Unit 1 KA9- Decision Making

Question 1

What are the three types of decision making?

Answer 1

strategic
tactical
operational

Question 2

Explain Strategic decision making

Answer 2

Long term
Complex
Concerned with the direction of the company
Determines objectives
Made by senior management
High risk

Question 3

Give examples of strategic decision making

Answer 3

Expanding into new markets
Diversify the product range
Merge with other large companies
Introduce new management systems
Change organisation structure
Increase the demographics catered for

Question 4

Explain Tactical decision making

Answer 4

Medium term
Less complex
Concerned with meeting objectives
Made by senior and middle managment
Medium risk

Question 5

Give examples of tactical decision making

Answer 5

Find cheaper suppliers
Cut costs of overheads
Expand the range of goods offered
Develop new marketing campaigns

Question 6

Explain organisational decision making

Answer 6

Short term
Simple and routine
Concerned with day to day running of the business
Made by line managers, supervisors, and team leads
Low risk

Question 7

Give examples of operational decision making

Answer 7

Working hours/ setting rotas for the staff
Giving days off
What goes on sale
Ordering of supplies

Question 8

What are the two forms of decision making

Answer 8

Centralised
Decentralised

Question 9

Explain centralised decision making

Answer 9

Where most decisions are made by senior management or head office

Question 10

What are the advantages or disadvantages of centralised decision making?

Answer 10

Advantages
decisions made by the most experienced people
decisions made more quickly
lead to greater uniformity within the organisation

Disadvantages
staff demotivated from lack of input in decisions
central team slower to respond to local changes in market

Question 11

Explain decentralised decision making

Answer 11

Decentralised decision making is when each department within the organisation has the authority to make their own decisions.

Question 12

What are the advantages and disadvantages of decentralised decision making?

Answer 12

Advantages
staff motivated by the opportunity to make decisions and be creative d
local teams can respond quickly to changes in local market
can provide better level of customer service

Disadvantages
decisions made by less experienced people
local decisions may be inconsistent with overall strategy

Question 13

What did Henri Fayol say the characteristics of a good manager are?

Answer 13

plan - preparing for the future and create action points
organise - having resources ready and putting plan into action
command - ensuring employees are working
co-ordinate - making sure all departments work together to achieve the end goal or objective
control - checking the effectiveness and efficiency of the proposed plan
delegate - entrusting a task or responsibility to another member of staff
motivate - encouraging staff to give their best

Question 14

What will occur when good decisions are made?

Answer 14

Increased productivity
Increased motivation and satisfaction of the staff
Increased customer satisfaction
Increased rate of growth
Increased profits

Question 15

What will occur when bad decisions are made?

Answer 15

Employees lose motivation
Lowered productivity
Greater level of complaints
Worsened brand image
Less trust is given to the business so they lose customers
Loss of profits

Question 16

Explain SWOT analysis and provide examples

Answer 16

Strengths are areas that the company is performing well in or is good at such as having a strong brand image or a good corporate culture.

Weaknesses are areas that the company is not doing well in or is performing more poorly such as lack of investment in new technology or a poorly performing product.

Opportunities are things that could happen outwith the business to help them grow or become more profitable such as the chance to take over a competitor or a boom in the economy.

Threats are external factors that could prevent a business from meeting its goals such as:

a new competitor opening or reducing their prices
a recession

Question 17

What are the three main factors that can effect decision making?

Answer 17

Finance
HR
Technology

Question 18

How can finance effect decision making

Answer 18

There may not be finance available to the business to make the decisions they would like to.

For example, a business may wish to invest in new machinery to increase production but they do not have enough capital to allow them to do this.

Question 19

How can HR effect decision making

Answer 19

The quality of decisions made by managers can be affected by:

their skills and expertise
the amount and quality of information they have available

The staff involved in implementing the decision need to be willing to cooperate and work with the decision for it to be successful.

Senior managers may not agree with the decisions.

Existing company policy may restrict the decisions a manger is allowed to make.

Question 20

How can technology effect decision making

Answer 20

Lack of the correct equipment or technology may restrict the decision-making process.

Question 21

What other factors (other than finance, HR and technology) effect decision making

Answer 21

The decision-making process may also be affected by:

amount of time available to make the decision
external pressures such as exchange rates and economic stability