The Decision Making Process as It Relates to PlanningThe Decision Making Process as It Relates to Planning“Decision making is the cognitive process leading to the selection of a course of action among alternatives.” Usually the decision making process is implemented resulting from an identified problem that needs to be addressed and remedied. Each decision making process produces a final choice, which is called a decision. Planning is an integral part of the process. Without an organized plan, a final decision will be very difficult to achieve.
Planning and decision making are very similar, yet very distinct processes by which organizational goals are met. If the two processes are implemented properly, they can complement each other so that goals can be realized in the most efficient and effective manner possible. Planning involves identifying the organizations goals, an overall strategy to achieve these goals and a complete set of plans to incorporate and coordinate organizational work. As with any feat, problems arise and prevent goals from being realized.
The first step in the decision making process, as stated earlier, is to clearly identify the problem. For example, at my office we purchased a new accounting system, as the current accounting system limited reporting capabilities. It was an organizational goal to be able to report on very specific information; however the current system would not allow us to meet this goal. To tackle this problem, management decided to purchase a new accounting system. Purchasing a program that will structure financial information as required by the federal government does not come cheap and will result in a significant financial investment.
Once management decided to make the investment in the new system, the finance department was tasked with developing an operational plan that would specify the details of how the goal was to be achieved. The first step of the plan was to identify the breadth, or extent, of the plan. The finance department had restructured the accounting system once before and had a good idea of what the process would entail. It was determined that the process would take anywhere from four to six months to decide on a product, convert current information, implement the new system and train the users. Since instituting a new system will have a very specific effect on the day-to-day operations of the accounting and finance department, the plan is defined as an operational plan. Operational plans are short-term, specific and standing.
The Finance Department’s operational plan
Under the plan, the Finance Department used the Finance Department’s funds to create a system, or “market”, that would reflect the current situation in Canada.
The market system would have “exact” outcomes based on the financial data of individuals and small businesses and the market data of government. The market system would be based on existing market data that was not available in either the Public Accounts or the Current Revenue Agency systems, although some may already be available.
For financial reporting purposes, a standard “market” model would be the first one that would describe how the data would be used by the Financial Services Commission of Canada to maintain the integrity of financial services, and would be applicable to all financial institutions, including those that are subject to CRA.
A standard “market system” that would incorporate “market rate” and, in some cases, “fixed fee” reporting as set out in the CRA guidelines, would be the standard model that would guide the financial system in establishing the financial services industry’s reporting standards. In future versions of the Finance department’s proposal, the “customer” model or a customized view for reporting on data is also being considered.