Management decision making Flashcards
define tactical decisions
short term, fewer resources involved, easier to reverse, usually taken by more junior manager
define strategic decisions
long term, involves large commitment of resources, difficult to reverse, usually taken by senior management
define programmed decisions (think of the word program)
familiar and routine decisions, info required is easily found, well structured situations
define non-programmed decisions
less structured, requires routine solutions
define the term ‘opportunity cost’
the cost foregone for the next best alternative
name the two things decisions can be
scientific i.e. based on data, or based on intuition (subjective)
what do all decisions have?
opportunity costs
what do all decisions carry? as well as being based on what?
risks and rewards, based on uncertainty
describe ‘risks’
- it is possible to add a probability to quantify the degree of the risk
- it is measurable
describe ‘uncertainties’
- is not possible to add a quantifiable portability as the outcome is to unpredictable
- is not measurable
what is ‘doing nothing’ in business?
a risk
big businesses don’t fail, what is it thats failed?
their strategy
name the two types of decision making
scientific & intuition
give the features of scientific decision making
- supported by quantifiable evidence
- encourages logical thought processes, however:
- may require expensive data
- time consuming
give the features of intuition decision making
- allows for quick decision making
- encouraging innovation & creativity, however:
- difficult to justify
- reliant on experience & expertise
name the 3 influences on decision making
mission, objectives, ethics
define how mission influences decision making
does the mission fit in with its overall purpose?
define how objectives influences decision making
will the decision help the business achieve its goals within the specific time period
define how ethics influences decision making
- is the decision normally right? are managers comfortable with decision i.e. does it meet their own ethical standards
- the external environment including competition - resources constraints - time, HR, expertise, finance
