Influence On Decision Making Flashcards
What roles does data have in decision making?
• real time data capture of transactions and customer preferences.
• responding to real time changes in market conditions.
• market research.
• capacity management.
• inventory control.
What are the key influence on business decisions?
• business objectives/budgets.
• organizational structures - who makes the decisions?
• attitude to risk.
• availability and reliability of data.
• the external environment.
What is opportunity cost?
The cost of missing out on the next best alternative. The benefits that could’ve been gained by making a different decision.
How can understanding opportunity cost help businesses?
• make more informed decisions.
• allocate resources efficiently.
• evaluate the true cost of their choices.
How can tactics influence decision making?
Decisions that benefit the business short term.
Eg using short term promotions to increase sales.
How can strategies influence decision making?
Decisions that help to achieve long term aims.
Eg to be the leading eco friendly business in the industry.
How can mission statements influence decision making?
Will make decisions that prioritize achieving their mission statement.
Eg IKEA would make decisions that increases their product range.
How do objectives influence decision making?
Will make decisions that will lead to small steps being made in order to eventually reach the business’ long term aims.
Eg to increase sales by 25% in 4 months.
How do ethics influence decision making?
Whether to prioritize ethics or low costs.
Eg Lush would always choose environmentally friendly, ethical options even if they cost more.
How does the external environment influence decision making?
Decisions may be forced to change based on changes in the external environment. (Political, economical, social, technological, legislative, environmental).
Eg an increase in minimum wage may mean the business has to decide how to cut costs elsewhere to save money.
How do resource constraints influence decision making?
The decision that uses the least limited resources, in order to save money.
Eg seasonal resources in food related businesses. Or financial limitations.
How does competition influence decision making?
The decision that gives the business a competitive advantage and sets them apart from others in the industry.
Eg supermarket price wars like Lidl vs aldi.
How does business culture influence decision making?
Decisions that help to improve internal business culture/working environment.
Eg improving teamwork rather than focusing on individual tasks.
How does power of stakeholders influence decision making?
The decision that satisfies stakeholders and reaches a compromise between them.
Eg employee satisfaction to improve staff retention.
