2.3 Decision Making Flashcards
What is Decision-making?
Choosing one alternative from among a set of alternatives
What does the Decision-making process include?
Recognising and defining the nature of a decision situation
Identifying alternatives
Choosing the best alternative
Putting it into practice
What do managers make decisions about?
Problems and Opportunities
It may take a long time before a manager can know for sure if the right decision was made
What does Uncertainty show?
Problems and unexpected outcomes are unknown
What does Absolute Certainty show?
Probabilities and expected outcomes are known
What are the steps in the Scientific decision-making process
- Setting objectives
- Gather data
- Analyse data and formulate alternatives
- Select strategy
- Implement
- Review
What is Intuition?
It is an innote belief about something without conscious consideration
What are Opportunity Costs?
They measure the cost in terms of the next best alternative forgone
What are the benefits of Scientific decision -making?
Have a clear idea of where to head
Gathering data shows red using concernity
Analyse data allows for corrections or reviews
Alternatives (Using analytical rational methods)
Easier
Realistic
What are the drawbacks of Scientific decision-making?
Predict future (data could be wrong) Innovation Decision still could be wrong Cost Time-consuming
What are the types of Decision making influences?
Internal influences (from within business) External influences (from outside the business)
What are the Internal influences of decision-making?
Ability to collect data (innovation may not have previous data)
Finances available to collect and analyse data
Type of Leader
Experience/confidence of the leader
Shareholders power
What are the External influences of decision-making?
Political decision Economy Social Change Technology Competitors actions
