SHS Grade 11: Organization and Management Quarter 1 - Module 6 Planning Techniques and Tools

SHS
GRADE
11
ORGANIZATION AND
MANAGEMENT
QUARTER 1 – MODULE 6
PLANNING TECHNIQUES AND
TOOLS
1
Objectives:
At the end of this module, you are expected to:
1. Apply appropriate planning techniques and tools in business
decision making.
Lesson Proper
PLANNING TOOLS AND TECHNIQUES
There are three categories of planning tools and techniques:
 Techniques for assessing the environment
 Techniques for allocating resources
 Contemporary planning
1. TECHNIQUES FOR ASSESSING THE ENVIRONMENT:

Many larger accounting firms have set-up external analysis
departments to study the wider environment in which they and their
client operate.
There techniques helps manager to do that:

1. Environmental Scanning
2. Forecasting
3. Benchmarking
1.Environmental Scanning: Managers use to screen large amount of

information to anticipate and interpret changes in the environment.
Analyzing what is the need of customers and the market survival
strategy of the competitors.
1.1 Competitive Intelligence: Process by which the
organization gather information about their competitors and get
answer to question. Who they are? What they are doing? How
will they affect us?
1.2 Global Scanning: World markets are complex and dynamic.
Managers must focus how he should update the business.
2. Forecasting: Predict the future events effectively.
2.1 Quantitative Forecasting: Set of mathematical rules to a
series of past data to predict outcomes.
2.2 Qualitative Forecasting: Uses judgement and opinions of
knowledgeable individuals to predict outcomes.
2
CPRF (Collaborative Planning, Forecasting and Replenishment)
Provide framework for the flow of information, goods and services
between retailers and manufacturers.
Effectiveness of forecasting
Helps the managers in decision making
Quantitative
 Time series analysis (Duration to complete)
 Regression models (Predicting a variable by assuming another
variable)
 Econometric models (Sales change due to taxation)
 Economic indicators (using factor to predict e.g GDP)
 Substitution Effect (DVD vs Pen Driver)
Qualitative
 Jury of option (recruiting)
 Sales Force Composition (Predicting next year sales)
 Customer Evaluation (Surveying Dealers)
3. Benchmarking: The search for the best practices among

competitors and non-competitors that lead to their superior
performance.
Steps in Benchmarking:
2. TECHNIQUES FOR ALLOCATING RESOURCES:

Managers must focus on the resource allocation before the execution
of a work.
Examples: Financial (equity, debts)
Human (skilled labors)
Physical (raw materials, equipment)
Intangible (brand names, reputation)
3
1. BUDGETING:
o Numerical plans for allocating resources to specific activities.
o Used to improve time, space and use of material resources.
Important of Budgeting:
Organizational Success
Effective budgeting system is a key to organizational
success.
Effective Budgeting System
Is a great way to successfully attain the business goals
objectives having been quantified and clearly stated.
Methods to improve budgeting:

 Collaborative and communicate
 Be flexible
 Goals should drive budgets- budgets should not
determine goals
 Use budgeting/planning software when appropriate
TYPES OF BUDGETS
Fixed or Static Budget – it refers to an estimate of pre-
determined incomes and expenditure, which once prepared
doesn’t change with the variations in the activity levels
achieved.
TYPES OF FIXED OR STATIC BUDGET
 Revenue Budget – it is forecast of company’s sales
revenues and expenditures, including capital related
expenditure. “Project Future Sale”
 Expense Budget – it is forecast all of the elements of a
business operating expense, such as salaries, rent,
depreciation, and others. List primary activities and
allocates dollar amount to each.
Flexible or Variable Budget – flexible budget is a financial plan

created for different activity level. It can be freely adjusted on
the basis of output produced. Takes into account the costs that
vary with volume.
TYPES OF FLEXIBLE OR VARIABLE BUDGET
 Cash Budget – is an estimate of the cash flow of an
individual or company over a specific period of time to
determine weather cash is being spent productively.
4
“Forecast cash on hand and how much will be needed.”
 Profit Budget – “combines revenue and expense budgets
of various units to determine each unit’s profit
contribution.”
2. SCHEDULING
-plans that allocate resources by detailing what activities have
to be done. The order in which they are to be completed who is to do
each and when they are to be completed.
2.1 PERT ANALYSIS
 A flow chart diagram that despict the sequence of
activities needed to complete a project and the time or
costs associated with each activity.
 To understand this one must know the following terms:
 Events: endpoints for completion
 Activities: time required for each activity
 Slack Time: time an individual activity can be
delayed.
 Critical Path: most time consuming sequence of
events.
STEPS IN PERT ANALYSIS:
1. Identify every significant activity that must be achieved
for a project to be completed.
2. Determine the order in which these events must be
completed.
3. Diagram the flow of activities from start to finish.
4. Compute a time estimate for completing each activity.
5. Determine a schedule for the start and finish dates of
each activity and for he entire project.
3. Break Even Analysis
Used to determine the point at which all fixed costs have been
recovered and profitability begins.
4. Linear Programming
Helps in selecting which is the most suitable or optimistic
method to find the solution.
DECISION MAKING – is a process which begins with problems and ends

with the evaluation of implemented solution.
5
8 STEPS OF DECISION MAKING PROCESS SUGGESTED BY ROBBIN AND
COULTER (2009)
1. Identify the problem
2. Identify the decision criteria
3. Allocate weights to the criteria
4. Develop alternative
5. Analyze the alternative
6. Select an alternative
7. Implement the chosen alternative
8. Evaluate decision effectiveness
TYPES OF DECISION MAKING

 STRUCTURED OR PROGRAMMED DECISION
Routine almost automatic process. Manager have made the decision
many times before there are rules or guidelines to follow.
 UNSTRUCTURED OR NON-PROGRAMMED DECISION
Unusual situations that have not been often address. No rules to
follow since the decision is new. These decision are made based on
information and a manager’s institution and judgement.
DECISION MAKING CONDITIONS

Certainty – a situation in which a manager can make an accurate decision
because of the outcome of every alternative choice in known.
Risk – a situation in which the manager is able to estimate the likelihood
(probability) of outcomes that result from the choice of particular
alternatives.,
Activity 1
Identify the three categories of planning tools and techniques and explain
each. Use extra sheet of paper if necessary.
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6
REFERENCES
https://www.slideshare.net/RArunKumarMEAMIE/planning-tools-and-
techniques-155425061?qid=4cac4dbf-2462-41bf-b383-
3bb73b0eab51&v=&b=&from_search=4
https://www.slideshare.net/SayedlhtshamAhmad/management-planning-
techniques-and-tools?qid=4cac4dbf-2462-41bf-b383-
3bb73b0eab51&v=&b=&from_search=1
https://www.slideshare.net/JamesBarylGarcelo1/planning-at-different-level-in-
the-firm?qid=cd4247d4-3096-4404-8017-27ed015aee7e&v=&b=&from_search=2
Checked by:
Robert Francisco Virginia Gulinao Roldan Liwanag Antonio Basco

Principal Principal Principal Principal
JPI Sta. Maria JPI Muzon JPI Plaridel JPI San Jose

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SHS

1. TECHNIQUES FOR ASSESSING THE ENVIRONMENT:

There techniques helps manager to do that:

1.Environmental Scanning: Managers use to screen large amount of

3. Benchmarking: The search for the best practices among

2. TECHNIQUES FOR ALLOCATING RESOURCES:

Methods to improve budgeting:

Flexible or Variable Budget – flexible budget is a financial plan

DECISION MAKING – is a process which begins with problems and ends

TYPES OF DECISION MAKING

DECISION MAKING CONDITIONS

Robert Francisco Virginia Gulinao Roldan Liwanag Antonio Basco

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