Decision making

Question 1

DESCRIBE the different roles of a manager.

Answer 1

1. Planning- looking at future needs of the organisation, looking ahead, seeing the potential opportunities, or problems, setting targets and strategies.
2. Organisation- ensuring necessary resources are available
3. Commanding- instructing others in what needs to be done
4. Coordinating- managers must bring together the resources of the business to achieve the overall objectives that have been set/making sure their is joined up thinking
5. Controlling- overseeing developments
6. Delegating- entrusting tasks to others and give subordinates the authority to carry out management level tasks.
7. Motivating- encouraging staff to achieve the potential and give them reason to enjoy their work.

Question 2

Strategic decision

Answer 2

Long term decisions made by senior management.

High risk

The most important decisions concerned with setting the objectives of the business.

Question 3

Tactical decision

Answer 3

Medium term decisions made by middle managers

Medium risk

They are concerned with implementing the strategic decisions

Question 4

Operational decisions

Answer 4

Short term decisions made by junior managers or supervisors

Low risk

Concerned with the day to day running of the business

Question 5

Name some constraints of decision making

Answer 5

This means anything which may prevent a business from implementing a decision successfully. This can relate to any internal/external factor eg
- staff may lack the skills needed
- business may not have enough finance
- the economy may be in recession
-inflation which means higher prices so lower sales
- low interest rates means cheaper to borrow so business can fund growth/high interest rate causing businesses unable to afford expensive borrowing making it harder for them to grow.
- low unemployment means people have good incomes so more spending therefore higher sale/high unemployment resulting in people having low incomes creating less sales.
-heavy snowfall can effect supplies, less sales due to people not going out as much
-natural disasters can ruin stock or premises therefore high costs for repairs
- changes in social trends
- staff may be resistant to changes i.e. Strike
- governments may block decisions eg. A potential merger.
Any other internal and external factor…

Question 6

What’s a SWOT analysis

Answer 6

A technique used by businesses to access their current position in their market, in order to help make decisions about future strategy.

The SWOT shows the past, current and future issues affecting the business, and classifies these in to 4 categories in a matrix layout…

• strengths
• weaknesses
• opportunities
• threats

Question 7

STRENGTHS

Answer 7

Current features of the business which contribute positively to its success, I.e. Things it’s good at, which could include:

• high quality staff and good staff morale
• well known brands or products
• highly qualified management team
• strong market share
• availability of finance

Question 8

WEAKNESSES

Answer 8

Current features of the business which detract from its success I.e. Things it’s not so good, this could include:

• lack of finance
• out of date equipment
• unmotivated workforce
• Cash flow problems
• faulty products

Question 9

OPPORTNITIES

Answer 9

Issues happening (or which could happen) outside the business which could increase its success. Such as:

• a competitor going bust so the business could take on its customers
• customer tastes and fashion falling in line with an organisations specialism
• government introducing favourable legislations

Question 10

THREATS

Answer 10

Issues happening outside the business which could reduce its success, such as:

• competitor action like cheaper prices or better quality products
• customer tastes and fashions changing, away from those the business specialise
• governments introducing legislation that impacts the business badly.