Factors affecting the quality of decisions

Question 1

How can human resources affect the quality of decisions?

Answer 1

The human resources, people within the organisation, can affect decision-making in the following ways:
- managers’ ability, training and experience to make good decisions
- how much risk the managers will take when making decisions
- staff resistance to change
- managers’ ability to handle stressful and complex situations
- the likelihood of overpowering managing directors or owners overturning decisions made by the middle management.

Question 2

How can availability of finance affect the quality of decisions?

Answer 2

Whether or not the organisation has or can get a hold of finance can impact on decision-making in the following ways:
- whether finance is available to exploit the opportunities, address weaknesses or build on strengths
- financial constraints may mean an organisation cannot choose the best solution to a problem.

Question 3

How can technology affect the quality of decisions?

Answer 3

The availability of technology to help make informed decisions can affect the quality of decisions, for example:
- Spreadsheets can improve the accuracy of calculations using formula and perform ‘What If?’ statements to calculate the projected outcome of a decision.
- Databases can improve the speed of decision-making by making it easy to search for information quickly using queries and sort functions.
- Emails can be used to communicate information regarding decisions to many employees at once and attachments containing information can be sent which reduces printing costs.
- Internet sites can be used to find out a vast amount of information to make an informed decision.
- Video-conferencing (also known as teleconferencing or simple video calling) can reduce the need for managers to travel to meetings, saving time and travel costs, but allowing key players to have a hand in decisions.

Question 4

How can other factors affect the quality of decisions?

Answer 4

• Company policy may restrict the decisions made or the options that are available to decision-makers.
• Lack of opportunity to consult other may mean that decisions are poor and staff resist change.
• Time constraints can restrict the time taken to decide on a course of action or to implement a final decision.
• The quality of information available on which to base the decision may be poor. In other words it could be out of date, biased, not relevant or incomplete, for example.