

+7

P$o!& L!'=!$ D'!


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FORM 2

ACTION PLAN

P$o!& L!'=!$ Co"%!(o D'!

PROGRAMME STEPS ACCOUNTABLE SCHEDULE BUDGET

COSTS

COMMENTS

START FINISH

5


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PART 3

OPERATIONAL PLANNING AND

DECISION MAKING TECHNI9UES

OPERATIONAL PLANNING AND

DECISION MAKING TECHNI9UES

8


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T,PES OF

DECISIONS

TRADITIONAL

METHODS

MORDEN

METHODS

rogrammed:)outine@ repetitive

Organisation hasspecific process forhandling them.

1. +abit2. -lerical routine3. /tandard procedures4. Organisational

structure:

-ommon e&pectations

/#stemof subAgoals

Coodinformationchannels

1. Iuantitativemethods

2. -omputers

onAprogrammed:One shot@ poorl#structured@ novel.

+andled b# generalproblem solvingprocess

1. udgement@ intuition@creativit#.

2. )ule of thumb.

3. /election andtraining ofe&ecutives.

-reative problemsolving techni!uesapplied to:

raining Devising new

computer techni!ues

?

DECISION MAKING TECHNI9UESDECISION MAKING TECHNI9UES


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S,STEMS DECISION MODEL

HUMAN DECISION MODEL

DECISION MAKING

MODELS

DECISION MAKING

MODELS

%ssumptions

8ased Derived Operational on from framework

6!uations

%ssumptions

8ased Derived Operational on from framework

6!uations

-omputerDecision

8ehaviourremises

erson=s )olein life

erception ofthe environment

8ased Derivedon from erson=s

ersonalit#

Bnowledge%nd thought

erson=s )olein life

erception ofthe environment

8ased Derivedon from erson=s

ersonalit#

Bnowledge%nd thought

+umanDecision8ehaviour

remises

50


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in

SPECIFIC PLANNING S,STEMSSPECIFIC PLANNING S,STEMS

GENERAL MODELGENERAL MODEL

9?/ )andom fluctuations O??/

5onitor %djustM output

eedback

9?/ )andom fluctuations O??/

5onitor %djustM output

eedback

7a

nd

7a

bour

-a

pital

Co

ods

/er

vices

-onversion rocess

-omparison:actuals vs. desired

DEPARTMENT STORE

9?/ )andom fluctuations: O??/7ate deliver#)ecession/taff turnover

0W or Aeedback

/tock levels


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V'$('&! '= E&!(o

he simplest and most effective control is a good s#stem of e&ception reporting. %s wementioned earlier@ this means that #ou become involved onl# when there is a significantdeviation from the plan.

5inor deviations are variances and can be corrected locall#. /ignificant deviations aree&ceptions and call for immediate@ special reporting@ because if the# are not corrected promptl#the entire program will be jeopardied. o distinguish between the two@ establish controllimits. Deviations falling within the control limits are the variances@ while deviations fallingoutside the control limits are the e&ceptions. % graphic representation of this is shown below:

06&ception A significant deviation from plan. )e!uires immediate@ specialreport and prompt corrective action b# higher levels.


0>ariance , can be corrected b# pers re!uire a special report or managementcorrective action.LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL

/tandardLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL


-ontrol limits must be specified in some unit of measure , percentages@ time periods@ or thelike. or instance@ one of the standards of a Data rocessing 5anager=s action plan called forroutine maintenance of all e!uipment and s#stems once a month plus or minus two da#sK thatis@ within a fourAda# period. he upper and lower control limits were one month plus or minusone weekK that is@ within a twoAweek period.

9f routine maintenance fell outside the fourAda# period allowed for in the standard but withinthe twoAweek period encompassed b# the control limits@ it was left to the Data rocessingmanager to correct his performance. 8ut if routine maintenance was being carried out more

often than once ever# three weeks@ too much time was being spent on this activit#. /imilarl#@if the periods between maintenance stretched be#ond five weeks@ the potential for problemswith the s#stems would increase significantl#. 9n either case@ e&ception reporting would bere!uired.

6

v

v

6

52

53


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One of the man# planning techni!ues for dealing with interdependent activities and resourcesso that the# come together in a common goal is the -)99-%7 %+ %%7E/9/ 0-..%.

CRITICAL PATH ANAL,SISCRITICAL PATH ANAL,SIS

% /%576 6


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Eou are going to make an assembl# comprising of two parts. he events are as follows:

-? %D %/6

Draw a network -..%. and determine the critical path.

5*

GROUP WORKGROUP WORK

WORK AREA

CRITICAL PATH @ DA,S

WORK AREA

CRITICAL PATH @ DA,S

C A /tartNA ;+ A rocure art 1 5aterial A CA 49 A rocure art 2

5aterial A CA 3 A 5achine art 1 A+A $B A 5achine art

2 A 9A "7 A %ssemble art 1 and art 2 A JBA 25 A 9nspect and

test A 7A 1 A inish A5A ;

C A /tartNA ;+ A rocure art 1 5aterial A CA 49 A rocure art 2

5aterial A CA 3 A 5achine art 1 A+A $B A 5achine art

2 A 9A "7 A %ssemble art 1 and art 2 A JBA 25 A 9nspect and

test A 7A 1 A inish A5A ;

9dentification7etter 9mmediateredecessor


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6fficienc# relates to the ratio of outputs and inputs. roduct or service outputs to land@ capitalor labour inputs.

GROUP WORK

PLANNING AND DECISION

MAKING TECHNI9UES

PLANNING AND DECISION

MAKING TECHNI9UES

ECONOMIC EFFICIENC,ECONOMIC EFFICIENC,

69-96-E P O?? N 1;;R0R 9?

69-96-E P O?? N 1;;R0R 9?

5anagement sets an individual work standard reflecting anaverage worker=s normal amount of output per unit of timeunder normal working conditions. he standard is 2;; widgetsin one hour. 9f the worker produces 1"; widgets per hour@ howefficient is the operationM

7%8O?)69-96-E

%nswer R P

5anagement sets an individual work standard reflecting anaverage worker=s normal amount of output per unit of timeunder normal working conditions. he standard is 2;; widgetsin one hour. 9f the worker produces 1"; widgets per hour@ howefficient is the operationM

7%8O?)69-96-E

%nswer R P M

5


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5O , 1$;


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GROUP WORK

9n #our groups plot the %8- sales data on the above graph and draw a sales line.

orecast what the sales might be in 1$ and 1'.





9f #ou found it difficult to forecast because the raw data had not been processedinto a form to help #ou@ the moving or weighted average method should be used.

%verage the three #ear periods to produce what is called a )6D 7960smoothing effect.

58


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PLOT ,OUR SALES AND TREND LINE AND FORECAST 1?? AND 1??5

/%76/ %D )6D 796

SALES RECORD WEIGHTED AVERAGESALES RECORD WEIGHTED AVERAGE

5O>9C

E6%) /%76/ O%7

1(' A 22;

1(( A 234

1( A 21$ FFFFFFFFF$';

1; A 21 FFFFFFFFF$$

11 A 211 FFFFFFFF F$4$

12 A 23; FFFFFFFFF.$$;

13 A 22( FFFFFFFFF.$$

14 A 23 FFFFFFFFF.$'

1" A 23; FFFFFFFFF.$'LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL

%>6)%C60$';J3 P 0$$J3 P

0$$J3 P 0$'J3 P0$4$J3 P 0$'J3 P0$$;J3 P

5O>9C

E6%) /%76/ O%7

1(' A 22;

1(( A 234

1( A 21$ FFFFFFFFF$';

1; A 21 FFFFFFFFF$$

11 A 211 FFFFFFFF F$4$

12 A 23; FFFFFFFFF.$$;

13 A 22( FFFFFFFFF.$$

14 A 23 FFFFFFFFF.$'

1" A 23; FFFFFFFFF.$'LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL

%>6)%C60$';J3 P 0$$J3 P0$$J3 P 0$'J3 P0$4$J3 P 0$'J3 P0$$;J3 P

LL

2"; LL LL24; LL LL23; LL LL22; LL LL 9 9 9 9 9 9 9 9 9 9 9 9 9

( ; 1 2 3 4 "

LL

2"; LL LL24; LL LL23; LL LL22; LL LL 9 9 9 9 9 9 9 9 9 9 9 9 9

( ; 1 2 3 4 "

5?


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9n toda#=s world@ it is not eas# to ma&imise a situation because of the cost ofinformation. 5ost companies will /%9/9-6 0%mericanism which meansaccept a satisfactor# return.

Eou are currentl# running a small shop. Eou purchase ";; loaves bread each da#

from the baker#. he average bread stock left at the end of each da# is 2" loaves.he cost of bread from the baker# is S2@;; per loaf. Eou sell the old 0stale leftover bread for S;@"; cents per loaf. 9f more accurate information was availableto reflect customer throughAput@ what would #ou will willing to pa# for thisinformation. 9f #ou run out of bread and cannot suppl# the customer@ the sale ofother commodities will drop. -omment after considering 6.>..9.

1. +ow much does it cost to sign a S";; che!ueMM

2. enders , what do the# costMM


EPECTED VALUE OF PERFECT

INFORMATION

EPECTED VALUE OF PERFECT

INFORMATION

GROUP WORKGROUP WORK

DONT SPEND 1:00 TO RECOVER 10 CENTSDONT SPEND 1:00 TO RECOVER 10 CENTS

REMEMBER: THE SEARCH FOR MORE FACTSREACHES A POINT OF DIMINISHING

RETURNS;

SELECT CRITICAL FACTS6

REMEMBER: THE SEARCH FOR MORE FACTSREACHES A POINT OF DIMINISHING

RETURNS;

SELECT CRITICAL FACTS6

80


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Eour division is organising a trade displa#. Eou want to make as much mone# aspossible. -onsider the model below and comment.


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Discuss the following problem and comment. ake the risk factor into account.D$'4 ' =!&((o $!!7


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-onsider a team that assembles electronic games@ man# of which fail !ualit#control inspection. he supervisor has been trained in !ualit# circle techni!uesand decides to use the team in solving the problem of defective games. %s theteam identifies the reasons for rejection@ the supervisor lists them on the flipchart:

e&t the team decides to track the number of times a defect occurs during themonth of une. he# take readings on ever# 3rdworking da#@ for a total of sevenreadings during une@ as shown in the table below. %t the end of the month@ the#review their chart and find that a Gloose wireH occurred most often@ followed b#two other common defects: wrong alignment and loose screw. +ere=s what the#found:

DEFECTFRE9UENC, IN JUNE B, DATE

TOTAL3 ( 11 1$ 21 24 2

7oose screws 2 3 $ 2 13

7oose wire 3 3 4 2 4 1$

5issing part 1 1 1 1 4


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DEFECT NUMBER PERCENTAGE

7oose screws 1$ 2$

7oose wire 1" 24

5issing part 13 21


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umber of

Defects

01$

he advantage of plotting the cumulative line is that it enables the team to see where to investtheir problem solving energies. he curve is relativel# steep over the first four reasons forreject@ which account for ($R of all rejects. 8ut the remainder of the curve is relativel# flat@reflecting the fact that the remaining three reasons for reject onl# account for 14R of allrejects. his is the familiar Glaw of diminishing returnsH at work: the results of tackling the lastthree t#pes of defect ma# not be worth the effect involvedF at least until the steeper part of thecurve@ where the percentages are greater@ have been tackled. 5oreover@ the team ma# have alsohad a Gripple effectH and reduced the less fre!uent defects through improvements made on themore fre!uent ones.

%nother feature of the diagram is that teams can place two consecutive areto Diagrams sideA

b#Aside to demonstrate if the corrective action worked. or e&ample@ we=ve placed une=sdiagram n e&t to ul#=s so #ou can see the difference after the team took corrective action.here are several features of the diagram that illustrate improvement. he number of defectshas gone from $2 to 3;@ resulting in a reduction in the sie of bars@ the appearance of fewerbars 0since the less fre!uent defects have been eliminated entirel#@ and a lower cumulativeline.

$'

P'$!o D('$'" are a ver# effective device in making presentations to managers since the#can visuall# e&plain the major problems and the GbeforeH and GafterH fre!uencies.

0$2

8+

3oofDe

fects

1;;R

1;;R

3oofDefects

3;

';

$;

";

4;

3;

2;

1;

;7oose


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%fter the team completes the areto Diagram@ it is now read# to e&amine thecauses for the major problem. )ecall that the team we=ve been working withfound that the major causes of defects is the Gloose wireH. he supervisor nowuses another !ualit# circle tool@ G-ause and 6ffect Diagram@H also referred to asthe GfishAbone diagram@H to determine possible causes of loose wire. hesupervisor draws the diagram@ placing the four possible causes in each of four

bo&es and the Gloose wireH defect at the end of the arrow. he supervisor thenadds several lines under each cause so that specific causes can be recorded.

ow@ we=d like #ou to become a member of our fictitious team. On each of thelines@ place the specific causes that #ou feel might result in the Gloose wireH.


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?sing the brainstorming techni!ue@ the team fills in the possible causes of theGloose wireH. he more causes brainstormed@ the better the diagram. %ll ideas arewritten down on the diagram.

%fter likel# causes have been brainstormed and listed on the diagram@ consensusseeking reduces the list to the most probable causes.

85

Distractions isual %bilit#


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9n a Gtrue consensusH situation@ the team would agree on the most probablecauses and subse!uent rankings without voting. ?suall# this occurs in matureteams that are at earlier stages of development@ decisions are reached b# votingfor the most likel# causes.

/ince the team under discussion is in its earlier stages@ the supervisor asks themembers to vote for as man# causes as the# want. he number of votes forGassembl#Aline handlingH is 1; Gsolder temperaturesH and also receives a 1;. hesupervisor sees that two causes ties for the highest vote.

ow the supervisor asks the team to vote for one of the topAranked causes. heteam votes G$H for Gsolder temperatureH and G4H for Gassembl#Aline handling.H

/ince the team ranks Gsolder temperatureH as the most likel# cause for the loosewire@ it must now decide on possible solutions. he solutions are brainstormed@listed and@ using consensusAseeking@ are ranked in order of human and machineimplementation costs. he team decides to raise the temperature of the solder b#1;; degrees for one week and plot the number of Gloose wiresH for the week on

88

%ssembl#A7ine+andling>ote 1:1;>ote 2 : 4

/older emperature>ote 1: 1;>ote 2 : $

5%O


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the areto Diagram. 9f the solution does not improve the number of defects@ theteam will implement the problemAsolving process all over again.

SOME 9UESTIONS FOR ,OUR CONSIDERATION

1.


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LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL

LLLLLLLL

DIPLOMA IN BUSINESS LEADERSHIP

MODULE 8

PART *

Co$o%%(

-arefull# prepared specific objectives@ programs@ schedules@ and budgets help a

manager plan the accomplishment of that work most important to the success ofthe unit.


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hese four activities of controlling , developing performance standards@measuring performance@ evaluating performance@ and correcting performance ,are covered in more detail on the following pages.

17 THE NEED FOR CONTROL

+aving determined our course of action or plan@ we must ensure to keep it.


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has been delegated. One has a read# tool for monitoring. he process of control islike driving a car , each deviation needs corrective measures. isual presentation of facts in forms such as graphs@charts@ etc.@ also assist interpretation.

Co&! o .! V('% F!4 9n an# elements to be controlled@ a small functionin terms of number of elements alwa#s accounts for a large fraction in terms of effects. One@therefore@ needs to separate the vital few and control them and then forget the rest. /elect the

ke# factors and concentrate on them. Do not complicate matters b# raising too man# figures.

A&&o/'#(%() '= Co$o%%'#(%(): he greater potential for control tends to e&ist at thepoint where the action takes place. 9t is often the supervisors in manufacturing or sales whousuall# spend most of the mone#@ produce most of the goods and manage most of the people.-ontrol the supervisors. +owever@ the# can onl# be held accountable if:

he# know what the# are e&pected to achieveK

he# know what the# are actuall# achievingK and

9t is within their personal control to regulate which ishappening.

he# know what the# are e&pected to achieveK

he# know what the# are actuall# achievingK and

9t is within their personal control to regulate which ishappening.

?2


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37 SETTING STANDARDS

or a person to obtain consistentl# e&cellent results@ he must know the differencebetween good work and poor work. his distinction should be made from carefulstud# from what can be reasonabl# achieved. /tandards are #ardsticks. heoverall #ard stick is the plan itself split into the component objectives. /tandardsmust be fi&ed to ensure the objectives are objectives are obtained. One must bearthe following aspects in mind:

/tandards must be realisticK the# onl# service as an incentive for improvement if

the# are attainable and seen to be attainable. ast achievements should beanal#sed and areas for improvement. -an standards be increasedM Does theemplo#ee have the necessar# resources to reach this standardM

/tandards should be fle&ibleK just as plans need to be fle&ible to allow forchanges in circumstances so should be the standards. he standards need revisingever# time the plan changes. /ometimes #ou can build in fle&ible standards to#our plan.

/tandards must be measurableK one needs to ascertain whether or not theobjectives have been met. One also needs to know how far short one has failedfrom attaining the standards.

*7 PERFORMANCE MONITORING AND EVALUATION

eedback of information on actual results has to be compared with the standardsand budgets set previousl#. %ctual performance needs to be compared withstandards. )eports should be concise and understandable. Details in reportswould usuall# get progressivel# less the higher up the organisation one goes.

)eports should be prompt. Outdated reports ma# be too late to take correctiveaction.

>ariance anal#sis is the process of determining the e&tent of deviation from thestandards b# the actuals. /ome variables are tolerable whilst others ma# not be.he manager must know to what e&tent variances are allowed. %re the#significant or notM %re the# something he can deal with or do the# need to be

?3


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reported further up the organisationM 9t is necessar# therefore to determineacceptable levels of variance in advance so that the manager knows where hestands.8udgets e&press the plan in financial terms. or e&ample@ #ou ma# have plannedto build a new shop. Eou would have prepared a capital e&penditure budget. 9twill probabl# take several months and a schedule should have been preparedshowing the various tasks and timescale for them. 6ach month@ or possibl# morefre!uentl#@ comparisons will need to be done of the actual costs incurred againstthe budgeted costs. Eou ma# discover that #ou have overspent on la#ing thefloor. 9s the variance significant or notM 9f it is@ what corrective action should betaken. Eou can then possibl# prevent the same problems happening in the futureor else change the plan to allow for the changed circumstances. /uppose the shopis now running but e&penses are apparentl# over budgeted e&penses.


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7 THE CONTROL C,CLE

Once the s#stem of control is functioning@ it becomes selfAsustaining. hereshould be a control c#cle: !'"%!in the case of labour cost control the objectiveis to reduce an allowed labour cost for a given programme b# "R. he c#cle ofcontrol is:

Operative record on time sheets the details of that productionoutput and time takenK

he production output is evaluated in terms of standard timesand these are compared with actual times taken with the resultsbeing set out in a cost control reportK

6

?+


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MEASUREMENT FEEDBACK

ADJUSTMENT

?

MANAGER

PERFORMANCE

5easurement

%d

juste

me

nteedback

FEEDBACK TO VARIOUS RECIPIENTS

erformance8eing measured

eedback

/enior5anagers

erformingDepartment

erforming9ndividuals

/taff


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9n #our groups discuss how #ou would use the areto rinciple in the followingsituations:

DEBTORS SCHEDULE REJECT PRODUCTS

S

-56D 4$ ;;; Despatch 11R

Documents

8.Operational Planning and Decision Making