MGT1-Principles of Management

Quarter 1 – Module 6
Planning Techniques and Tools and their
Applications for Decision-Making

As we study and immerse ourselves in “Organization and Management” in the

process, it is necessary to apply appropiate planning techniques and tools in business
decision-making. The module is subjected to discuss Module 6 – Planning Techniques
and Tools and their Applications for Decision-Making.

After going through the module, you are expected to:

1. Apply apropriate planning techniques and tools in business decision-making.

As we go further, let us try to recall our lesson about the phases of economic
development and its impact to business environment.

• Planning is the process by which managers establish goals and define the
methods by which these goals are to be attained.
• The four major aspects in nature of planning are contribution to objectives,
primary among the manager’s tasks, pervasiveness, and efficiency of resulting
plans.
• The planning is the prime managerial function is proved by the fact that all other
functions such as organizing, staffing, leading, and controlling are designed to
support the accomplishment of the enterprise’s objectives.
• Four (4) types of plan are hierarchical plans, standing plans, single-use plans,
and contingency plans.

Brief Introduction

Seven Management and Planning Tools are a set of tools and techniques used to
help effectively plan and manage various types of business operations. These tools are
intended to guide you in the planning, analysis, and decision-making processes. These
tools were developed independently by different people for diverse purposes. However,
they were assembled as a set of methods in order to achieve efficiencies in the planning
and management of operations.

The Seven Management and Planning tools are: 1. The Affinity Diagram 2. The Tree
Diagram 3. The Interrelationship Diagram 4. The Matrix Diagram 5. Prioritization
Matrices 6. The Process Decision Program Chart (PDPC) 7. The Activity Network
Diagram

About The Seven Management and Planning Tools The seven management and
planning tools are collectively used by organizations to make better decisions and
implement new solutions effectively. When used as individually, these tools provide a
systematic and organized way of assessing ideas and making decisions. However, when
used in combination with each other, they provide an extremely effective way to
systematically solve complex issues an organization may face.
 The Seven Management and Planning Tools

Source: https://www.mindtools.com/pages/article/management-roles.htm

1. Affinity Diagram - an Affinity Diagram is a tool used for organizing a large amount of
disorganized information into groups based on their natural relationships and affinity
(similarity of characteristics). It is often used for solving problems with issues that seem
to be very complex and difficult to manage. An Affinity Diagram is a type of
brainstorming technique that allows you to generate, organize, and consolidate
information concerning complex processes, issues, or problems.

2. Tree Diagram - A Tree Diagram (also referred to as a systematic diagram) is a

systematic method to outline all the details needed to complete a given objective or
process. It is used to break down broad categories or complex processes into minute
details allowing you to examine the finer details. The Tree Diagram is an orderly
structure similar to an organization chart or family tree diagram. It helps in
understanding a process by graphically breaking down complex processes to smaller
levels of detail. 2/4 This technique encourages you to direct your thinking from
generalities to specifics.

3. An Interrelationship Diagram - an Interrelationship Diagram (also referred to as a

relations diagram) identifies and displays all the interrelated cause-and-effect
relationships among different concepts or ideas. Basically, it establishes links between
ideas or concepts, and shows that they can be logically linked with more than one other
idea or concept at a time. The process of creating an Interrelationship Diagram allows
you to systematically identify and analyze the cause-and-effect relationships that exist
among all critical issues. This process helps you understand the natural links between
different aspects of a complex issue so you can better develop an effective solution.
This technique encourages you to think in multiple directions (lateral thinking) rather
than just thinking linearly.

4. Matrix Diagram - A Matrix Diagram is a tool that shows the connection or correlation
between ideas or variables in a table format. It enables you to analyze relatively
complex issues by revealing interactions and dependencies between different elements
or variables. The Matrix Diagram graphically establishes relationship between two or
more sets of items in such a way as to provide logical connecting points between each
item. The diagram displays the strength of relationships using a grid of rows and
columns. A relationship is indicated at each intersection of rows and columns as either
present or absent. Thus, allowing you to identify the presence and strengths of
relationships between two or more items.

5. Prioritization Matrices - Prioritization Matrix is a tool that sorts and ranks various
options into an order of importance using weighted criteria. This technique helps identify
which problems are the most important to work on solving first. A Prioritization Matrix
graphically displays options and criteria in row and column format. Weights are
assigned to each criteria. The matrix allows you to identify an item’s relative importance
by deriving a numerical value for its priority. This allows you to select and prioritize
some options over others.

6. Process Decision Program Chart (PDPC) - a Process Decision Program Chart

(PDPC) is a tool for identifying and documenting the steps required to complete a
process. It is intended to help you prepare contingency plans by mapping out every
conceivable event that can occur when moving from a 3/4 problem to possible solutions.
This technique allows you to systematically identify what might go wrong with a plan.
Therefore, you can create appropriate contingency plans to limit risks.

7. Activity Network Diagram - activity Network Diagram (also referred to as an Arrow

Diagram) is a tool used to map activities and tasks for a project in sequential order.
Basically, it graphically depicts a project timeline. This tool displays interdependent
relationships between activities, tasks, and groups as they all impact a project. Boxes
and arrows are used to depict these activities and the links between them as well as
chart the sequential order of the entire process.

Relation between Planning and Decision-Making

Planning and decision-making are the most important managerial functions, and there are
many relations between them. Planning is thinking of doing. Decision-making is a part of
planning. Planning is the process of selecting a future course of action, where Decision-
making means selecting a course of action.

Planning and decision-making, organizing, leading and controlling are all interrelated.
Planning and decision making is the most important step of all managerial functions.

There are many relationships between decision-making and planning.

Planning managerial functions where managers are required to establish goals and state
the ways and means by which these goals are to be attained.
Therefore planning is taken as the foundation for future activities.
Or in simple terms; planning is deciding in advance what is to be done. Planning is thinking
of doing.

Management every time has to look for planning long-range and short-range future direction
by estimating and evaluating the future behavior of the relevant environment and by
determining the enterprise’s own desired role.
 Source: edu-article.blogspot.com

Plans have two basic components: goals and action statements. Goals represent an
end state the targets and results that managers hope to achieve. Action statements
represent how an organization goes ahead to attain its goals. Planning is a deliberate
and conscious work using which managers determine a future course of action for
attaining a specific goal. To a manager means planning is thinking about what is to be
done, who is going to do it, and how and when he will do it.

Planning also required thinking about past events and future opportunities and
impending threats. The planning process finds organizational strengths and
weaknesses.

Decision-making is the process of identifying a set of feasible alternatives and

choosing a course of action from them. Decision-making is a part of planning. Decision-
making is an intermediate-sized set of activities that begins with an identifying problem
and ends with choice making or decision giving. Management is constantly influencing
the organization’s activities and the decision-making process is central to doing it. In
the decision-making process, a manager identifies a specific situation and finds the
threats and opportunities that it offers.

Then the manager must find the available alternatives to tackle the situation. This is
where planning comes in. By planning; manager finds these alternatives by testing and
measuring their effectiveness. They identify the pros and cons of each alternative. After
that, the managers must use their decision-making skills for selecting one path of
action. Decision making is the core of planning. Unless a decision has been made, a
plan cannot be implemented in the field.

So we can say that planning and decision-making, both are interrelated. Decisions can
be made without planning but planning cannot be done without making decisions.
Planning can be defined as the process of selecting a future course of action. Decision-
making defined as the process of selecting a course of action from the alternatives.
They need to be accurate for the welfare of the organization.
ASSESSMENT

Activity 1: MULTIPLE CHOICE: Choose the letter of the best answer. Write your
answer in the space provided before each number.

____1. Which of the following process is used to identify a set of feasible alternatives
and choosing a course of action from them?
a. Plans
b. Decision-making
c. Affinity diagram
d. Controlling

____2. What tool will show the connection or correlation between ideas or variables in
a table format?
a. Interrelationship diagram
b. Matrix diagram
c. Prioritization Matrices
d. Tree diagram

____3. What tool is used to identify and document the steps required to complete a
process?
a. Matrix diagram
b. Prioritization matrices
c. Process decision program chart (PDPC)
d. Activity network diagram

____4. In which of the following will outline all the details needed to complete a given
objective or process?
a. Interrelationship diagram
b. Matrix diagram
c. Prioritization matrices
d. Tree diagram

____5. What tool is used to map activities and tasks for a project in sequential order.
Basically, it graphically depicts a project timeline?
a. Activitiy network diagram
b. Interrelationship diagram
c. Matrix diagram
d. Prioritization matrices

____6. Which among the following is a set of tools and techniques used to help
managers effectively to plan and manage various types of business operations?
a. Plan tools
b. Seven Management and Planning Tools
c. Eight Management and Planning Tools
d. All of the above

____7. Which of the following is not PART of Seven Management and Planning Tools?
a. Activity Diagram
b. Tree Diagram
c. Both A and B
d. None of the above
____8. Which of the following does not belong to the Seven Management and Planning
Tools that is used to guide an organization?
a. Planning
b. Analysis
c. Conclusion
d. None of the above

____9. Which of the following is referred to as a SYSTEMATIC DIAGRAM?

a. Interrelationship diagram
b. Tree diagram
c. Activity Network diagram
d. Matrix diagram

____10. Which of the following is often used for solving problems with issues that seem
to be very complex and difficult to manage?
a. Activity Network Diagram
b. Tree Diagram
c. Interrelationship Diagram
d. Affinity diagram

Reflective Question: As a student, how will you help the government fight the COVID –
19 Pandemic? Draw a diagram to show the steps/procedures on how you will
implement this. You may choose one from the seven (7) management and planning
tools to plot your answer.
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Prepared by:

Art Osores

Reference:

Organization and Management

Published by the Department of Education – Division of City Schools - Manila