Management decision making

Question 1

define tactical decisions

Answer 1

short term, fewer resources involved, easier to reverse, usually taken by more junior manager

Question 2

define strategic decisions

Answer 2

long term, involves large commitment of resources, difficult to reverse, usually taken by senior management

Question 3

define programmed decisions (think of the word program)

Answer 3

familiar and routine decisions, info required is easily found, well structured situations

Question 4

define non-programmed decisions

Answer 4

less structured, requires routine solutions

Question 5

define the term ‘opportunity cost’

Answer 5

the cost foregone for the next best alternative

Question 6

name the two things decisions can be

Answer 6

scientific i.e. based on data, or based on intuition (subjective)

Question 7

what do all decisions have?

Answer 7

opportunity costs

Question 8

what do all decisions carry? as well as being based on what?

Answer 8

risks and rewards, based on uncertainty

Question 9

describe ‘risks’

Answer 9

• it is possible to add a probability to quantify the degree of the risk
• it is measurable

Question 10

describe ‘uncertainties’

Answer 10

• is not possible to add a quantifiable portability as the outcome is to unpredictable
• is not measurable

Question 11

what is ‘doing nothing’ in business?

Answer 11

a risk

Question 12

big businesses don’t fail, what is it thats failed?

Answer 12

their strategy

Question 13

name the two types of decision making

Answer 13

scientific & intuition

Question 14

give the features of scientific decision making

Answer 14

• supported by quantifiable evidence
• encourages logical thought processes, however:
• may require expensive data
• time consuming

Question 15

give the features of intuition decision making

Answer 15

• allows for quick decision making
• encouraging innovation & creativity, however:
• difficult to justify
• reliant on experience & expertise

Question 16

name the 3 influences on decision making

Answer 16

mission, objectives, ethics

Question 17

define how mission influences decision making

Answer 17

does the mission fit in with its overall purpose?

Question 18

define how objectives influences decision making

Answer 18

will the decision help the business achieve its goals within the specific time period

Question 19

define how ethics influences decision making

Answer 19

• 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