Decision making + conflicts in decision making Flashcards
what are the 3 types of decisions you can make
Strategic
Tactical
Operational
Strategic decision making
- long term
- expensive
- made by senior management
- reputation being damaged risk if they go wrong
- difficult to reverse
(launching a new product range, expanding abroad, acquiring another company)
Tactical decision making
- medium term
- taken by middle management
- easy to rectify
- less costly
- they affect particular departments
(changing price of a product, new promotional campaign, training certain workers)
Operational decision making
- short term
- taken by department managers
- easily reversed
- cover the day to day decisions without really thinking about it
(allocating staff duties, handling customer queries)
Decision making and effective decision making
One of the most important factors in achieving success and meeting targets
Involves: Identifying the options available Consultation and advice The use of decision making tools Clear vision Commitment to carrying the decision through and effective implementation
Particularly important when winning over stakeholders
The effects upon all stakeholders need to be considered in the decision making process
Tackling and beginning the decision making process
Weighing up the pros and cons of the change
Process is only a rough guide - looks into the process OBJECTIVELY - speaking up about the concerns before moving onto the next
Decision making tools
some quantitative some qualitative
SWOT Porter's 5 forces PEST analysis Decision trees Time series analysis Help from business advisors (bank) Advice from consultants Market research information Financial information on the economy - local, national, international Business (internal) financial accounts
Deciding upon decision making tools
risk, bias, accuracy must also be taken into account when using any decision making tools
Not possible NOR advisable to use all methods to make a decision = too confusing
Choosing to ignore information on what they believe is a good desirable course of action is also common
= with investment decisions - payback period better etc.
Business decisions often about business confidence or lack of it
Targeting main objectives (survival, break even, growth, profitability)»_space;»» lesser objectives (market leadership, customer satisfaction, low labour turnover, low environmental impact)
Ansoff matrix
see another sheet
Conflicts in decision making
One decision making tool suggesting taking a certain route that others don’t think is right
Manager taking the final judgement
Why would there be conflicts in decision making?
the information collected doesn’t reflect any type of reality
Staff morale + customer satisfaction cant be quantified or taken into account with these tools
If information or research has been taken from external agencies to contribute to the deciosn making tools, it may be inaccurate information
= lack of business knowledge
Benefits of using the tools
Good research used for the tools can be useful
Technology and computer aided work allows the decision maker to look at different scenarios - sales predictions
