DECISION MAKING TECHNIQUES (p56-65) There are a number of techniques that may assist managers in making more effective decisions. As a HL student you must know: The Fishbone (cause & effect) diagram/ Decision Trees (probability diagrams) Force Field Analysis
THE FISHBONE Origins The fishbone diagram (also know known as the Ishikawa or cause and effect diagram) attempts to identify the causes of an event. It gets is names from the fact that the diagram resembles the skeleton of a fish. The diagram was created by Kaoru Ishikawa, who pioneered quality management processes in the Kawasaki shipyards. He became one of the founding fathers of Japanese modern management.
THE FISHBONE Analysis Fishbone analysis provides a structured way to help think through all possible causes of a problem. Causes in the fishbone diagram are usually arranged into four or six major categories, although this can be adapted to the individual situation.
Categories for the Fishbone The Six Ms: Recommended for Manufacturing Goods Manpower, Methods, Machinery, Materials, Mother Nature (environment), Measurements Recommended for Delivery Services Equipment, policies, procedures and people.
Steps in the Process for Using a Fishbone Diagram 1.Identify and agree on the problem 2.Establish the major causal factors involved. 3.Identify possible causes. 4.Analyze the Diagram
FISHBONE DIAGRAM PROCESS 1. Identify and Agree on the Problem Write down the exact problem Identify the staff involved, and when and where the problem occurs. Write the problem on the right hand side of the diagram. Draw arrow across the paper horizontally to the problem, providing a framework to develop ideas.
FISHBONE DIAGRAM PROCESS 2. Establish the major causal factors involved Identify the factors that may be root causes of the problem and merit further investigation. Draw lines off the spine for each of the factors and label the branches. These may include factors such as the people involved with the problem, machinery employed, methods used and materials used. These factors may be established using a brainstorming exercise.
FISHBONE DIAGRAM PROCESS 3. Identify possible causes Where a cause is complex, there may be several sub-causes. For each root cause identified ask: why is this cause happening? Establish possible related sub-causes. These are them smaller lines off the “bones” of the fish. The five waves technique (p64) would be useful here.
FISHBONE DIAGRAM PROCESS 4. Analyse the Diagram Investigate the most likely causes identified on the diagram, which may involve further, more extensive and detailed research. This should help clarify whether the causes are correct.
FISHBONE DIAGRAM – FOLLOWUP Once the diagram is completed, the business will put into action policies to address the underlying causes of the problem identified. For an application of the fishbone to the total quality management see p254 (textbook)
FISHBONE EXERCISE Problem A Business is experiencing declining sales of its Product X Identify possible causes of this problem and possible solutions, by completing a fishbone diagram.