Decision Making Processes in Organizations

This assignment delves into the multifaceted nature of decision making within organizations. Students are required to analyze and discuss key theories and concepts from texts by prominent authors such as Anne M. Pettigrew ('The politics of organizational decision-making') and Gary A. Klein ('Streetlights and shadows'). The assignment encourages critical thinking and application of these theories to real-world scenarios, making it an engaging and insightful exploration into the intricacies of organizational decision making.

Analytical Thinking and
Decision Making

Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
1. Importance of decision making and the application of decision analysis..........................3
2. Judgement issues associated with work.............................................................................6
3 Apply the simple multi-attribute rating technique (SMART) for outlining decision problem.
................................................................................................................................................7
4 Strength and weakness of the analysis..............................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
For an organisation to achieve success it is important to have an effective decision making
and analytical thinking. Management while carrying out its daily operations has to go through
various challenges for which judgement needs to be done so that no opportunities of the market
are missed out. Difficulty is faced in taking the decision for the best option as there are variety of
factors that has their influence on the operations. In an organisation different issues takes place
and some of them are of nature that require special attention for which analytical thinking needs
to be done (Parnell, Driscoll and Henderson, 2011). Anite is a software company that deals in the
measurement solutions to the international wireless market. In the following report the
importance of decision making and the application of same will be discussed in detail. SMART
technique will be used in order to solve the issues faced be the administration of Anite.
TASK
1. Importance of decision making and the application of decision analysis
Decision making is a logical processing of ideas. It is an integral part of an organisation.
Effective decision making results in better productivity. Decision are made at every level of the
firm to achieve business goals and objectives. It is a continuous process which help in managing
activities of company in a right manner. Decision making is basically selection of best idea from
various alternatives in order to achieve best solution for any problem. A lot of time is consumed
while making an effective decision. It involves some steps which should be followed. They are:
 Problem is defined.
 Information is gathered and data is collected.
 Developing alternatives.
 Choose best option for that problem.
 Plan according to that and execute the best decisions.
Decision making is very important for an organisation. Some of are listed below: Implementation of managerial functions: Without decision making other managerial
functions such as planning, organising, directing, controlling, staffing cannot be carried
out. If decisions are not made for an activity then other functions cannot be implemented
So, it is an important element for the organisation.

 Pervasiveness of decision making: Decisions are made in all functions and all activities
of organisation. Without the help of decision any kind of functions cannot be carried out. Helpful in planning and policies: Any Plan or policy is established only through
decision making. Without that no plan and policies can be formulated (Starcke and
Brand, 2012). There are various plans which is made by managers from that appropriate
decision is taken and implemented. Evaluation of managerial performance: Decisions help in evaluating the managerial
performance. If decisions which is made is effective and productive then manager is
qualified, able and efficient. If decisions are not producing any result or inefficient, then
manager is disqualified from making further decisions. Selecting best alternatives: Decision making is a process which helps in selecting best
alternative form numbers of alternatives. It is necessary to select best decisions for an
organisation because there are various available options. Managers first evaluate
advantages and disadvantages of every plan and then implement the best plan. Successful operation of business: Managers of different departments make different
alternatives for betterment of organisation then perform best decision. To maintain
position of company, managers has to make effective plans in proper manner. Therefore,
correct decisions help in successful operation of business. Proper utilization of resources: Organisation have different resources such as raw
material, finance, man power, method of operation, materials, machines and equipment’s
and information which help them in producing their finished goods. All these resources
can be properly utilised without any wastage with the help of right decision and at right
time (Starcke and Brand, 2012). Employees motivation: Decisions help in providing a proper framework of operations
and guidelines to every employee and staff. Right decisions will motivate employees a
help them to perform work in right directions and will increase their productivity. It also
provides different types of facilities and benefits on time. This results in effective work
done by employees at their job as per requirement of organisation. Achievement of goals and objectives: Decision making approach is necessary for
achieving organisational goals and objectives within time limit and within budget. It finds
out the best alternative, utilizing the best resources and satisfying their employees at

workplace and develop healthy atmosphere within business firm. As a result, desired
goals and objectives are achieved. Indispensable element or component: Decision is a critical factor for success of any
organisation because without taking right decisions at right time nothing can be
performed according to the plan.
 Facilitate innovation: Logical decisions facilitate innovations. It helps in developing
new ideas, new product, new process etc. this leads to innovation and new decisions help
in achieving competitive advantage to the organisation.
Application of decision analysis
Decision analysis helps in addressing critical decisions in a formal manner. It basically
involves many methods, tools for identifying, and procedures of operation and formally
assessing important aspects of a decisions. Decision analysis is a tool for evaluating complex
alternatives in terms of values and uncertainty. Values are expressed monetarily because
organisation is majorly interested in it (Keysar, Hayakawa and S.G., 2012). It helps an
organisation to find different models and structures and their consequences which can affect the
firm. With this tool analyst can observe different facts and finding of business. It is also an
important communication medium for achieving better understanding between decision maker
and those who advise them. The main purpose of decision analysis is to provide makers with
clarity of action in an uncertain decisions situation.
Decisions which are made can be financial and non-financial. In both cases analyser
makes best decisions to produce best outputs for organisation.
Some of common financial elements have been mentioned below: Net profit value- It is defined as difference between the present value of cash inflow and
present value of cash outflow over a period of time. It helps managers to analyse their
profitability of a project. They can make good decisions to increase their revenue. Internal rate of return- It a tool used in capital budgeting which help in estimating
profitability of potential investment. IRR is an interest at which net present value of all
cash flows from a project equals zero. Average rate of return- It is the amount of profit or return which an individual can
expect in return of an investment made.

 Payback period- It is defined as the length of time which is required to recover cost of
an investment. It is an important aspect which determines rejection and approval of any
project. If any project has longer payback period, then it is not entertained and if any
project has short payback period then it is approved.
 Discount cash flow- DCF helps in estimating attractiveness of an investment
opportunity. In this all future cash flows are estimated and discounted by using present
value (Pettigrew, 2014).
It is very important to make effective decisions which help in increasing in overall
productivity of the company.
2. Judgement issues associated with work
Anite wish to start their business at a fresh location for which it has to take several
decisions related to expansion. There are a number of different sections on which the
administration has to give emphasis on so that galas and objectives are achieved. Planning is
done so that every work is done on time and in the most appropriate manner. As in the referred
organisation decision is taken by different individuals it becomes difficult to reach at the best
suitable solutions. Distinct problems faced by the management while taking the decisions are as
follows:
Selection of best alternative – In an organisation a group of people work together and
their involvement in decision making is important and encouraged so that an effective judgment
is taken. It becomes a complicated task when every person has their own different views on a
common issue.
Management – To start a business at an entirely new location it is required that the
administration of that place is designed in a manner that all the resources are utilised in their best
effective manner. This way it becomes a problem as it increases pressure on the top level to take
all the decisions correct at the first time.
Legal – While reaching at different judgements the referred organisation has to take care
that they follow all the legal requirements. There are certain laws and regulations which are
constructed by the government for different industries and every enterprise falling under the
same has to follow them in order to operate freely (Croskerry, 2013).
Availability of finance – While deciding on a new location another problem that will be
faced is of limitation of funds. People involved in the decision panel has to take care that they

make such plans which can be implemented with the provided funds. This way the pressure of
making appropriate budgets and allocating them in different activities gets increased.
Promotion –there are a number of techniques through which people can be made aware
the new geographical areas the organisation is covering. It is important that the best option is
selected. Since there are a wide range of options which are available deciding on the best
becomes a major concern. Every option has their own benefits and drawbacks and detail analysis
of each is required which further raise the problem of selection.
Geographical and statistic – These components decide the area for business and in
addition number of individuals who can get to. A number of individuals are educated and utilize
advanced stage successfully, subsequently the business action will prosper in business
association (Klein, 2011).
Competitive market – As numerous individuals in Durham are enamoured with utilizing
advanced stage for computerized purposes, it is sure that there will be all the littler scale
association in that part, so the will confront more rivalry the beginning of their business setup.
Durham is where innovation has progressed to a mesh level so the association must ensure that
they have sufficient assets and capacity to contend in the business advertise.
These are a portion of the elements which must be considered while managing diverse
prospects of basic leadership. Thus it will enable the organization to design viably to compete in
focused business condition. Aside from these factor they need to confront certain different
elements which are available in the neighbourhood aggressive market like the way of life,
conduct demeanour and learning.
3 Apply the simple multi-attribute rating technique (SMART) for outlining decision problem.
This Simple Multi Attribute Rating Technique (SMART) must be implemented within
ANITE Software Company for solving and finding decision making process. This is an
analytical and logical approach which helps an organisation in making and governing their
company in a smarter and efficient manner. This approach gives overall idea about new available
alternatives in markets (Hacklin and Wallnöfer, 2012). Through this technique a detailed analysis
is done and formulated in a system manner as well as measured by using some scientific proofs
methods i.e. multiplying sum of performances with weight of criteria. SMART technique is
separated into 9 different stages which helps in facing and finding solutions of existing problems
which occur within organisation. Different phases of SMART process are discussed below:

Stage 1- Identification of Decision makers:
This is most important and essential step within an organisation for identifying the decision
makers who furnish their services for a company in the sector of enlargement of existing firm. It
is a crucial footstep for selecting a capable people for this designation or post who has taking as
well as work for implementing a strong decision for business expansion and future growth.
Knowledge and skills of a person who has been selected as a decision maker plays vital role in
business environment for competing with its rivalry's as well as its decisions will have huge
impact on working atmosphere of employees within organisation (Noohi, Karimi-Noghondar and
Haghdoost, 2012).
Stage 2 – Identification of various issues depends upon the prospect and context of
business:
At this identification stage of issues, elaborated analysis of all relevant issues which exist
within commercial business organisation is done. For expanding an existing business in a new
geographical area as well as demographical areas, so many business, legal and social issues faced
by an ANITE software group which are listed and analysed at this stage of Smart technique. And
these all issues might be existing because of Brexit happen i.e. Britain exit from European Union
Nation during this highly competitive world.
Stage 3 – Identification of Alternatives:
This 3rd stage of Smart technique, is utilized for analysing different results or outcomes of
future business policies and strategies as well as formulate a plan accordingly from outcomes.
Organisation like ANITE must make sure about different relevant available alternatives in
market for their future business which might guide and support them for competing with existing
big or small competitors. By adopting and implementing best suitable alternatives for future
business, this extraordinary step will help a business enterprise in achieving company objectives
and targets in a given time period (Menzel, 2013).
Stage 4 – Identification of Criteria:
This is also an essential step or stage within SMART technique approach because at this
stage, Collection of different criteria as well as combined them for identifying and removing less
viable and suitable criteria for future business. Different criteria arise within business company
during adopting and implementing various different business processes. ANITE software firm
must identify and analyse relevant criteria and listed them accordingly. After identification and

listing process of criteria have done, ANITE must formulated and rated them according their
suitable priorities as well as evaluate all appropriate and best suitable criteria for their
organisation before set up a new business at new location.
Stage 5 -Assigning values for different criteria:
This step of SMART technique is straightforward and unambiguous as it helps in identifying
and giving rankings to different relevant issues rather than providing weight-age according to
their priorities. This is a most crucial step for a business company ANITE to set-up a new
business outlet at new geographical location i.e. assigning values to different ideas and thoughts.
This is regarded most challenging step because a proper brain storming or group action must be
organised within ANITE software firm which creates an environment of lots of opportunities for
various employees or team members to share their views and suggestions as well as exchange
their ideas for setting up a new business outlet at new geographical location within UK (Vohs,
2014).
In the fifth stage of SMART which is most important stage the weight is identified for each
attributes by taking help of respective issues in an efficient manner. This is important to know
the decision maker for separating categorising the alternative via their weight. This would
specifically assist the analytical thinker to identify best and adequate alternative as a result for
the resolving the issues. In regards to this, more weight is rendered for the consistency and
capability which includes 27 and 23% of share effective manner. The decision maker can make
decisions for forming decisions in order to attain sustainable growth.
Alternatives
Weight A B C D E
Attributes
Reliability 27 80 60 30 40 90
Capability 23 50 60 60 80 50
Quality company 22 60 40 80 80 40
Geographical condition 11 90 70 70 30 40
Financial condition 7 60 80 80 50 60
Service 10 30 50 70 70 60
Total 100 370 360 390 350 340
Aggregate 30 26 34 35 33
Reliability 900 750 800 900 850
Capability 650 550 650 650 500
Quality company 350 350 450 400 650

Geographical situation 550 150 350 400 350
Financial situation 150 450 500 600 550
Service 400 350 650 550 400
Total 3000 2600 3400 3500 3300
Stage 6- Determining weight-age of different criteria:
This step will show rating of most suitable and valued criteria within commercial business
organisation. This happens by examine weight-age of criteria for given project as well as it also
analyses weight-age after completion of task. Hence, ratio change according to priority of
projects or tasks which are selected from suitable criteria's. This process is continued till the
given task is not completed according to company's requirements or fulfilments. With the
expansion or growth of commercial business firm, issues will also rise and for overcome these
problems, ratios and dating factors are formulated and implemented in an effective and efficient
manner.
The sixth stage of SMART assessment assist to measure the weighted average of each
attributes along with assigned values. The procedure is controlled two alternatives that are
capability and justifiability are measured in a table showed below:
Alternatives
Weight A B C D E
Attributes
Reliability 27 80 60 30 40 90
Capability 23 50 60 60 80 50
Quality company 22 60 40 80 80 40
Geographical condition 11 90 70 70 30 40
Financial condition 7 60 80 80 50 60
Service 10 30 50 70 70 60
Total 100 370 360 390 350 340
Suppliers A
Attributes Weight Suppliers A Weight*Supplier A
Reliability 27 80 2160
Capability 23 50 1150
Quality company 22 60 1320
Geographical condition 11 90 990
Financial condition 7 60 420

Service 10 30 300
Total 100 370 37000
Attributes Weight Suppliers B Weight*Supplier B
Reliability 27 60 1620
Capability 23 60 1380
Quality company 22 40 880
Geographical condition 11 70 770
Financial condition 7 80 560
Service 10 50 500
Total 100 360 36000
Attributes Weight Supplier C Weight*Supplier C
Reliability 27 30 810
Capability 23 60 1380
Quality company 22 80 1760
Geographical condition 11 70 770
Financial condition 7 80 560
Service 10 70 700
Total 100 390 39000
Attributes Weight Supplier D Weight*Supplier D
Reliability 27 40 1080
Capability 23 80 1840
Quality company 22 80 1760
Geographical condition 11 30 330
Financial condition 7 50 350
Service 10 70 700
Total 100 350 35000
Attributes Weight Supplier E Weight*Supplier E

Reliability 27 90 2430
Capability 23 50 1150
Quality company 22 40 880
Geographical condition 11 40 440
Financial condition 7 60 420
Service 10 60 600
Total 100 340 34000
In this stage there is an individual analysis of suppliers done subject to bifurcate attributes
of suppliers such as readability, capability, quality company, geographical condition, financial
condition and service. Sum of various type if attributes also defined in this respect of suppliers.
Suppliers A such as supplier A retain 37000, supplier B 39000, Supplier C 39000, Supplier D
35000 and 34000 for supplier E.
Stage 7- Weighted Values:
This step utilizes or used for measuring and calculating weighted values of various
available criteria's which are taken previously. This will form bunch of different category issues
like technical or business which allows them collectively to influence various factors among
AGNITE firm. This is the stage in which decision makers create provisions and estimation in
respect of alternatives. As per the calculation given in above scenario it is seen that Supplier A
and Supplier C are considered more reliable and capable.
Stage 8- Making provisional decision:
After identifying and examine different criteria's which helps in governing a business in a
more efficient and smoother way. ANITE has done critical investigation of different criteria's
which may create issues or problems and make a plan for them to implement in a more fruitful
manner. This helps ANITE in taking strong decisions in a better and simplified way.
Alternatives
Weight
Supplier
A
Supplier
B
Supplier
C
Supplier
D
Supplier
E
Attributes
Reliability 100 80 60 30 40 90
Capability 23 50 60 60 80 50
Quality company 22 60 40 80 80 40

Geographical condition 11 90 70 70 30 40
Financial condition 7 60 80 80 50 60
Service 10 30 50 70 70 60
Total 100 370 360 390 350 340
Aggregate 30 26 34 35 33
Alternatives
Weight
Supplier
A
Supplier
B
Supplier
C
Supplier
D
Supplier
E
Attributes
Reliability 100 8000 6000 3000 4000 9000
Capability 0 0 0 0 0 0
Quality company 0 0 0 0 0 0
Geographical condition 0 0 0 0 0 0
Financial condition 0 0 0 0 0 0
Service 0 0 0 0 0 0
Total 100 8000 6000 3000 4000 9000
Alternatives
Weight
Supplier
A
Supplier
B
Supplier
C
Supplier
D
Supplier
E
Attributes
Reliability 0 0 0 0 0 0
Capability 100 5000 6000 6000 8000 5000
Quality company 0 0 0 0 0 0
Geographical condition 0 0 0 0 0 0
Financial condition 0 0 0 0 0 0
Service 0 0 0 0 0 0
Total 100 5000 6000 6000 8000 5000
This is the last stage of SMART which contains the analysis of the sensitivity of task with
effective decision and strategies. There is an evaluation done subject to alternatives. Below are
some charts and tables are prepared which reflect the weight of 100% for reliability and there are

different figures were found such as reliability of supplier A 8000, 6000 Supplier B, 3000 for
supplier C, 4000 for supplier D and 9000 for supplier E.
There are some certain variation also found while considering the capabilities weight of
100%. after weighting 100 to capability various figures come across such as supplier A retains
5000, supplier B retains 6000, Supplier C retains 6000, Supplier D retains 8000 and supplier E
retain 5000 share. There was a cross functional relation established between reliability and
capability.
Stage 9- Performing sensitive analysis:
All leading factors are analysed which give details about complexity and viability of
selected criteria's. This is done with the help of using scientific tools which will found all
positive and negative impacts of selected criteria's and solve them in a easier manner. ANITE
main focus is on improving their performance in wireless technology sector as well as enhancing
their ability also by analysing market scenario (Wahl and Thompson, 2013).
SMART is an important analytical tool or technique for resolving decision making issues of
business activities as well as different dimensions which provide proper results so that an
enterprise might evaluate and plan for future projects which benefits a firm in long terms
specially in the field of financially, socially as well as economically in this competitive world.
4 Strength and weakness of the analysis
SMART (Simple multiple attribute technique) is a linear additive model i.e. it gives overall
value of prescribed alternatives. This technique helps in resolving different decision making
problem by analysing dimension of business activities that are performed and results in proper
output. Company can implement this strategy for effective and productive returns that will
increase eventually sales. It gives a stand to business in the competitive market and helps to
overcome threats present there. Some of the advantages of SMART are given below:
 Easy decision making: As traditional approach is followed in the process, experts are
familiar with the technique and it became easier for them to calculate and retrieve output.
This way less mistakes are done and it becomes easy to reach at correct option (Popil,
2011).
 Analytical approach: Every result concluded is logically proved with exact facts and
figures, hence it gives rise to rational decision making.

 Accurate result: It uses mathematical tool which provide numerical data for calculations
and result in more accurate and precise output. Apart from this it also helps in facilitating
comparison as quantitative data can be easily compared which assist in effective
observation of all the information provided.
 Less complex: In this technique, only one dimension is used to perform evaluation hence
it minimizes complexities and ambiguity in the implementation of model. When there
are a number of options than the complexity of work increases and becomes difficult to
make choice of the best suitable factor (Beach and Lipshitz, 2017).
 Profitability: It gives exact market analysis which means business is provided with all the
threats and opportunities that can affect the growth of business. This way management
can make the arrangements in advance against the possible issue that may rise in future.
The business environment is dynamic in nature and hence it is required that the strength
and weaknesses are identified in advance so that no accordingly planning is done.
Disadvantages:
Complicated process.
Expensive software and tools specially for small scale organisation.
Some factors are unidentified through software tools, so for them manually work is done for
solving.
Time consuming techniques or process.
Have power to diminished employee’s motivation level and confidence.
Might occur different interpretation by different level of management employees or
employers.
This Simple multiple attribute techniques (SMART) process has some advantages as well as
disadvantages (Johansson‐Sköldberg, Woodilla and Çetinkaya, 2013). Which are effectively and
efficiently used as well as implemented in commercial business environment as a critical
analytical tool. Through examination processes, it has been observed that this techniques or tool
will guide and support ANITE company for setting up a new business outlet at new geographical
location within UK (). SMART techniques will help in formulating a proper planning of solving
different issues which exist due to adoption of suitable criteria's. This tool is equally important
for internal as well as external environment specially in this highly competitive digital world.
Conclusions

It's very important to understand that decision making is a crucial step within business
organisation or environment. By formulating and implementing SMART as a critical analytical
tool for ANITE software firm. This technique will also help in evaluating different perspective of
different employees within business environment. This is a scientific mathematical tool for
analysing different factors which required for setting up a new enterprise at new geographical
location within UK. This must be concluded that this technique has both pros and cons for a
business enterprise. So before implementing in real market world, organisation must ensure
about its viabilities.

REFERENCES
Books and Journals
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engineering and management (Vol. 81). John Wiley & Sons.
Starcke, K. and Brand, M., 2012. Decision making under stress: a selective review. Neuroscience
& Biobehavioral Reviews.36(4). pp.1228-1248.
Keysar, B., Hayakawa, S.L. and An, S.G., 2012. The foreign-language effect: Thinking in a
foreign tongue reduces decision biases.Psychological science.23(6). pp.661-668.
Pettigrew, A.M., 2014. The politics of organizational decision-making. Routledge.
Croskerry, P., 2013. From mindless to mindful practice—cognitive bias and clinical decision
making. N Engl J Med.368(26). pp.2445-2448.
Klein, G.A., 2011. Streetlights and shadows: Searching for the keys to adaptive decision making.
MIT Press.
Hacklin, F. and Wallnöfer, M., 2012. The business model in the practice of strategic decision
making: insights from a case study. Management Decision. 50(2). pp.166-188.
Noohi, E., Karimi-Noghondar, M. and Haghdoost, A., 2012. Survey of critical thinking and
clinical decision making in nursing student of Kerman University. Iranian journal of
nursing and midwifery research.17(6). p.440.
Menzel, S., 2013. Are emotions to blame?—The impact of non-analytical information
processing on decision-making and implications for fostering sustainability. Ecological
economics. 96. pp.71-78.
Vohs, K.D., 2014. Making choices impairs subsequent self-control: a limited-resource account of
decision making, self-regulation, and active initiative.
Wahl, S.E. and Thompson, A.M., 2013. Concept mapping in a critical care orientation program:
A pilot study to develop critical thinking and decision-making skills in novice nurses.
The Journal of Continuing Education in Nursing. 44(10). pp.455-460.
Popil, I., 2011. Promotion of critical thinking by using case studies as teaching method. Nurse
education today. 31(2). pp.204-207.
Beach, L.R. and Lipshitz, R., 2017. Why classical decision theory is an inappropriate standard
for evaluating and aiding most human decision making. Decision Making in Aviation,
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Johansson‐Sköldberg, U., Woodilla, J. and Çetinkaya, M., 2013. Design thinking: past, present
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Pelaccia, T., 2011. An analysis of clinical reasoning through a recent and comprehensive
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