Management Consulting/management functions and behaviour
Define and discribe stretegic and operational planning. what are the essential steps involved in planning for an enterprise?
Explain with examples from the experience you have or you are aware of. Briefly discribe the organization you are refering to.
Operational plans should be prepared by the people who will be involved in implementation. There is often a need for significant cross-departmental dialogue as plans created by one part of the organisation inevitably have implications for other parts.
Operational plans should contain:
activities to be delivered
OTHER resource requirements
a process for monitoring progress.
There are many approaches to strategic planning but typically a three-step process may be used:
Situation - evaluate the current situation and how it came about.
Target - define goals and/or objectives (sometimes called ideal state)
Path - map a possible route to the goals/objectives
See - what is today's situation?
Think - define goals/objectives
Draw - map a route to achieving the goals/objectives
In other terms strategic planning can be as follows:
Four Important Operations Questions: Will you compete on
Two major quality dimensions include
High performance design:
Superior features, high durability, & excellent customer service
Product & service consistency:
Meets design specifications
Error free delivery
Focused on shorter time between order placement and delivery
Deliver product exactly when needed every time
Competing on Flexibility?
Company environment changes rapidly
Company must accommodate change by being flexible
Easily switch production from one item to another
Easily customize product/service to meet specific requirements of a customer
Ability to ramp production up and down to match market demands
The Need for Trade-offs
Decisions must emphasis priorities that support business strategy
Decisions often required trade offs
Decisions must focus on order qualifiers and order winners
Which priorities are “Order Qualifiers”?
e.g. Must have excellent quality since everyone expects it
Which priorities are “Order Winners”?
Translating to Production Requirements
Specific Operation requirements include two general categories
Structure – decisions related to the production process, such as characteristics of facilities used, selection of appropriate technology, and the flow of goods and services
Infrastructure – decisions related to planning and control systems of operations
Productivity is a measure of how efficiently inputs are converted to outputs
Productivity = output/input
Total Productivity Measure:
Total Productivity = (total output)/(total of all inputs)
FOR THIS BUSINESS PLAN,
-THINK OF THE FOLLOWING FACTORS
*AREAS THAT NEEDS IMPROVEMENT
*SKILL LEVEL OF THE EMPLOYEES
-FOR THE FOLLOWING AREAS IN THE OPERATION
Garments Production Process:
Stepwise garments manufacturing sequence on industrial basis is given below:
Design / Sketch
3.INVENTORY [ RAW MATERIALS/ FINISHED GOODS]
strategic planning Is a “disciplined effort to produce fundamental decisions and actions that shape and guide what an organization (or other entity) is, what it does, and why it does it” IS viewed strategic planning as the “process of determining what an organization intends to be in the future and how it will get there” . In these definitions, as well as those offered by other authors, strategic planning has been viewed as a process of developing and maintaining a strategic fit among the mission of the organization, the strengths and weaknesses of the organization, and opportunities and challenges in the organization's external environment.
Other themes implicit in various definitions suggest that strategic planning be understood as a process that (1) must be embraced and supported by top volunteer and managerial leaders of the organization; (2) seeks ownership at all organizational levels; (3) requires a commitment of resources, especially time; (4) incorporates analysis, thought, judgment, and creativity; and (5) must be tailored to fit an organization's planning culture.
BENEFITS AND CRITICISMS OF STRATEGIC PLANNING
strategic planning's helpfulness in
(1) providing a common purpose for future organizational development, (2) stimulating forward thinking and clarifying future organizational directions, (3) improving organizational performance, (4) building teamwork and expertise, (5) developing a framework for decision making and establishing priorities, (6) promoting responsiveness to changing community needs, (7) enhancing employee morale and commitment to the organization's mission, (8) directing fundraising efforts, (9) positioning the organization to act on its strengths and opportunities; and (10) providing a mechanism for educating stakeholders about the organization.
Although these benefits are impressive, critics harbor important reservations about strategic planning. They argue that the process is too time-consuming and that the world changes too rapidly, thereby making strategic plans obsolete by the time they are developed. In addition, they point out that such planning is too abstract and will not be beneficial in day-to-day management. Many social work organizations are in “crisis situations” wherein they must address survival issues immediately; there simply is not sufficient time to conduct strategic planning. Other critics stress that social work organizations frequently do not implement the strategies they develop in the planning process, often leading to cynicism and disillusionment about the value of planning.
DESIGNING THE PLANNING PROCESS
planning process as “planning to plan” and identified typical questions that require attention at the outset; for example—
• What is the level of commitment to the planning process?
• Who will lead the strategic planning effort?
• Who are the key stakeholders of the organization?
• Which of these key stakeholders will serve on the strategic planning committee?
• How will other stakeholders be involved in the planning process?
• What will be the specific steps and timetable for the planning process?
Leading the Strategic Planning Effort
A key decision in designing the planning process is to identify the desired membership of a strategic planning committee. The individual selected to chair the committee is an especially important leadership choice. This individual should be in contact with and be knowledgeable about the organization; be viewed internally and externally as an appropriate spokesperson; be able to assume a somewhat objective and facilitative role; possess strong planning, group processing, and negotiating skills; and have affluence and influence. Although the executive director or chief executive officer should also play an important role in planning, the chair of the strategic planning committee more frequently is selected from among volunteer leaders (for example, the president or vice president of the board of trustees, chair of a planning committee, or a key board member being groomed for a top leadership role). In addition to this choice of leadership, successful planning requires that the organization's volunteer leaders and top management team be enthusiastic in their support of and actively participate in the strategic planning process.
Involving Key Stakeholders of the Organization
Another important aspect of designing the planning process is to identify those individuals, organizations, coalitions, and so forth whose perceptions and support of the organization are important. These stakeholders' ownership of the strategic plan will be critical to its implementation. Stakeholders of social work organizations may include members of boards of trustees and advisory committees, management officials, staff members, volunteers, clients, former clients, funders, advocacy groups, other nonprofit (including social work) organizations, government leaders, political leaders, religious leaders, and members of the community. The strategic planning committee should be composed of these stakeholders, although it would not be practical to have all of them serve on the committee. Thus, a decision is required regarding who will be requested to serve, with special consideration given to representation from the board of trustees, advisory committees, and top management.
Other stakeholders not serving on the strategic planning committee can and should be involved in the planning process. Although each organization engaged in strategic planning may have its own mechanisms for such involvement, stakeholders can, for example, provide their perceptions about the organization's strengths and weaknesses, serve as members of a panel providing information regarding external environmental trends, help identify or clarify issues requiring strategic consideration, participate in strategy development sessions, or act as “devil's advocates” in reviewing potential strategies.
Developing Steps and a Timetable for the Planning Process
The specific steps of the strategic planning process should reflect the planning culture of the organization.
steps common to most definitions of strategic planning found in the literature:
• clarifying the organization's mission
• analyzing the organization's internal strengths and weaknesses (or perceptions thereof)
• assessing the opportunities and challenges presented by current and future external environmental trends
• identifying critical issues that require strategic consideration
• developing strategic alternatives
• selecting for implementation the most appropriate alternatives
• determining how the strategic plan is to be implemented, monitored, and updated.
Strategic planning involves values, beliefs, philosophy, purpose, meaning, and vision. Thus, it is both logical and necessary for the planning process to focus initially on clarification of an organization's mission. The aim of mission formulation is to determine the purpose of the organization and the values and philosophy that guide it.
Benefits and Obstacles
Clarifying its mission helps an organization have a shared set of values, define its business, determine the programs and services it wants to undertake, state its purpose clearly to all stakeholders, direct its human and financial resources, and suggest the kinds of knowledge and skills required to carry out the mission efficiently and effectively. Although the importance of mission clarification seems self-evident, the task may encounter resistance, possibly based on the notion that the organization's purpose is self-evident or the belief that the existing charter, bylaws, and mission statement are sufficient. Other resistance may stem from a concern that a discussion of values and philosophy will lead to arguments, controversy, and disagreement. Others resist this “philosophical discussion” because, in their view, it detracts from the true purpose of strategic planning, that is, developing action plans.
It is often stated that an organization can never be greater than the vision that guides it. A vision is a description of an organization's preferred future state. In short, it is a statement of what the organization wants to be in the future. A vision emanates from deeply held values, experiences, views of the future, intuition, and dreaming. Answers to the following questions represent components of a vision:
• What will the future business of the organization be?
• What will the board composition and structure be?
• How large will the organization be?
• What programs will be conducted by the organization?
• What staff will be required?
• What volunteers will be required?
• What internal management structures will be required?
• What will the funding mix for the organization be?
• What facilities will the organization have?
• How will success be measured?
The creation of a vision for an organization necessarily deals with values and philosophy and provides the framework within which mission clarification occurs. Pfeiffer et al. (1986), in their applied strategic planning approach, offered a use- ful “values audit” element to help identify the commonly held values of an organization.
Clarification of the Mission
On the basis of the consensus reached about the values and philosophy guiding the organization, strategic planning can focus on a clear formulation of the mission. A series of questions—chosen from the following list—may be used to clarify thinking about the mission:
1. Why does the organization exist?
2. Who does, and who should, the organization serve?
3. What are the organization's most important programs and services?
4. What does the organization do best?
5. What does the organization do least well?
6. What makes the organization unique?
7. What is the organization most noted for in the community?
8. What would the community lose if the organization were to cease to exist?
Answers to these questions will provide the elements to be integrated into the statement of the organization's mission. However, it should be noted that development of this statement may represent one of the more formidable tasks in the strategic planning process. Reaching consensus on the specific language of the statement will require a tolerance of differences, a willingness to compromise, and patience. Among other things, a mission statement should be consistent with organizational values and philosophy, clear and understandable to all stakeholders, brief enough to be kept in mind and easily communicated, broad enough to allow flexibility but not so broad as to lose focus, and worded so as to serve as a motivational force and a guide to organizational decision making.
Although the aim in crafting the mission statement is to make it as succinct as possible, its length will vary among organizations. Clearly, nonprofit organizations of all kinds have moved away from mission statements exceeding one page. Such brevity often is accomplished by including a section on underpinning values and philosophy before or after the mission statement in the strategic plan. Whatever its length, the mission statement provides the reality grounding for the next step in strategic planning: assessing the organization's internal and external environments.
A frequently used tool in strategic planning is the SWOT analysis: an analysis of the internal strengths and weaknesses of the organization in relation to the opportunities and threats presented by its external environment. This step in strategic planning is important in helping position the organization to maximize its strengths and capitalize on its opportunities. A SWOT analysis will prepare an organization to respond effectively to its external environment before a crisis erupts.
Assessment of the internal environment of an organization should include attention to its resources (people, money, facilities, equipment, information, technology, and so on), present strategies, and performance (operational assessment). Any data that would help the strategic planning committee gain a comprehensive overview of the organization's strengths and weaknesses should be included in this analysis. Operational assessment is approached through an analysis of performance history or an analysis based on comparative performance. Social work organizations probably will have an extensive amount of data available regarding resources, less information available regarding current strategies, and even less data on organizational performance. In the absence of such information, the committee often must rely on self-assessment and perceptions of key stakeholders as to how well the organization is performing.
This step in the strategic planning process may involve extensive gathering of data from an organization's documents; door-to-door, mail, telephone, or shopping mall surveys; focus groups; individual interviews; and panels of experts. Information may be sought on issues such as the organization's image, program and services, governance, management, staff, volunteers, external communication, facilities, funding, and fundraising. Hard data, to the extent that they exist, should be used. However, qualitative data, especially the results of a perceptual analysis, will almost certainly represent an important element in the SWOT analysis.
External Environment Analysis
Often the external environment is not well known; however, what happens there directly affects the organization. A good strategic planning process will include information about outside forces likely to influence the future direction of the organization. Bryson (1988) and others have identified three major categories of information as important elements in any systematic approach to environmental scanning: forces and trends; clients, customers, or payers; and actual or potential competitors.
The key forces and trends in the external environment usually will be identified in four to six broad categories. Although economic, social–demographic, political, and technological categories appear in many environmental scans, volunteerism and philanthropic categories are especially important additional categories for social work organizations involved in strategic planning. The data for this analysis of forces and trends come from literature reviews, government documents, university-produced studies and reports, nonprofit and for-profit organizations' environmental scans, public hearings, key informants, panels of experts, and so forth. These forces and trends are analyzed in terms of the potential opportunities for and threats to the organization, and they represent critical considerations in charting the organization's future course.
A thorough SWOT analysis also requires focusing on clients, customers, or payers. These groups must be given attention as to their potential positive or negative impact on an organization's future. This aspect of the SWOT analysis will identify the needs of present and potential client groups that the organization may wish to serve in the future. Equally as important, funding sources, both public and private, must be analyzed in terms of the opportunities or threats they present for the organization's future.
A final element of the SWOT analysis is a competition analysis. Although some social work organizations do not perceive themselves as being in competition with other nonprofit organizations, virtually all compete on some level (for example, clientele, public visibility and acceptance, or funding). An analysis of competition helps shape the future competitive positioning of the organization in the markets it chooses to serve. The data required for this analysis will address such issues as with whom the organization is competing, the foci of the competition, and relative competitive strengths or weaknesses. More specifically, this analysis will focus attention on competitors' current market presence; production, distribution, and promotions; competitive differences; profitability; and image in the marketplace. The results of a SWOT analysis provide a solid base from which the strategic planning committee can identify issues to be stressed.
IDENTIFICATION OF STRATEGIC ISSUES
strategic issue as a “major change challenge—opportunities and problems that appear to demand an organizational response, so a successful balance can be maintained between the organization's internal and external environments” . A strategic issue may be a welcome trend, event, or development that presents an organization with an opportunity to build on its competency, or it may be an unwelcome trend, event, or development emanating from an external environmental threat or an internal shortcoming.
Determination of an Issue as Strategic
Although many issues generated by strategic planning are critical, not all are strategic. Criteria for determining whether an issue is strategic include whether it is (1) an issue that is likely to have an impact on how the organization carries out its mission, (2) one that must produce a response of organizational commitment of human and financial resources, and (3) one over which the organization may reasonably expect to have some influence.
guidelines on the information necessary for a thorough consideration of strategic issues. This information includes a description of the issue, a discussion of the factors that make the issue strategic, and an examination of the consequences of failure to address the issue. In addition, attention must be directed toward the developmental stage of the issue (that is, emerging, developing, maturing, or declining). Further, the analysis entails consideration of such questions as, How great will the impact likely be? What will be the focus of the impact? Who are the major actors, and what positions are they likely to take on the issue? What are the options for the organization to deal effectively with the issue?
Approaches to Issue Identification
identification of strategic issues: direct, goals, and “vision of success.”
Direct approach. In the direct approach, the strategic planning committee moves from a clarification of the mission and the SWOT analysis to an identification of strategic issues. Kearns (1992) presented an in-depth explanation of the way in which strategic issues can emerge from a SWOT analysis. This approach works well when there is no preexisting agreement on goals, no well-defined vision of success, and no hierarchical authority choosing to impose goals.
Goals approach. The goals approach is based on organizational objectives being agreed upon and in place. In addition to agreement on goals and objectives, there must be sufficient specificity to guide identification of issues and potential strategies. This approach then develops strategies for carrying out the mission of the organization. The approach works well in organizations with hierarchical authority that wishes to impose goals on the planning process. The approach does not work well when values are diverse, agendas are broad, and stakeholders are powerful.
“Vision of success” approach.
“Vision of success” approach. The “vision of success” approach is similar to the visioning activities associated with mission formulation. In this approach, the organization is requested to create a “best” picture of its future as it fulfills its mission and achieves success. Strategic issues are related to how the organization should move from the way it is now to how it would behave on the basis of its vision. This approach can be especially useful when drastic change is required or when it is difficult to identify strategic issues directly.
Whatever approach is used, strategic issues are politically and technically important in the strategic planning process. Political decision making focuses on issues, and strategic planning can have a positive impact on an organization by shaping the way issues are framed and resolved. If issues are carefully framed, future decision making is likely to be both politically acceptable and technically workable.
DEVELOPING AND SELECTING STRATEGIC ALTERNATIVES
Once strategic issues have been selected, the strategic planning committee often establishes work groups to develop goals and strategies to address them. These work groups may be strengthened by the addition of key stakeholders who have expertise in specific issue areas.
Strategy Development Process
five-part strategy development process in which members of the strategic planning committee or the work groups would address the following questions about each strategic issue:
1. What are the practical alternatives that might be pursued to address this strategic issue?
2. What are the barriers precluding the realization of these alternatives?
3. What major proposals could be pursued to achieve these alternatives?
4. What major action with existing staff must be undertaken to implement these proposals?
5. What specific action steps must be taken to implement the proposals?
Various approaches to strategy development encompass similar foci of critical thinking. For example, another approach entails (1) identifying the current strategy, (2) delineating problems with that strategy, (3) pinpointing the core of the strategy problem, (4) formulating alternative strategies, (5) evaluating these strategies, and (6) choosing a new strategy. Yet other approaches highlight identification of obstacles to implementation and steps or actions to be taken to overcome such obstacles.
Evaluation of Alternative Strategies
An especially critical aspect of developing strategies is the establishment of a clear and explicit set of criteria.The United Way approach includes a criteria selection checklist based on the following nine issues and questions:
1. Suitability: Is there a sustainable advantage?
2. Validity: Are the assumptions realistic?
3. Feasibility: Does the organization have the necessary skills, resources, and commitment?
4. Consistency: Is the strategy externally and internally consistent?
5. Vulnerability: What are the risks and contingencies?
6. Timing: When must the organization act, and when will it benefit?
7. Adaptability: Can the organization retain its flexibility?
8. Uniqueness: What makes this strategy distinctively different from others?
9. Usability: Can the organization readily implement the strategy?
Analysis of the alternatives through this screen of nine questions represents United Way's first attempt to narrow the number of strategies. The approach also suggests a second process whereby the remaining alternatives are examined more thoroughly in regard to the support they will require for implementation. This level of consideration focuses on organizational resources, structure, and systems.
IMPLEMENTATION OF THE STRATEGIC PLAN
After selection of strategies a first draft of the strategic plan is developed. Although there can be wide content variations, many strategic plans include the following sections: introduction and background; strategic planning process and participants; environmental analyses; mission, values, and philosophy; strategic goals and strategies; strategic plan implementation; and conclusion. This initial draft of the plan is reviewed and modified by the strategic planning committee until a consensus on its content is reached. Consideration of how the plan is to be implemented, monitored, and updated is a part of this deliberation.
The strategic planning committee submits its final version of the plan to the board of trustees (or executive committee if this committee reviews matters before their submittal to the full board). Because a number of the members of the board will have been participants in the planning process, the document's review and subsequent approval will benefit from firsthand knowledge of the thinking implicit in the selected strategic alternatives. At this point, much more in-depth attention is given to the implementation challenges regarding the organization's commitment, its allocation of resources, and the required structure and process for monitoring and updating the plan. A decision also is made as to who will assume responsibility for translating the strategic plan into an operational or tactical plan. In nonprofit organizations, this responsibility is increasingly being shared in a partnership arrangement between the organization's paid staff and the appropriate board committees. The design of the operational or tactical plan should include the activities and responsibilities for monitoring and updating the strategic plan, which should be done—at a minimum—on an annual basis.
STRATEGIC PLANNING PITFALLS: A FINAL NOTE
Experience with strategic planning in the 1980s and early 1990s has resulted in important lessons about why such planning may produce less than organizations have hoped for. The following are among the practices that have led to problems:
• delegating strategic planning to other professionals in the organization
• ignoring political considerations in designing and implementing the planning process
• failing to build ownership of the plan, especially among those responsible for implementing it
• failing to allocate sufficient time for a meaningful planning process
• tending to be overly optimistic regarding an organization's capacity
• failing to plan for contingencies
• failing to plan for a transition from strategic to operational planning
• allowing the plan to become outdated
• shelving the plan after completion.
For social work organizations attentive to avoiding these pitfalls, the strategic planning process provides a powerful mechanism for making critical choices regarding their future. It is a vehicle that can take organizations beyond merely forecasting their future to envisioning the future they want and creating the road map to get there.
) Strategic planning.
Formal "strategic planning," is a top-down, vision-driven process that is used to develop an organization's future value. "Planning . . . is anticipatory decision-making. It is the process of deciding . . . before action is required."
Strategic planning is a critical task of senior management. In fact, the job description of senior managers usually includes responsibilities for planning and goal setting.
14 basic, well-known effective management processes:
• Setting objectives: Deciding on the business in which the company or division should engage and on other fundamentals that shall guide and characterize the business, such as continuous growth. An objective is typically enduring and timeless.
• Planning strategy: Developing concepts, ideas, and plans for achieving objectives successfully and for meeting and beating competition. Strategic planning is part of the total planning process that includes management and operational planning.
• Establishing goals: Deciding on achievement targets shorter in time range or narrower in scope than the objectives, but designed as specific subobjectives in making operational plans for carrying out strategy.
• Developing a company philosophy: Establishing the beliefs, values, attitudes, and unwritten guidelines that add up to "the way we do things around here."
• Establishing policies: Deciding on plans of action to guide the performance of all major activities in carrying out strategy in accordance with company philosophy.
• Planning the organization structure: Developing the plan of organization; the "harness" that helps people pull together in performing activities in accordance with strategy, philosophy, and policies.
• Providing personnel: Recruiting, selecting, and developing people, including an adequate proportion of high-caliber talent, to fill the positions provided for in the organization plan.
• Establishing procedures: Determining and prescribing how all important and recurrent activities shall be carried out.
• Providing facilities: Providing the plant, equipment, and other physical facilities required to carry on the business.
• Providing capital: Making sure the business has the money and credit needed for physical facilities and working capital.
• Setting standards: Establishing measures of performance that will best enable the business to achieve its long-term objectives successfully.
• Establishing management programs and operational plans: Developing programs and plans governing activities and the use of resources which, when carried out in accordance with established strategy, policies, procedures, and standards, will enable people to achieve particular goals. These are phases of the total planning process that includes strategic planning.
• Providing control information: Supplying facts and figures to help people follow the strategy, policies, procedures, and programs; to keep alert to forces at work inside and outside the business; and to measure their own performance against established plans and standards.
• Activating people: Commanding and motivating people up and down the line to act in accordance with philosophy, policies, procedures, and standards in carrying out the plans of the company.
Strategic Planning,ARE two types of planning: intuitive-anticipatory planning and formal systemic planning. "The first, the intuitive-anticipatory approach, has several characteristics. Generally it is done in the brain of one person. It may or may not, but often does not, result in a written set of plans. It generally has a comparatively short time horizon and reaction time. It is based on experience, the 'gut' feel, the judgment, and the reflective thinking of a manager."
The second type, formal systemic strategic planning, is characterized by a set of procedures and processes. It involves participation by numerous resources and stakeholders, and it is research driven. It is documented and leaves evidence that can measure the plan's progress and effectiveness.
Strategic planning is a process of asking and answering questions about the organization. And it is a process of formalizing the answers to those questions such that they can be used as guiding principles for implementing future results. Strategic planning needs to answer three basic questions for an organization:
• Where are you going? Without a clear sense of direction, including a mission statement, clarity about the scope of operations, and a set of specific goals and objectives, an organization is adrift.
• What is the environment? In answering this question, the organization is forced to take a hard look at itself, its external environment, its competitors, and the threats and opportunities that these pose. Furthermore, the organization must measure the gap between its goals or objectives and its capacity to attain those goals or objectives.
• How do you get there? That is, what are the specific business models that can enable the organization to reach its goals, and how do the organization's resources need to be allocated to make these models work?
The strategic planning process is often thought of as almost a singular event. It happens, and then we forget about it for a while. This is far from realistic, of course, because the environment tends to change and organizations tend to change. In the past several years they have changed at a rapid pace. For this reason, some have suggested that strategic planning is no longer a valid process.
It is better to look at strategic planning as a cyclical and ongoing process, not a singular event. A strategic plan is something that should be continually reviewed and it should be dynamically modified to respond to current events, changing economies, and future trends. The founding principles of the initial plan may or may not be valid as time moves on. The point is that a strategic plan must be reviewed and used, and resources must be allocated for maintaining the strategic plan.
Facility management professionals are rarely involved directly in formal strategic business planning activities. They are called upon for decision support information and, of course, they are intimately involved with the execution and implementation of the strategic plan. While facility management professionals are rarely involved in the strategic planning process, it is, nevertheless, critical that they be aware of the plan and be prepared to implement it even if they do not directly influence it. You could in fact consider, at least partially, the job and responsibilities of a facility manager to be defined by the implementation of the organization's strategic plan.
EXAMPLE OF STRATEGIC PLANNING
The organization, I am familiar with is a
-a large manufacturer/ marketer of safety products
-the products are used as [personal protection safety] [ industrial safety]
-the products are distributed through the distributors as well as sold directly
-the products are sold to various industries like mining/fireservices/defence/
as well as to various manufacturing companies.
-the company employs about 235 people.
-the company has the following functional departments
THE COMPANY USES THE RATIONAL APPROACH.
in Decision Making
1. Define the problem
This is often where people struggle. They react to what they think the problem is. Instead, seek to understand more about why you think there's a problem.
Defining the problem: (with input from yourself and others)
Ask yourself and others, the following questions:
a. What can you see that causes you to think there's a problem?
b. Where is it happening?
c. How is it happening?
d. When is it happening?
e. With whom is it happening? (HINT: Don't jump to "Who is causing the problem?" When we're stressed, blaming is often one of our first reactions. To be an effective manager, you need to address issues more than people.)
f. Why is it happening?
g. Write down a five-sentence description of the problem in terms of "The following should be happening, but isn't ..." or "The following is happening and should be: ..." As much as possible, be specific in your description, including what is happening, where, how, with whom and why. (It may be helpful at this point to use a variety of research methods.
Defining complex problems:
a. If the problem still seems overwhelming, break it down by repeating steps a-f until you have descriptions of several related problems.
Verifying your understanding of the problems:
a. It helps a great deal to verify your problem analysis for conferring with a peer or someone else.
Prioritize the problems:
a. If you discover that you are looking at several related problems, then prioritize which ones you should address first.
b. Note the difference between "important" and "urgent" problems. Often, what we consider to be important problems to consider are really just urgent problems. Important problems deserve more attention. For example, if you're continually answering "urgent" phone calls, then you've probably got a more "important" problem and that's to design a system that screens and prioritizes your phone calls.
Understand your role in the problem:
a. Your role in the problem can greatly influence how you perceive the role of others. For example, if you're very stressed out, it'll probably look like others are, too, or, you may resort too quickly to blaming and reprimanding others. Or, you are feel very guilty about your role in the problem, you may ignore the accountabilities of others.
2. Look at potential causes for the problem
a. It's amazing how much you don't know about what you don't know. Therefore, in this phase, it's critical to get input from other people who notice the problem and who are effected by it.
b. It's often useful to collect input from other individuals one at a time (at least at first). Otherwise, people tend to be inhibited about offering their impressions of the real causes of problems.
c. Write down what your opinions and what you've heard from others.
d. Regarding what you think might be performance problems associated with an employee, it's often useful to seek advice from a peer or your supervisor in order to verify your impression of the problem.
e.Write down a description of the cause of the problem and in terms of what is happening, where, when, how, with whom and why.
3.Define the Goal or Objective
In a sense, every problem is a situation that prevents us from achieving previously determined goals. If a personal goal is to lead a pleasant and meaningful life, then any situation that would prevent it is viewed as a problem. Similarly, in a business situation, if a company objective is to operate profitably, then problems are those occurrences which prevent the company from achieving its previously defined profit objective. But an objective need not be a grand, overall goal of a business or an individual. It may be quite narrow and specific. "I want to pay off the loan on my car by May," or "The plant must produce 300 golf carts in the next two weeks," are more limited objectives. Thus, defining the objective is the act of exactly describing the task or goal.
4. Identify alternatives for approaches to resolve the problem
a. At this point, it's useful to keep others involved (unless you're facing a personal and/or employee performance problem). Brainstorm for solutions to the problem. Very simply put, brainstorming is collecting as many ideas as possible, then screening them to find the best idea. It's critical when collecting the ideas to not pass any judgment on the ideas -- just write them down as you hear them.
5. Select an approach to resolve the problem
When selecting the best approach, consider:
a. Which approach is the most likely to solve the problem for the long term?
b. Which approach is the most realistic to accomplish for now? Do you have the resources? Are they affordable? Do you have enough time to implement the approach?
c. What is the extent of risk associated with each alternative?
6. Plan the implementation of the best alternative (this is your action plan)
a. Carefully consider "What will the situation look like when the problem is solved?"
b. What steps should be taken to implement the best alternative to solving the problem? What systems or processes should be changed in your organization, for example, a new policy or procedure? Don't resort to solutions where someone is "just going to try harder".
c. How will you know if the steps are being followed or not? (these are your indicators of the success of your plan)
d. What resources will you need in terms of people, money and facilities?
e. How much time will you need to implement the solution? Write a schedule that includes the start and stop times, and when you expect to see certain indicators of success.
f. Who will primarily be responsible for ensuring implementation of the plan?
g. Write down the answers to the above questions and consider this as your action plan.
h. Communicate the plan to those who will involved in implementing it and, at least, to your immediate supervisor.
(An important aspect of this step in the problem-solving process is continually observation and feedback.)
7. Monitor implementation of the plan
Monitor the indicators of success:
a. Are you seeing what you would expect from the indicators?
b. Will the plan be done according to schedule?
c. If the plan is not being followed as expected, then consider: Was the plan realistic? Are there sufficient resources to accomplish the plan on schedule? Should more priority be placed on various aspects of the plan? Should the plan be changed?
8. Verify if the problem has been resolved or not
One of the best ways to verify if a problem has been solved or not is to resume normal operations in the organization. Still, you should consider:
a. What changes should be made to avoid this type of problem in the future? Consider changes to policies and procedures, training, etc.
b. Lastly, consider "What did you learn from this problem solving?" Consider new knowledge, understanding and/or skills.
c. Consider writing a brief memo that highlights the success of the problem solving effort, and what you learned as a result. Share it with your supervisor, peers and subordinates
FOR STRATEGIC DECISIONS, THE APPROACH IS AS FOLLOWS:
THE COMPANY ANALYSES THE FOLLOWING DATABASE
AND APPLYS THE PROBELM SOLVING/ DECISION
MAKING APPROACH / FINALIZES THE PLAN.
-apply the pestel analysis with respect TO ITS BUSINESS
1.Political (incl. Legal)
-Environmental regulations and protection
[what are the government regualtions/ protection laws that must be observed ]
what tax hinder the business and what taxes incentives are available]
-International trade regulations and restrictions
[ does the government encourage exports / with high tariffs on imports]
-Contract enforcement law/Consumer protection
[does the government enforce on consumer protection ]
[ is the government encouraging skilled immigrants with temp. permits]
-Government organization / attitude
[ does the government have a very positive attitude towards this industry]
[ are there regulation for limiting competition]
[ politically , does the government have a very stable government ]
[ has the government adopted some of the modern safety regulations]
[ what is the economic growth rate / what are the reasons ]
-Interest rates & monetary policies
[ are the interest rates under control / is there a sound monetary policies]
[is government spending is significant and is it under control ]
[what is the employment / unemployment policies of the government ]
[ has the taxation encouraged the industry ]
[ is there well managed exchange controls and is it helping the industry]
[ is the inflation well under control ]
-Stage of the business cycle
[ is your industry is on the growth pattern]
[ is the consumer confidence is high/ strong and if not, why ]
[is there balanced income distribution policy ]
-Demographics, Population growth rates, Age distribution
[ what is population growth and why ]
-Labor / social mobility
[ what are the labor policies and is there labor mobility]
[ are there significant lifestyle changes taking place--more modernization/ why ]
-Work/career and leisure attitudes
[ are the population career minded and are seeking better lifestyle]
[ what are the education policies / is it successful ]
[are the people becoming fashion conscious ]
-Health consciousness & welfare, feelings on safety
[ are the people becoming health consciousness]
[ is the living conditions improving fast and spreading rapidly]
Government research spending
[is the government spending on research and development]
Industry focus on technological effort
[are the industries focused on using improved technology]
New inventions and development
[ are new inventions being encouraged for developments]
Rate of technology transfer
[ is the rate of technology transfer is speeding up ]
(Changes in) Information Technology
[ is the information technology rapidly moving and is there government support]
(Changes in) Internet
[ is the internet usage rapidly increasing and why]
(Changes in) Mobile Technology
[is the Mobile technology rapidly developing and is there government support]
Areas for opportunities and threats
* Markets [ what is the market situation, which is forcing the change requirements
*Customers [ how can service the customer -internal / external -better .
* Industry [ is the industry trend ]
* Competition [ is it the competitive situation
*Factors of business [ causing the change]
* Technology [ is it technology change ]
CONDUCT A ''SWOT'' ANALYSIS OF THE COMPANY'S RESOURCES.
Areas for strengths, weaknesses, and barriers to success
*Culture [ is the working culture change ]
* Organization [ is the organization demanding change ]
* Systems [ is it the systems change ]
* Management practices [ change in managemement process]
OTHER KEY DIMENSIONS
*Cost efficiency[ is it for cost efficiency ]
* Financial performance [ is it for financial performance improvement ]
* Quality [ is it for quality performance improvement
*Service [ is it for service performance improvement
*Technology[ is it for technology performance improvement
* Market segments [ is it for sales performance improvement
* Innovation[ is it for performance improvement
*new products[ is it for new product performance improvement
*Asset condition[ is it for financial performance improvement
*productivity[ is it for financial performance improvement
NOW THE CO. KNOWS WHERE IT STANDS.
FROM THE ABOVE , DETERMINE THE CORE ISSUES
WHICH NEEDS TO SOLVED WITH YOUR INVESTMENT.
FROM THE ABOVE CORE ISSUES , DETERMINE YOUR
CORE ISSUES WERE
-change the organization structure to a matrix format,
to enable the product managers to concentrate on
product development/ planning/ product marketing.
-change the distribution systems to introduce
more channels to widen the market coverage.
[ to stay close to the customers and provide extended service]
Your CORE PURPOSE
[ to bring maximum satisfaction to the customers]
Your CORE OBJECTIVES
[to extend the market coverage and gain sales ]
Your Core markets;
[defence -major customers like mines-medium industries]
Your CORE strategic thrusts.
[ productline extension - extended market coverage-channel exploitation]
The arena of products, services, customers, technologies, distribution methods, and geography in which you'll compete to get results.
WHERE DOES THE CO. WANTS TO GO
THE COMPANY ARRIVES AT THE FOLLOWING
DECISIONS AT THE END OF THE SESSIONS:
[280 million dollars--maintain a growth rate of 20% over 3 successive years.]
2.GROSS PROFIT BUDGET.
[ aim for 35% of sales]
3.NET PROFIT BUDGET.
[aim for 10% of sales ]
4.SALES TOTAL FORECAST.
5.SALES BY PRODUCTS.
6.OPERATIONAL EXPENSES BUDGET.
[22% constant for next 3 years ]
7.FIXED EXPENSES BUDGET.
[13 % constant for next 3 years]
[over the next 3 years---3% annually]
[over the next 3 years -----5%]
10. RETURN ON INVESTMENT.
[constant 6% over the next 3 years]
PLANS ARE MADE DURING [SEPT/ OCT/NOV]
IMPLEMENTATION --FINANCIAL YEAR [ JAN - DEC]
-quarterly audit of the programs/ plans/targets.
-monthly reviews of the plans/ targets.
INFORMATION USED IN MARKETING DEPARTMENT
-market potential / size
-geographical spread of the market
-promotional spending analysis
INFORMATION USED IN SALES DEPARTMENT
-distributors sales analysis
INFORMATION USED IN MANUFACTURING DEPARTMENT
-production cost analysis
-R&D cost analysis
-inventory cost analysis
-transport cost analysis
-warehousing cost analysis
INFORMATION USED IN FINANCE DEPARTMENT
-profit / analysis
-product cost analysis
-break even analysis
INFORMATION USED IN HR DEPARTMENT
1.ABSENTEEISM PER EMPLOYEES [DAYS]
2.AVERAGE RECRUITMENT TIME [DAYS]
3.EMPLOYEE TURNOVER [ % ]
4.EMPLOYEE SATISFACTION [ LEVELS ]
5.AVERAGE EMPLOYEE TENURE [ YEARS]
6.INDUCTION TRAINING [ % OF NEW EMPLOYEES]
7. TRAINING WORKSHOP [ % ] CONDUCTED/PLANNED
8. TRAINING AT EXTERNAL COURSES [ %] ACTUAL / PLANNED
9.PERFORMANCE APPRAISALS [ NOS.] AGAINST TOTAL EMPLOYEES.
INFORMATION USED IN QA/OHS DEPARTMENT
-production rejects analysis
-customer rejects analysis
-rejection cost analysis
-customer complaints analysis