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Chapter 9: Using Planning and Decision Aids

Don Hellriegel. Susan E. Jackson. John W. Slocum, Jr. MANAGING: A COMPETENCY BASED APPROACH 11 th Edition. Chapter 9: Using Planning and Decision Aids. Prepared by Argie Butler Texas A&M University. Using Planning and Decisions Aids. Learning Goals.

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Chapter 9: Using Planning and Decision Aids

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  1. Don Hellriegel Susan E. Jackson John W. Slocum, Jr. MANAGING: A COMPETENCY BASED APPROACH 11th Edition Chapter 9: Using Planning and Decision Aids Prepared by Argie Butler Texas A&M University

  2. Using Planning and Decisions Aids • Learning Goals • Explain the essentials of knowledge managementand how it is used to create value for organizations • Describe the features and uses of the Delphi method, simulation, and scenario forecasting aids • Discuss the creative process and how to use Osborn’s creativity model • Explain and apply three quality improvement aids: benchmarking, the Deming cycle, and the Baldrige quality program Chapter 9: PowerPoint 9.1

  3. Using Knowledge Management • Recognizing, generating, documenting, distributing, and transferring among persons useful information, know-how, and expertise to improve organizational effectiveness • Main Components of Knowledge Management Enabling technologies Tacit knowledge Explicit knowledge Chapter 9: PowerPoint 9.2

  4. Consequences of Poor Knowledge Management Reinventing the wheel Knowledge attrition Information overload Productivity andopportunity loss Chapter 9: PowerPoint 9.3

  5. Knowledge Management Targets Teams Customers Workforce Chapter 9: PowerPoint 9.4

  6. Snapshot “The most valuable assets of a 20th-century company were its production equipment. The most valuable asset of a 21st-century institution, whether business or nonbusiness, will be its knowledge workers and their productivity. In the society into which we are moving very fast, knowledge is the key resource.” Peter Drucker (1909-2005), author of Management Challenges for the 21st Century and of many other pioneering books on management Chapter 9: PowerPoint 9.5

  7. Enabling Corporate Culture • Sense of trust is essential • Belief that sharing expertise will not be used against the individual • In Chapter 18, (Understanding Organizational Cultures and Cultural Diversity) and elsewhere, enabling cultures are explored in depth Chapter 9: PowerPoint 9.6

  8. Balanced Scorecard Model • Provides a process for an organization to gain deeper knowledge and understanding of its strategic decisions by considering the role of finances, customers, internal processes, and learning/growth • Provides a broad perspective in planning and decision making • Takes account of financial and nonfinancial measures Chapter 9: PowerPoint 9.7

  9. Balanced Scorecard Model Customer Perspective (outcomes) Financial Perspective (outcomes) Goals Measures Initiatives Goals Measures Initiatives Vision and Strategies Learning/Growth Perspective (activities) Internal Perspective (activities) Goals Measures Initiatives Goals Measures Initiatives Chapter 9: PowerPoint 9.8 (Adapted from Figure 9.1)

  10. Balanced Scorecard Model • Snapshot “We had an overemphasis on financial indicators, and we were struggling to report quality and cost-effectiveness data to the board of directors. So, we adopted a scorecard approach at the highest level of the organization to balance the financial indicators with quality measures and other indicators. We then drove it down to the department level, to the point where the scorecards become very targeted.” George G. Pepetti III, Executive Vice President and COO Silver Cross Hospital, Joliet, Illinois Chapter 9: PowerPoint 9.9

  11. Using Forecasting Aids • Projecting or estimating future events or conditions in an organization’s environment • Focuses on external and vital events/beyond the organization’s direct control • Extrapolation: projection of some trend or tendency from the past or present into the future • Numerous forecasting aids available Chapter 9: PowerPoint 9.10

  12. Forecasting Pitfalls Listening to themedia Hearsay Assuming thatthings are goingto return the waythey used to be Tunnel vision Chapter 9: PowerPoint 9.11

  13. Delphi Method • Based on a consensus of a panel of experts • Series of questionnaires • Typically involves three phases • Phase I: Questionnaire is sent to a group of experts • Phase II: Summary of the first phase is prepared with revised questionnaire • Phase III: Summary of the second phase is prepared with revised questionnaire • Three phases are typically recommended Chapter 9: PowerPoint 9.12

  14. Simulation • Representation of how a real system performs • Can be altered by users • Many types of business simulations, often computer/ software based, such as: • Treasury and Financial Models Cash management, Income statements, cash flow projections, Stock and commodity prices • Marketing Models Sales budgets, Pricing, Market share projections, and Advertising and market plans Chapter 9: PowerPoint 9.13

  15. Scenarios • Descriptive narratives that help people recognize and adapt to plausible changing and uncertain alternative futures • Enables management to ask numerous “what if questions, such as: • What if the competitor (or set of competitors) commits to a diversification of its product line (new products for existing and new customers) through a combination of current and new technologies? • What if the competitor launches a series of new products? • What if the competitor launches a sequence of extensions to its current product lines (with the specific aim of attracting new customers to the market)? Chapter 9: PowerPoint 9.14

  16. Scenarios • Considers combinations of uncertainties and questions in each scenario • Forces managers to evaluate preliminary plans against future possibilities “Scenarios are different from forecasts in that they provide a tool that helps us to explore the many complex business environments in which we work, the factors that drive changes, and development in those environments.” Jeron Van Der chief executive of the Shell Group Chapter 9: PowerPoint 9.15

  17. Using Creativity Aids: Creativity • Ability to visualize, generate, and implement new ideas or concepts or new associations between existing ideas or concepts that are novel and useful • Stages in the Creative Process 5. Verification 4. Illumination 3. Incubation 2. Concentration • Preparation Chapter 9: PowerPoint 9.16 (Adapted from Figure 9.2)

  18. Osborn's Creativity Model • Three-phase decision-making process that involves: • fact finding, • idea finding, and • solution finding hmm • Intended to stimulate freewheeling thinking, novel ideas, curiosity, and cooperation Chapter 9: PowerPoint 9.17

  19. Osborn's Creativity Model • Brainstorming: an unrestrained flow of ideas in a group or team with all critical judgments suspended 1. Criticism is ruled out 2. Freewheeling is welcomed Rules ofbrainstorming 4. Combination and improvement are sought 3. Quantity is wanted Chapter 9: PowerPoint 9.18

  20. Osborn's Creativity Model • Electronic Brainstorming • Makes use of personal computers that are networked to input and automatically disseminate ideas in real time to all team members, each of whom may be stimulated to generate additional ideas • Individuals may input ideas via the keyboard as they think of them • No identification of individual or team that generates each idea • May be better than face-to-face • Safer for lower-level employees Chapter 9: PowerPoint 9.19

  21. Using Quality Improvement Aids: Benchmarking • A systematic and continuous process of measuring and comparing an organization’s goods, services, and practices against industry leaders anywhere in the world to gain information that will help the organization improve performance • Can be expensive and time consuming • Helps managers and employees learn from others Chapter 9: PowerPoint 9.20

  22. Benchmarking • Stages/Process 3. Collect dataand analyze toidentify gaps • Define theDomain 2. Identifythe bestperformers 7. Repeatbenchmarkingsas needed 6. Evaluateresults 5. Develop andimplementplans toclose gaps 4. Setimprovementgoals Chapter 9: PowerPoint 9.21 (Adapted from Figure 9.3)

  23. Deming Cycle • Comprises four stages—plan, do, study, and act—that should be repeated over time to ensure continuous learning and improvements in a function, product, or process RepeatPDSA 1. Plan 4. Act 3. Study 2. Do Improvements and learning over time Chapter 9: PowerPoint 9.22 (Adapted from Figure 9.4)

  24. Baldrige Quality Program • Provides a systems perspective for managing an organization and its key processes to achieve the result of performance excellence • Malcolm Baldrige National Quality Award • Promotes excellence in organizational performance • Recognizes the quality and performance achievements of U.S. organizations • Publicizes successful performance strategies • Systems perspective Chapter 9: PowerPoint 9.23

  25. Baldrige Quality Program Organizational Profile: Environment, Relationships, and Challenges 2StrategicPlanning 5Human ResourceFocus 1Leadership 7Results 3Customer andMarket Focus 6ProcessManagement Measurement, Analysis, and Knowledge Management Source: Baldrige National Quality Program. Gaithersburg, MD: National Institute of Standards and Technology, 2006, 5. Chapter 9: PowerPoint 9.24 (Adapted from Figure 9.5)

  26. ISO 9000 • Set of five international standards that define the requirements for an effective quality management system • Standards published by the International Organization for Standardization (ISO), headquartered in Geneva, Switzerland • ISO certification is administered by accreditation and certification bodies within the country where the firm operates Chapter 9: PowerPoint 9.25

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