Copyright © 2005 by South-Western, a division of Thomson Learning All rights reserved 1 Chapter 9 Planning and Decision Aids

Copyright © 2005 by South-Western, a division of Thomson LearningAll rights reserved

1

Chapter 9

Planning and

Decision Aids


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Learning Objectives

• Explain knowledge management and how it creates value for organizations.

• Describe the basic features of the Delphi technique, simulation, and scenario forecasting aids.

• Use Osborn’s creativity model to stimulate adaptive and innovative decisions.

• Apply three quality management decision and planning aids: benchmarking, the Deming cycle, and the balanced scorecard model.


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Fostering Knowledge Management

• Knowledge management (KM) involves recognizing, generating, documenting, distributing, and transferring between persons useful to improve organizational effectiveness.

• KM is generally viewed as consisting of three main components:– Explicit Knowledge

– Tacit Knowledge

– Enabling Technologies


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Knowledge Management Drivers

• Knowledge is becoming more valuable than physical or financial assets, or even natural resources.

• Organizations that are reevaluating knowledge strategies are finding shortcomings such as:– Productivity and opportunity loss

– Information overload

– Knowledge attrition

– Reinventing the wheel


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Knowledge Management Targets

• The application of KM has three natural targets:– an organization’s teams

– customers

– workforce


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Enabling Technology

• Technology provides the foundation for solutions that automate sharing of knowledge and fostering innovation.

• Choosing technologies involve addressing two critical issues:– technologies should deliver only relevant

information, but quickly from

every feasible source

– technologies need to comprise

a variety of devices, from telephone

to laptop computers


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Enabling Culture

• Culture is often the greatest barrier to successful implementation of KM.

• To help create a sense of trust and positive cultural response in the InTouch service at SchlumbergerSema the following implementation was used::– A knowledge champion was assigned as a focal point

– Extensive input from the field employees was sought

– A knowledge-sharing culture was developed


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Fostering Forecasts

• Forecasting involves projecting or estimating future events or conditions in an organization’s environment.

• Common forecasting pitfalls include:– listening to the media– assuming that things are

going to return the way they used to be

– hearsay– tunnel vision


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Delphi Technique

• The Delphi technique is a forecasting aid based on a consensus of a panel of experts.

• The heart of the Delphi technique is a series of questionnaires.

• The Delphi technique typically involves at least three phases.– A questionnaire is sent to a group of experts– A summary of the first phase is prepared– A summary of the second phase is prepared

• Three phases are recommended; however, experts tend to drop out after the third phase because of time constraints.


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Simulation

• A simulation is a representation of a real system.

• A simulation– imitates something real, but

– is not real itself, and

– can be altered by its users


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Examples of Business Simulation(adapted from Table 9.1)

• Budget Models– All levels of organization

• Treasury and Financial Models– Cash management– Income statements– Cash flow projections– Stock and commodity prices

• Marketing Models– Sales budgets– Pricing– Market share projections– Advertising and marketing plans

• Operations Models– Inventory costs– Material costs– Production costs

• Human Resources Models– Compensation– Optimum staffing levels– Measures of productivity

• Strategic Planning Models– Scenario planning– Political/economic forecasts– Business war-gaming


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Stages in the Creative Process(adapted from Figure 9.1)

5. Verification

1. Preparation

2. Concentration

3. Incubation

4. Illumination


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Osborn’s Creativity Model

• Osborn’s creativity model is a three-phase decision-making process that involves:– fact finding,

– idea finding,

– and solution finding

• Brainstorming is an unrestrained flow of ideas in a group with all critical judgments suspended.


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The Benchmarking Process(adapted from Figure 9.2)

1. Define the domain

Benchmarking

2. Identify the best performers

3. Collect and analyze to identify gaps

4. Set improvement goals

5. Develop and implement plans to close gaps

6. Evaluate Results

7. Repeat evaluations


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The Deming Cycle(adapted from Figure 9.3)

Start

RepeatPDCA

4. Act 1. Plan

3. Check 2. Do

RepeatPDCA

Improvement and learning over time


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Balanced Scorecard Model(adapted from Figure 9.4)

FinancialPerspective

Goals Measures

InternalPerspective

Goals Measures

CustomerPerspective

Goals Measures

Innovation/LearningPerspective

Goals Measures

Balance

Outcomes Activities

Documents

Copyright © 2005 by South-Western, a division of Thomson Learning All rights reserved 1 Chapter 9 Planning and Decision Aids