Business objectives and strategy - Decision Making Flashcards
explain the nature and purpose of decision making?
making effective choices which will:
- achieve success
- meeting targets
evaluate the impact/importance of effective decision making to stakeholders and the business itself?
- opportunity costs
- survival
- profit
- break even
- growth
definition to remember: volatility
a tendency to change quickly and unpredictably
the external environment will constantly change, e.g. economics
explain the correlation between decisions and business aims and objectives?
businesses need to make decisions based on their aims/objectives in order to be successful
what is an operational decision?
- day-to-day
- short-term
- managers of departments make them
what is a tactical decision?
- medium-term
- affect a specific part of business
- made by middle management
what is a strategic decision?
- long-term
- affect the whole business
- made by board/senior directors
what are the quantitative decision making tools?
- financial accounts of business
- decision trees
- time series analysis (TSA)
what are the qualitative decision making tools?
- SWOT analysis
- market research info
- PEST
- Porters 5 forces
- advice
- brainstorming
why might conflicts arise?
- info may not reflect reality
- customer satisfaction is impossible to quantify –> unexpected
- expert research could be useless if the researchers do not understand the situation
why might conflict arise with stakeholders?
- shareholders only interested in profit
- customers want quality, reliability, low prices and good customer service
- employees/unions want high wages and no redundancy
- local community interested in growth for jobs but no pollution
- environmental groups want eco-friendly methods
