Bm 1.6 Organizational Planning Tools
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Bm 1.6 Organizational Planning Tools



IB Business and Management (Standard Level)

IB Business and Management (Standard Level)
All material taken from the IB Business and Management Textbook:
"Business and Management", Paul Hoang, IBID Press, Victoria, 2007



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Bm 1.6 Organizational Planning Tools Bm 1.6 Organizational Planning Tools Presentation Transcript

  • IB Business and Management Unit 1.6 Organizational Planning Tools Pg. 95-102
    • The rich man plans for tomorrow, the poor man for today.
      • ~ Chinese proverb
    What is meant by this quote? Image taken from:
  • 1. An overview
    • What is at the heart of business and management?
      • Decision-making.
    • What does decision-making involve?
      • Making choices between competing alternative.
        • Make the right decision = business will thrive.
        • Make the wrong decision = may fail.
    • There are three levels of decision-making in an organization:
      • Operational decisions : routine, day-to-day, junior management.
        • Deal with workers, customers
      • Tactical decisions : regular, short-term, middle management.
        • Deal with pricing strategies, hiring of staff.
      • Strategic decisions : high-level, long term, senior management.
        • Sets overall direction of the firm, new markets to enter, location of business, staff salaries etc. …
  • 2a. Business Plans
    • What is a business plan ?
      • A report explaining how a new business will achieve its aims and objectives.
        • Do you remember the difference between AIMS and OBJECTIVES?
    • The business plan is a planning tool.
      • Requires you to plan the marketing, financial, and human resources of a business.
    • What is the main aim of a business plan?
      • To gain financial backing from banks or venture capitalists (lenders).
    • Why would financiers want to see your business plan?
      • It shows that you have thoroughly researched the business opportunity and provided reasons to support the venture.
      • Will help lenders judge the success rate and ability to repay loans.
      • Will help them see the cash flow of the business.
      • Will allow them to see how the working capital is being managed.
      • Will allow investors to assess the risks and opportunities of the venture.
  • 2b. Business Plans
    • There are many ways to write a business plan, a typical one will include the following (see pg. 97):
      • The Business
      • The product
      • The market
      • The finance
      • The personnel
      • The marketing.
    • Also, business plans SHOULD have a section devoted to a SWOT analysis .
    • It MUST also contain a contingency plan.
      • This will outline what the entrepreneur will do in case something goes wrong with the business.
    • A business plan should be no more than 5-6 pages in length.
    • An executive summary should be included at the beginning of the plan.
      • This will highlight the main information in the report, key points, and conclusions.
        • An overview of the business.
  • 3a. SWOT Analysis
    • What does a SWOT Analysis represent ?
      • Strength-Weakness-Opportunities-Threats
    • What does it assess ?
      • The current and future situation of a product, brand, company, proposal or decision.
      • It assesses both internal and external factors (see pg. 98).
        • See table 1.6a pg.100
    • How can a SWOT analysis be an extremely useful tool for investigating all sorts of business situations?
      • It can provide a good framework for :
        • Evaluating business proposals
        • Assessing opportunities
        • Strategic planning
        • Competitor analysis
        • Reviewing strategy
        • Risk assessment (see pg. 99)
  • 3b. Advantages and Limitations of
    • Advantages :
      • Simple, quick and easy to use.
      • Used for a wide range of decisions.
      • Determines an organization’s position in the marketplace.
      • Encourages foresight and proactive thinking.
      • Helps reduce risk of decision making.
      • Very objective and logical.
    • Limitations:
      • some argue that it is very simplistic and does not provide detailed analysis.
      • Model is static, whereas the market is not.
      • Is ONLY useful if decision-makers are willing to act upon the weaknesses.
      • It is not used by itself…will be used with other strategic tools, such as PEST.
  • 4a. Decision-making Frameworks
    • Remember ALL businesses have to make decisions in order to achieve their objectives .
    • They will decides on :
      • What to produce?
      • How to produce it?
      • Whom to produce it for?
    • A decision-making framework is need to answer these many questions .
      • SO, what is a decision-making framework ?
        • It is a systematic process of dealing with business problems, concerns, or issues in order to make the best decision.
  • 4b. Decision-making Frameworks
    • A decision-making model will have the following seven steps:
      • Identify the problem.
      • Gather data and information.
      • Analyze the data to produce options.
      • Assess the consequences of each options (costs).
      • Select the best option.
      • Communicate this decision to staff.
      • Review and evaluate outcome; lessons learnt.
    • Very IDEAL , yes?
      • I dentify the problem.
      • D efine the problem.
      • E xplore the possible solutions.
      • A ction to tackle the problem.
      • L ook back to review the progress and level of success.
  • 4c. Decision-making Frameworks
    • There are several models or frameworks that you can use to limit the risk involved in decision-making.
    • Here are a list of commonly used ones (see pg. 101-102.)
      • Cost Benefit Analysis (CBA).
      • Six Thinking Hats.
      • Forced Field Analysis.
      • Pareto Analysis.
      • The 5 Why’s.