Decision Making Flashcards
what is a decision
the choice between alternatives. effective decision making is essential for successful business, and poor decisions can have a negative effect on businesses
what are the types of decisions
strategic, tactical, operational
what are strategic decisions
made on a long term basis
sets out the objectives of the company
made by senior management
often proactive, made to stay ahead of competition
what are some examples of strategic decisions
what products will the business produce?
what sections of the market will the business aim for?
where will the business be in 5-10 years time?
what are tactical decisions
made on a monthly, or yearly term
done by middle management
made to achieve main business objectives
what are tactical decisions
made on a monthly, or yearly term
done by middle management
made to achieve main business objectives
what are examples of strategic decisions
if a crisps company strategic decisions was to increase sales, then a tactical decision would be to develop more product lines
what are operational decisions
made on a daily or weekly basis
made by all employees
often reactive, when a change occurs
what are examples of operational decisions
when an employee is ill, the manager must recognize the shift rota
what are centralised decision decision making
when decision making is mostly done by senior managers
what are the advantages of centralised decision making
decisions made by the most experienced people
decisions made more quickly
leads to greater uniformity within the organisation
what are the disadvantages of centralised decision making
staff can become demotivated from a lack of input in decisions
central team slower to respond to local changes in market
what is decentralised decision making
when each department within an organisation has the authority to make their own decisions
what are the advantages of decentralised decision making
staff motivated by opportunity to make decisions and be creative
local teams can respond quickly to changes in local market
can provide better level of customer service
what are the disadvantages of decentralised decision making
decisions made by less experienced people
local decisions may be inconsistent with overall strategy
