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DECISION MAKING TECHNIQUES
an essay about business planning
an essay about business planning
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Making Management Decisions
ASSIGNMENT 1
Lewandowska & Santhirasekaran
1. Principles of business planning and decision making
Decision Making is “A commitment to action” (Mintzberg, H., 1983, p. 188) ; Management decisions are made for a lot of different reasons, mainly because decision making is a fundamental aspect of the management functions and management decision-making which makes it a key management role. (M. Teale, V.Dispenza, J. Flynn, D.Currie, 2003, p. 10)
(D. Boddy, 2008, p. 209)
Now a day’s making management decisions has become more and more difficult, they need to be made more and more quickly; have to be made in increasingly complex and unpredictable situations. These together, making sure the risks associated with making the wrong decision is considered. (T. Hannagan, 2008, p. 421) There are a lot of factors that can influence decision making; those include: time availability, detail provided about the overall goal, employee dynamics, employee skills, group and/or individual decisions, available resources and founding and finance availability. Furthermore the parts of this project that must be prioritised will include the budget & financial planning, deadline of the project and staffing.
Three main stages of planning process include analysis, selection and implementation and management. One of the theorists, W. Edward Deming proposed that management decisions are based on continual improvement and can be done in 4 steps; as it is shown below.
Source: Deming (1994)
The diagram above illustrates the continuous process, which is also known as the PDCA cycle (Plan, Do, Check, Act) Deming has proposed that the business planning process should be place...
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... H. (1983). Power in and Around Organizations. Englewood Cliffs: NJ: Practice Hall.
T. Hannagan. (2008). MANAGEMENT concepts & practices (5th ed.). Harlow: Pearson Education Limited.
balancedscorecard.org, Paul Arveson. (1998-2013). TheDemingCycle. Retrieved November 14, 2013, from www.balancedscorecard.org: http://balancedscorecard.org/TheDemingCycle/tabid/112/Default.aspx
toolboxes.flexiblelearning.net.au. (2013). Retrieved November 13, 2013, from demosties: http://toolboxes.flexiblelearning.net.au/demosites/series3/316/ip/ip_c15.html
Olympic Legacy 2012. 2012. [E-book] Switzerland: International Olympic Committee. p. 14. Available through: Google http://www.olympic.org/Documents/Olympism_in_action/Legacy/Olympic_Legacy.pdf.pdf [Accessed: 6 Nov 2013].
Priemus, H., Flyvbjerg, B. and Wee, B. 2008. Decision-making on mega-projects. Cheltenham, UK: Edward Elgar.
According to Craig Raucher, there are four basic steps to proper strategic planning. First and foremost, a business leader must analyze and assess the current standings of the business. Once the analysis is complete, the next step is to formulate and document a strategy to improve upon the framework of the business. Step three involves placing the plan into action, followed by the final phase, where a business leader examines the results of the
Projects are widely used by many organizations and government institutions in the course of conducting their business. One of the reasons for this is because they have been proven to be effective in initiating change and translating strategic programs into daily activities. However, it has been established that most projects fail to deliver on time, budget, and customer specifications. In most cases, this failure is caused by over-optimism by the project management team. This over-optimism commonly referred to as optimism bias can simply be defined as overestimating the projects benefits and conversely underestimating its cost and duration time. Research have portrayed that this is often caused by failure to properly identify, understand, and manage effectively the risk associated with the project therefore putting its success at jeopardy(Mott McDonald, 2002). Fortunately, this biasness can be detected and minimized during the project gateway process.
A study published in the winter 1997 volume of Business Strategy Review suggests the major factor in a decisions success is the decision process itself. The study, by Paul Nutt, suggests that poor decision making processes cost North American businesses billions of dollars each year. The study also proposes that most managers don't realize the importance of the process, and it's effect on the success of the decision.
For any organization, planning, the first step in the four management functions, is very significant to reach success. During the planning process, organizations establish goals for expectations on performance and then decide on how to reach that specific goal. For example, increasing sales each year is Pacsun's year long goal. The stores keep all of their sales reports, return logs, and exchange records for each day, so when that same business day comes around again the following year, each store knows exactly how many sales they need to have to increase sales for the current year. They also keep track of each store's average dollar amount per sale and how many units are being sold through each transact...
The last process is called planning. Planning, formerly called Phase II, is the bridge to change. This can include making a clear plan and creating a menu of options for how to proceed.
Olymponomics, 2008, London 2012: Olympic Risk, Risk Management and Olymponomics, Accessed on 29th May 2014, Available at: http://olymponomics.wordpress.com/2008/09/29/london-2012-olympic-risk-risk-management-and-olymponomics/
Managers should be ready to teach the importance of decision-making skills and reinforcing organizational policy. Avoiding hasty, careless decisions, which can have devastating results on the manager's unit or the entire organization. Decisions made with forethought, using the many managerial tools available will lead to better and more profitable operatio...
Decision making plays a central role in management; for some people, management is decision making. However, there are good and bad decision makers in every culture. Good decision makers in every culture are those who learn not only to cope with the ambiguity and uncertainty of reality, but to thrive on it. Historically, managers were able to successfully base their decisions solely on their own experience and their own culture; today such a circumscribed domestic perspective no longer works.
Making decisions is an important part of our everyday life. Decisions define actions and lead to the achievement of goals. However, these depend on the effectiveness of the decision-making process. An effective decision is free from biases, uncertainties, and is deeply dependent on information and critical thinking. Poor decisions lead to the inability to achieve set objectives and could lead to losses, if finance is a factor. Therefore, it is important to contemplate about quality and ways to achieve it in decision-making, which is the focus of this paper. The purpose is to look into the needs of decision-making, including what one should do and what one should not do.
Problem solving and decision-making are fundamental in all managerial activities. Although these defining characteristics of management can be used interchangeably, current literature makes a comprehensible delineation between the two. Problem solving can be defined as a mental process and is part of a larger process that begins with identifying the problem and ends by assessing the efficiency of the solution. Decision-making is also considered a mental process and identifies several alternative scenarios before making a final selection. For the purpose of this analysis, I will discuss the similarities and differences of problem solving and decision-making. I will also explain the steps of the decision-making process and discuss the different decision-making approaches.
Decision-making is an indispensable facet of modern management. It is a primary function of management. A manager's major job is rational decision-making. He takes hundreds of decisions consciously and subconsciously. Decision-making is the key part of the manager's activities. Decisions are important as they determine both management and organizational actions. A decision may be defined as “a course of action which is consciously chosen from among a set of alternatives to achieve a desired result.” It represents a well-balanced judgment and a commitment to action. It is justly supposed that the first important function of management is to get decisions on problems and spots.
Decision making is important in leadership. Effective leaders are not afraid to make tough decisions, even when is unpopular (Fretty, 2005). As leaders, decisions are made constantly and unfortunately, there are many that will certainly be unpopular but must be made for the good of the organization. Among the daily noise and chaos in the upper echelons, leaders realize each decision must be carefully thought through and analyzed in order to make the best decision for the particular situation (Davenport, 2009). Devise Products Unlimited (DPU) is a such company; facing chaos and going through some rapid changes, it is critical to thoroughly analyze the decision-making process. Further, due to the newly acquired government contract, the need
Some decisions prove to be vital and any miscalculation that may be involved may prove dire for the individual or the organization. In identifying the criterion to use while evaluating different decisions, many factors pertaining the structure should be considered. The pros and cons of every decision made should be evaluated to ensure that the option chosen has the most positive effect on the individual and the organization. Some of the activities that may require keen decision making include project development, finance and operations. With the knowledge attained it will be easier to cope with tough decisions that may come up in my career. Decision making models may be generated to give an in depth view to the problem and also provide critical analysis ability. It is also vital noting that for those in managerial positions, they face a bigger task in decision making. A good understanding of the business function and structure will provide an in depth knowhow to those that have studied the
For decision making purposes, the projects can be further divided into two groups which is independent project and mutually...
Therefore, to achieve this objective, managers have to make choices in decision-making, which is the process of selecting a course of action from two or more alternatives (Weihrich & Koontz; 1994, 199). A sound decision making requires extensive knowledge of economic theory and the tools of economic analysis, that are directly related in the process of decision-making. Since managerial economics is concerned with such economic theories and tools of analysis, it is very relevant to the managerial decision-making process.