Unit 1 KA9- Decision Making Flashcards
What are the three types of decision making?
strategic
tactical
operational
Explain Strategic decision making
Long term
Complex
Concerned with the direction of the company
Determines objectives
Made by senior management
High risk
Give examples of strategic decision making
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
Explain Tactical decision making
Medium term
Less complex
Concerned with meeting objectives
Made by senior and middle managment
Medium risk
Give examples of tactical decision making
Find cheaper suppliers
Cut costs of overheads
Expand the range of goods offered
Develop new marketing campaigns
Explain organisational decision making
Short term
Simple and routine
Concerned with day to day running of the business
Made by line managers, supervisors, and team leads
Low risk
Give examples of operational decision making
Working hours/ setting rotas for the staff
Giving days off
What goes on sale
Ordering of supplies
What are the two forms of decision making
Centralised
Decentralised
Explain centralised decision making
Where most decisions are made by senior management or head office
What are the advantages or disadvantages of centralised decision making?
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
Explain decentralised decision making
Decentralised decision making is when each department within the organisation has the authority to make their own decisions.
What are the advantages and disadvantages of decentralised decision making?
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
What did Henri Fayol say the characteristics of a good manager are?
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
What will occur when good decisions are made?
Increased productivity
Increased motivation and satisfaction of the staff
Increased customer satisfaction
Increased rate of growth
Increased profits
What will occur when bad decisions are made?
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
Explain SWOT analysis and provide examples
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
What are the three main factors that can effect decision making?
Finance
HR
Technology
How can finance effect decision making
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.
How can HR effect decision making
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.
How can technology effect decision making
Lack of the correct equipment or technology may restrict the decision-making process.
What other factors (other than finance, HR and technology) effect decision making
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
