Decision making- Business

• What is the most important aspect of management?

  Decision making
• Why is effective decision making essential for successful business practice?

  Because poor decisions can have negative effects on a business
• What is a decision?


  A choice between alternatives
• What are the three types of decisions in business?

  • Strategic
  • Tactical
  • Operational
• What characterizes strategic decisions?

  They are made on a long-term basis and set out company objectives
• Who typically makes strategic decisions?


  Top Management (Directors/Owners)
• What is an example of a strategic decision?

  Growth through mergers or acquisitions
• What defines tactical decisions?

  They are made on a monthly or yearly basis to achieve strategic objectives
• If Walkers' strategic decision was to increase sales, what would be a tactical decision?

  Developing more product lines (varieties)
• What characterizes operational decisions?

  They are made on a daily or weekly basis and are often reactive
• Who typically makes operational decisions?

  All managers, mostly junior management
• Compare strategic, tactical, and operational decisions.

  • Strategic: Long-term, made by senior managers, complex
  • Tactical: Medium-term, made by middle managers, specific
  • Operational: Short-term, made by junior managers, simple and routine
• What are the advantages of centralized decision making?

  Decisions are made by experienced people and are quicker
• What are the disadvantages of centralized decision making?

  Staff may be demotivated from lack of input in decisions
• What characterizes decentralized decision making?

  Each department has the authority to make its own decisions
• What are the advantages of decentralized decision making?

  Staff are motivated and can respond quickly to local market changes
• What are the disadvantages of decentralized decision making?

  Decisions may be made by less experienced people
• What are the seven functions of management according to Henri Fayol?


  • Planning
  • Organizing
  • Commanding
  • Coordinating
  • Controlling
  • Delegating
  • Motivating
• What does the planning function of management involve?

  Setting forward plans in relation to business objectives
• What is the purpose of the organizing function of management?

  Collecting, storing, and processing information
• What does commanding involve in management?

  Being the leader and instructing staff
• What is the role of coordinating in management?

  Ensuring all staff are working towards the same goal
• What does controlling involve in management?

  Ensuring the plan is on target and monitoring quality of work
• What is the purpose of delegating in management?


  Entrusting a task or responsibility to another member of staff
• What does motivating involve in management?


  Encouraging staff to do their best
• What are the consequences of good and bad decision making?

  Good decision making:

  • Increased productivity
  • Increased profits
  • Growth of the business

  
  

  Bad decision making:

  • Employees lose motivation
  • Production is disrupted
  • Increase in customer complaints
• Why is it important to make high-quality decisions?

  Because the success or failure of an organization depends on effective managers' decisions
• What factors influence the quality of decision making?

  The accuracy and quantity of information gathered
• What are some internal constraints on decision making?

  The availability of finance and the skill and training requirements of employees
• What is involved in evaluating the quality of a decision implemented?

  Measuring sales levels to see if they have increased
• What is SWOT analysis used for in decision making?

  To identify different internal and external factors that may impact the decision-making process
• What does SWOT stand for?

  • Strengths
  • Weaknesses
  • Opportunities
  • Threats
• What are strengths in a SWOT analysis?


  Internal factors that the business is good at that may help
• What are weaknesses in a SWOT analysis?

  Internal factors that the business is bad at that may harm
• What are opportunities in a SWOT analysis?

  External factors that may help the business
• What are threats in a SWOT analysis?

  External factors that may harm the business
• How can you categorize the following factors in a SWOT analysis: Competitor has gone bankrupt, Experienced workforce, High production costs, New competitor, Growth in demand for your product, Poor location, Increased income tax, Loyal customers?

  • Strengths: Experienced workforce, Loyal customers
  • Weaknesses: High production costs, Poor location
  • Opportunities: Growth in demand for your product
  • Threats: Competitor has gone bankrupt, New competitor, Increased income tax
• What are the benefits of using SWOT analysis in decision making?

  • No rash decisions are made
  • Better quality decisions based on relevant information
  • Opportunity to explore alternatives
  • Enhances innovation and responsiveness
  • Evaluates effectiveness and impact of decisions
• What are the constraints of using SWOT analysis?

  It can be time-consuming and may not take internal and external constraints into account