GROUP 1 MERCURY-11
Lesson 2 : Planning
Techniques and Tools in
Business Decision-making
• PLANNING TOOLS AND TECHNIQUES
• Planning Tools and Techniques
Pertain to the different
methods for determining,
analyzing, and predicting
situations that will likely
• Different Planning Tools and Techniques
• DIFFERENT PLANNING TOOLS AND TECHNIQUES
1. Forecasting – pertains to the use of
scientific techniques to predict the
likelihood of certain events or factors
to happen in the future.
Forecasting techniques may be
quantitative or qualitative in method.
• DIFFERENT PLANNING TOOLDS AND TECHNIQUES
A. Quantitative Forecasting Techniques-
use statistical tools and analyses to
predict the future.
B. Qualitative Forecasting Techniques-
make use of opinions or perceptions
from experts for prediction purposes
• DIFFERENT PLANNING TOOLDS AND TECHNIQUES
2. Contingency Planning – is the process of identifying
alternative courses of action in the event that
unforeseen or uncontrollable events take place
Business Contingency Plans – prepared by managers in
relation to financial risks, market risks, production risks,
labor risks, information and communication risks, and
natural disaster risks. Managers sometimes refer to
these contingency plans as Plan A, Plan B, or even Plan
C as alternative course of action.
• DIFFERENT PLANNING TOOLS AND TECHNIQUES
3. Scenario Planning – involves predicting
potential alternative events that might happen.
- similar to contingency planning in preparing
for unforeseen events, however, it is more
detailed and extensive in visualizing the
alternative events that may take place.
• DIFFERENT PLANNING TOOLS AND TECHNIQUES
4. Benchmarking Technique – is
finding out what other organizations
are doing well and then incorporating
those best practices into the
operations of one’s organization to
improve its cost and effectiveness.
• DIFFERENT PLANNING TOOLS AND TECHNIQUES
5. Decision-making is defined as the
process by which different possible
solutions or alternatives are identified
and the most feasible solution or course
of action is finalized. It is an integral part
of planning.
• Factors Affecting Decision-Making
• FACTORS AFFECTING AND DECISION- MAKING
1. Timelines
The quality of decisions depends on how much time has
been devoted to making decisions. Most of the time
decision-makers have to take decisions in a limited time
frame as instructed by the management. Due to the time
limit, decision-makers are not able to collect all the
necessary information and not able to look for more
alternatives.
• FACTORS AFFECTING AND DECISION- MAKING
2. Value and beliefs of decision-makers
In addition, the quality of decisions also
depends upon the value and belief system of
the decision-makers. Anyone’s reaction to a
particular situation is more likely to depend on
the individual’s values, likes and dislikes,
thoughts, and beliefs.
• FACTORS AFFECTING AND DECISION- MAKING
3. Policies of organization
Decisions are affected by the policies of an organization.
Decisions taken have to be in the boundary or within the
limits of these policies. Decisions which violate policies
are not considered for implementation. Though there is a
scope to make changes in policies as per decision, most
of the time decisions should be at par with the policy
guidelines.
• Types of Decisions
(Structured or Programmed Decision)
It is 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.
Unstructured or Non-programmed Decision
It is applied to the resolution of problems that are new or
unusual, and for which information is complete. Such non-
programmed decisions are described to be unique,
nonrecurring and need custom-made decisions.
• Types of Decision-making Conditions
• TYPES OF DECISION-MAKING CONDITIONS
1. Certainty Conditions
These are ideal conditions in deciding
problems; these are situations in which a
manager can make precise decisions
because the results of all alternatives are
known.
• TYPES OF DECISION-MAKING CONDITIONS
2. Risk or Uncertainty Conditions
These are more common condition in deciding
problems. Risk or uncertainty conditions
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.
• The Decision-making Process according to Robbins and
Coulter
Step 1: Identify the Problem. The
problem may be defined as a
puzzling circumstance or a
discrepancy between an existing
and a desired condition.
• The Decision-making Process according to Robbins and
Coulter
Step 2: Identify the Decision
Criteria. These are important or
relevant to resolving the
identified problem.
• The Decision-making Process according to Robbins
and Coulter
Step 3: Allocate Weights to the
Criteria. This is done in order to give
the decision maker the correct
priority in making the decision.
• The Decision-making Process according to Robbins
and Coulter
Step 4: Develop Alternatives. This
step requires the decision maker
to list down possible alternatives
that could help resolve the
identified problem.
• The Decision-making Process according to Robbins
and Coulter
Step 5: Analyze the Alternatives.
Alternatives must be carefully
evaluated by the decision maker
using the criteria identified in Step
2.
• The Decision-making Process according to Robbins
and Coulter
Step 6: Select an Alternative. This is
the process of choosing the best
alternative or the one which has the
highest total points in Step 5.
• The Decision-making Process according to Robbins
and Coulter
Step 7: Implement the Chosen Alternative.
This step puts the decision into action.
Changes in the environment must be
observed and assessed, especially in cases
of long- term decisions, to see if the chosen
alternative is still the best one.
• The Decision-making Process according to Robbins
and Coulter
Step 8: Evaluate Decision Effectiveness. This is
the last step and involves the evaluation of the
outcome of the result of the decision to see if
the problem was resolved.
If the problem still exists, the manager has to
assess what went wrong and, if needed, repeat
a step or the whole process.
