Types of Decisions Flashcards
Where in centralised structure are decisions kept?
In a centralise structure the decision-making is kept at the senior level of the business.
Example: Fast food franchises don’t let their franchisees make any major decisions on prices or promotion so they retain an overall consistency and identity.
Where in decentralised structure are decisions kept?
In a decentralised structure decision-making is delegated to branches or outlets.
Example: Waterstones operates in this way and lets branch managers order books that reflect the local area and what local customers would want to read.
What is SWOT analysis?
This allows organisations to look at its internal (inside the organisation) strengths and weaknesses, as well as external (outside the organisation) opportunities and threats.
What are strengths an organisation can possibly have? SWOT analysis
Strengths are things the organisation is good at. This could be:
- availability of finance
- well-known brands or products
- goods/services that make the most profit
- products that are ‘benchmarks’ in the market which competitors try to copy.
- assets the business owns, such as a large modern factory, modern technology or a retail outlet in a prime location.
- high-quality staff and good staff morale.
What are weaknesses an organisation can possibly have? SWOT analysis
Weaknesses are things the organisation is ineffective at. These could be:
- lack of finance
- lack of technology
- poor customer service reputation
- faulty products
- products or branches that are making losses
- assets that are in a state of disrepair, such as a crumbling factory or aging fleet
- untrained staff or low staff morale
What are opportunities an organisations can face? SWOT analysis
Opportunities are the possible chances a business could take that arise due to something happening outside the organisation’s control. These might be:
- a competitor going bust, so the business could take on its customers
- a boom period in the economy that the business could exploit
- customers tastes and fashions falling in line with an organisations specialism
- governments introducing favourable legislation
- advancements in technology that the business could exploit, example, e-commerce
What are threats an organisations can face? SWOT analysis
Threats are things that might impact on a business achieving its aims or making positive decisions. These may be:
- competitors actions, such as cheaper prices or better-quality products
- a downturn in the economy, such as a recession
- customers tastes and fashion changing, away from those the business specialises in
- governments introducing legislations that impacts badly on the organisations
- advancements in technology that could leave the business behind its rivals
What are advantages of using SWOT analysis?
- Identifies strengths and allows a business to build upon them.
- Identifies weaknesses and allows them to be addressed.
- Identifies opportunities and allows them to be exploited.
- Identifies threats and allows them to be turned into opportunities, e.g embracing advancing technology, not allowing it to leave the business behind.
- Time is taken to analyse is the business’s current position so no rash decisions are made.
What are disadvantages of using SWOT analysis?
- A SWOT analysis is very time consuming, which can slow down decision-making.
- A SWOT analysis is a very structured process which can stifle creativity and gut reactions from managers.
- A SWOT analysis can generate many ideas; however, it doesn’t help pick the correct ones.
- A SWOT analysis produces a result that reflects the opinions of those who carry it out which could lead to bias.
- A SWOT analysis considers information that is available at a particular moment and may become outdated quickly.
