Making Management Decisions

FDA BUSINESS

ERIC AMANOR/RICARDO

Introduction This report will be looking at effective decision making in project management. The principles of planning and decision making will be discussed and identifying possible constraints and problems that hinders effective decision making. Different approaches and solutions that could be applied when making such management decisions will also be identified, taking into account the various levels at which different types of decisions are made. An extensive and secondary research was made to support the findings.

Findings: 1. The Principles of Business planning and Decision making Effective planning is required for any project to be a success. Effective planning as described by (Pettinger 2002, p. 59) is a process, the purpose of which is to arrive at and retain consistent clarity of direction. Analysis of the information, thinking it through, testing ideas or examining what is possible and what is not, is an effective way of planning. To begin with the Business planning, the business needs to identify the present Position, the particular Objectives, Action Program, Obstacles, Alternative Objectives, and Timeline, all this helps contribute to effective planning and to identify tasks and parts of the projects that needs to be prioritised. Once the objective has been identified, the internal environment and the external environment need to be analysed. Analysis of LiveShows internal and external environment; Strength: Company image/Good reputation More experience in the industry Market share 1

Making Management Decisions

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Weakness: Lack of employees Financial resources Lack of expertise in certain areas Operational capacity Opportunity: Opportunity to also delve into health and safety and legal compliance Develop new business in countries like Japan, Korea and China Threats: Competition PEST Analysis Political: Health and safety legislation Government funding Government trading agreements and standards Economic: Jobs to be created Long term prospects for the economy Inflation rate Interest rate Social: Language Culture Technology: Modern building equipment Modern communication technology, i.e. Internet, emails, etc. Acknowledging this internal and external environment, the strengths will be matched to the opportunities thats has been identified while finding ways to improve its weakness and to confront possible threats. Having determined the organisations position, the next stage will be to determine where the business is heading towards. The aim of the project

Making Management Decisions

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ERIC AMANOR/RICARDO

being to modify the purpose built bicycle racing track and arena to be more suitable for martial arts prior to the Olympic Games start date of 27 July 2012. The objectives are as follows; How to Comply with Health and Safety and legal compliance (whether to outsource to other providers or train own staff) How to meet the deadline for the structural changes required before 27 July 2012. Funding options for the remaining 11 million. Staffing issues (40% staff required).

Identifying these objectives is very important because without clear objectives the business will not achieve its goals or will underperform. Some objectives are predictable and others are far reaching and can impact the performance of the business and can also be of a high risk. These objectives must be prioritized, giving attention to the ones that are more urgent and less urgent.

Source: www.projectsmart.co.uk An author suggested prioritizing the key project objectives by; which of them Must be delivered which has the maximum flexibility and is defined as 3

Making Management Decisions

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Could, with the other two factors between these as Should. This simply means that at least one factor can be allowed to slip, and provide flexibility for setting a proper risk plan to ensure the essential factor is met (coleyconsulting). Certain aspects of the project is to be given more priorities than the others, the main priorities should be factors of Scope, Quality, Time and Resources. The four are equally important but priorities should be given when one is more flexible than the other. In such a project time should be first prioritized as the venue should be ready by the 27th July 2012, tactical plans should be in place to ensure immediate problems are dealt with. Issues with B.O.B construction not being able to meet the deadline, staffing issues, etc. should be tackled effectively to ensure the project is completed before the deadline. Meeting the deadline does not mean the quality of work should be compromised; the quality of work should be the next priority. The finished work should also deliver the service it was meant for, the end result or the finished project should have the have the specified features and functions. Cost is another key element which should be prioritized next, knowing the estimated cost; the resources should well manage to keep cost to a minimum. Even though several efforts will be made to avoid overspending, things could go the other way and overspending might occur so prioritization in this area is very important.

Strategic plan: To complete the project a month before the deadline. To ensure the total expenses for the completed project do not go over the estimated 92million. Attract more investors from other countries. To get more funding either through sponsorship, bank loan or from the government in other to raise the remaining 11million

Making Management Decisions

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Tactical plans: Use staff from catering agencies instead of hiring full time. Hire most equipment instead of buying if that will cost less. Train own staff on Health and safety and legal compliance within the next 3months. Operational planning: Engaging the team, developing and providing answers is very important. The Project Manager should allocate the part of the project that is to be done on daily basis. Daily or monthly schedules could be developed, where things go wrong managers should come in immediately to make decisions on what to do and how best. Most importantly project Managers should decide on who to do what, as this makes the process go smoothly and effectively. In a project choice of people is a prerequisite to success (Rollinson 2007, p.49). There should also be constant checks by managers to ask why something is done in a specific way. This challenges employees to find better ways and to become more efficient. The organisation and management systems are required to implement these strategies. This could be designing new systems, or adapting existing systems but extra care must be taken when implementing this strategies. For the project to be a success, effective decisions are to be taken at all levels; Strategic and tactical, operational, divisional, departmental, managerial, supervisory and individual. The first step in decision making is the definition of the issue. Once the issue is defined, the possible effects and consequences of particular course of action can be understood (Pettinger 2002, p.113). Time, effort and resource will be wasted if this step is not taken into action.

Making Management Decisions

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ERIC AMANOR/RICARDO

Effective decision making requires the confidence that is generated by continues operation of the process. According to the rational model, the decision making process can be broken down into six steps (Schoenfeld, 2011). After a problem is identified ideas and information need to be collected and analyzed carefully so a decision can be made. After the decision is made it needs to be communicated and implemented throughout the intended departments and monitored over time to assure its effectiveness. Identifying the Problem According to the specific requirements given by the International Olympics Committee regarding the Martial Arts event, within 10 months four tasks will need to be addressed to enable the event to take place. The project will need to address the necessary structural changes to make the arena suitable for martial arts, consider health and safety and legal compliances, and look for alternative sources of staff and the finance to facilitate this event. 6

Making Management Decisions

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The logical sequence for the project considering the urgency of each task is as follows: Finance: To facilitate this event the cost is estimated at 92 million. The mayor of London pledged 37 million towards the project and several investors have agreed to invest 44 million. The 11 million remainder need to be financed otherwise it may jeopardize the project. Staffing: The Company can only facilitate 60% of staffing that have been trained. Additional 40% staff will be required. Health and Safety: To look for alternate providers that can deal with this, or to train own staff. Timescale Time management is very important in process determination. In this project the time frame is short but the project is expected to be completed before the deadline and the finished work should be of good quality. Information Gathering Most decisions are taken with inaccurate or less information. Decisions without information are strictly guess work (Pettinger,2005, p.115). Quality of information, as well as volume of information is required to make this project a success. The Government can be an alternative considering that the event is predicted to return revenue and profit 5 times higher than the initial cost and will secure employment for many people for at least another five years. Alternatives The result of the process is that alternative courses of action become apparent. At the very least there is always the choice of doing nothing. Implementation Action needs to be taken in the end. This comes as a result of working through each of the previous elements. Choices need to be made at this stage and the choice made impacts the future courses of action; there should be clear understanding as to why the choices was made. 7

Making Management Decisions

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2. Possible constraints and problems that may hinder decision making There are several constraints and problems that hinders effective decision making, these constraints are mainly Scope, Cost, and Time related. A successful project depends on how effective balancing of the scope of effort with resources available and within a set time (Hannagan 2008, p.427). The following are list of typical constraints and possible problems that hinder effective decision making; Communication, Time, Employee dynamics, Employee skills, Funding and finance available, Company policy, Legal constraints, Available Resources, Public interest, public pressure, lobby and special interest groups, Committees and other formal constitutional board. Below is a brief discussion of some of these constraints; Funding and finance available: Some crucial decisions will be disapproved because the cost involved might be too much, even though the decision could be the best. Company Policy; Almost every business have written policies, therefore certain decisions cannot be accepted if the decision will compel the business to make changes to its policy. Employee skills and Employee dynamics: Certain decisions cannot be made if it assumes high skills than that of the business employees, or if the approach to understanding will be complex. Communication: Most project managers communicate laterally, whereas line managers communicate vertically downwards to subordinates. Perception barriers do occur because every individual depending on their perception, personality, attitude, emotion and prejudices may view the same message in different ways (Kerzner, 2009 p.232). An effective way of communication should be established, as this contributes to a successful project.

Making Management Decisions

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3. Different approaches and possible solutions that could be applied when making management decisions. Bicycle Track Modification One of the challenges to be analyzed is the bicycle racing track that needs to be modified to be more suitable for martial arts. B.O.B Construction ltd has been outsourced for all of these aspects on previous tasks but can only deal with 75% of the required structure changes and it will take 14 months to get the venue ready. The event will take place in 10 months, so an alternative needs to be found. The best alternative will be to find another company that can take over the project and finish within the time frame. It is also important to remember that an important amount of time will be required to train and provide all the information to the chosen company and monitoring to make sure the company delivers the changes on time. Another option will be allowing B.O.B to deal with only 50% of the task as they can complete that within 10months and outsource the remaining 50% to a different company with a good reputation in the industry who can meet the deadline, taking into account the cost involved. Health and Safety and Legal Compliance The Health and Safety Executive has given a list of alternative providers that take care of the health and safety issue. Liveshows ltd can outsource that area to one of the providers, this will save time and the staffs could be allocated to do other tasks. Another option is to get staff trained by HSE and make Liveshows ltd responsible for managing their own health and safety, these might cost the business a lot and time will be wasted on training but the business will benefit from it, as all health and safety issues in the future can be handled by their staff. Staffing Issues Since Liveshows ltd can only facilitate 60% of the staffing with full time employees, an alternative is to look for catering agencies that provide specific manpower according to the events. As this event is expected to attract a large 9

Making Management Decisions

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number of visitors from Japan, China and Korea, hiring a significant number of people that understand the culture and speak the language would be of great value to welcome the visitors. The more knowledgeable staff could train the agency staff in the activities expected from them on the day of the event and the agency staff with the cultural background could explain how to treat customers from Japan, Korea and China. Financial Planning Liveshows ltd has managed to raise 81 million to facilitate the event but the total cost is estimated at 92 million. Liveshows need to look for ways to raise the 11 million remainder. Taking in consideration that the event is expected to return revenue and profit 5 times higher than the initial costs it should not be hard to raise the money. One alternative is to pitch the event as a great market opportunity and approach companies that could be interested in having a big exposure to the martial arts market. Advertises can be made in a way small and big companies can invest their money accordingly to the exposure they want to have in the event and Liveshows ltd can raise money from different sources. Another alternative is to renegotiate with the government the 11 million remainder by the fact that the event will secure employment for many people for at least another 5 years and boost the economy. One alternative is to borrow money from the bank, considering the interest rate and the terms of repayment. The bank loan should be the last resort as it will cost the company more in terms of interest and repayments.

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Making Management Decisions

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ERIC AMANOR/RICARDO

4. Decision Making and the various level at which it will be applied.

Source: www.tutor2u.com All decisions were made taking in consideration the time available for each challenge. Modifying the bicycle track and raising the capital necessary to facilitate the event are considered strategic decisions and tend to be more discussed between top management and owners or board of directors because their outcome will have a big impact in the company and have major consequences for the future success of the organization. Strategic decisions can take a long time before its implemented as the stakeholders (owners and board of directors) will all need to agree on the decision. Tactical decisions are decisions that are made on management level or among managers. These are medium term decisions such as the number of employees to recruit. Operational Decisions: These are typically routine, day to day decisions that will have little direct and immediate impact on the business as a whole (Hannagan, 2008 p.425). Most employees are involved in this decision making.

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Making Management Decisions

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Bibliography Text books Hall D, Jones R and Raffo C, 2005, Business studies, 3rd edition, Pearson, Harlow-Essex Hannagan Tim 2008, Management concepts and practices, 5th edition, Pearson, Harlow-Essex Kerzner Harold, 2009, Project Management, 4th Edition, John Wiley and Sons Inc New Jersey Pettinger R, 2002, Introduction to management, 3rd edition, Palgrave, New York Rollinson D, Broadfield A, and Edwards D,1998, Organisational behaviour and analysis, 1st Edition, Addison Wesley ltd, Harlow, Essex Websites Coley consulting<http://www.coleyconsulting.co.uk/moscow.htm> date accessed 20/10/2011 Managing a Business <http://managingabusiness.com/businessplanning/priority-system-classifyactivities> date accessed 22/10/2011 Project smart<http://www.projectsmart.co.uk/project-management-scopetriangle.html>date accessed 20/10/2011 Tutor2u< http://tutor2u.net/business/organisation/decisionmaking.htm> date accessed 22/10/2011

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