Planning: Planning

Techniques and Tools and

their Application and
Decision-making
 For effective planning in today’s dynamic
environments, different techniques and tools must
be used such as forecasting, contingency planning,
scenario planning, benchmarking and participatory
planning.
 Forecasting according to Schermerhorn (2008) is an
attempt to predict what may happen in the future .All
planning types, without exception, make use of
forecasting. Business periodicals publish forecasts
such as employment and unemployment rates, increase
or decrease of interest rates, stock market data,
GNP/GDP data, and others. Forecast used either be
quantitative or qualitative.
 Opinions of prominent economist are used in qualitative
forecast while mathematical calculations and statistical
analyses of surveys /researchers are used in quantitative
forecast.

These, however, are just aids to planning and must be

treated with cautions. As the name implies, forecast are
predictions and may be inaccurate, at times, due to errors
of human judgment.
 Contingency factors may offer alternatives course
of action when the unexpected happen or when
things go wrong. Contingency plan must be
prepared by managers, ready for implementation
when things do not turn out as they should be.
Contingency factors called “trigger points” indicate
when the prepared alternative plan should be
implemented.
 Trigger point-change in an attribute, condition,
factor, parameter, or value that represents crossing
a threshold and actuates or initiates a mechanism
or reaction that may lead to radically different
states of affairs.
 Meanwhile, planning for future states of affairs is a long-term
version of contingency planning and is also known as scenario
planning. Several future states of affairs must be identified and
alternative plans must be prepared to meet the changes and
challenges in the future. This is a big help for organization because
it allows them to plan ahead and make necessary adjustments in
their strategies and operations. Some examples of changes or
challenges that may arise in the future scenario are environmental
pollution, human rights violations, climate and weather changes,
earthquake damages to communities, and others.
Figure 3.4 Some organization use a Gantt chart to properly schedule production process and
allocate resources.
 Benchmarking, another planning technique that
generally involves external comparison of a
company’s practices and technologies with those
of other companies. Its main purpose is to find out
what other people and organization as well and
then how to incorporate these practices into the
company’s operations.
• A common benchmarking technique is to search for
best practices used by other organizations that enable
them to achieve superior performance. This is also
known as external benchmarking.
• Internal benchmarking is also practiced by some
organizations when they encourage all their employees
working in their different work of units to learn and
improve by sharing one another’s best practices.
 The final step, continue to monitor and repeat the entire
benchmarking process on regular basis. This will insure that the
company stays at the foremost and does not lag behind the
competition.

Participatory planning which refers to planning process that

includes the people who will be affected by the plans and those
who will be asked to implement them in all planning steps.
Creativity, increased acceptance and understating of plans, and
commitment to the success of plans are the positive results of
this planning technique.
 All managers and the workers /employees in organizations make
decision or make choices that affect their jobs and the organization
they work for. This lesson’s focus on how they make decision by
going through eight steps in decision making process.

Decision–making- is a process which begins with a problem

identification and ends with the evaluation of implemented solution.
 The Decision-making Process according to Robbins and Coulter
Step1: Identify the Problem.
The problem may be defined as a puzzling circumstances or a
discrepancy between an existing and desired condition.

Step 2: Identify the Decision Criteria.

These are important or relevant to resolving the identified problem.

Step 3: Allocate Weighs to the Criteria.

This is done in order to give the decision maker the correct priority
in making the decision.
Step 4: Develop Alternatives.
This step requires the decision to list down possible alternatives that
could help resolve the identified problem.

Step 5: Analyze the Alternatives.

Alternatives must be carefully evaluated by the decision maker
using the criteria identified in Step 2.

Step 6: Select an Alternatives.

This is the process of choosing the best alternatives or the one which
has the highest total points in Step 5.
Step 7: Implement the Chosen Alternative.
This step puts the decision into action. Changes in the
environment must be observed and assessed, especially in
case

Step 8: Evaluate Decision Effectiveness.

This is the last step and involves the evaluation of the outcome or
result of the decision to see if the problem still exists, the manager
has to assess what went wrong, if needed, repeat a step or the whole
process.
 A decision is a choice among possible alternative actions. Like
planning decision- making is a challenge and requires careful
consideration for both types of decisions; namely:

• Structured or programmed decision- a decision that is repetitive and

can be handled using a routine approach.
Such repetitive decision applies to resolving structured problems
which are straightforward, familiar, and easily defined. For example, a
restaurant customer complains about the dirty utensils the waiter has
given him. This is not an unusual situation, and therefore, standardized
solutions to such a problem may be readily available.
• Unstructured or nonprogrammed decision- applied to the
resolution of the problem that are new or unusual, or which
information is incomplete.

Such nonprogrammed decisions are described to be unique,

nonrecurring and need customs-made decision. For example, a
hotel manager is asked to make decision regarding the building
of a new hotel branch in another city to meet the demands of
business there. This is an unstructured problem, and therefore
needs unstructured or nonprogrammed decision to resolve it.
The Decision-making condition are classified into
Certainty and Risk or uncertainty conditions. Let us
discuss each type of Decision-making conditions.

• Certainty conditions-ideal conditions in deciding

problems; these are situation in which a manager can
make precise decisions because the results of all
alternatives are known.
For example, bank interest are made to known to clients so it is easier for
business managers to decide on the problem of where to deposit their company’s
fund. The bank which offers the highest interest rate, therefore, is the obvious
choice of the manager when asked to make decision.

• Risk or uncertainty conditions- a common conditions in deciding a problems.

This condition compel the decision maker to do estimates regarding the possible
occurrence of certain outcomes that may affect his or her chosen solution to a
problem. Historical data from his or her own experiences and other secondary
information may be used as bases for decision to be made by the decision under
such risk conditions.
 For example, manager is asked to invest some of their
company funds in the money market offered by a financial
institution. Risk factors must be considered, because of the
uncertainty conditions involved, before making a decision-
whether to invest or not in the said money market.