Decision Making in Organizations

This assignment delves into decision-making processes employed by organizations, particularly highlighting their application within the Asian business context. It analyzes various decision-making models and strategies, drawing upon academic literature and real-world examples like Marks & Spencer's operations in Asia. The analysis aims to shed light on the complexities of decision-making in organizations, considering factors such as ethical considerations, stakeholder perspectives, and the influence of technology.

ANALYTICAL THINKING AND
DECISION MAKING

Table of Contents
INTRODUCTION...........................................................................................................................1
Company Background............................................................................................................1
1. Uses and importance of decision making...........................................................................2
2. Determining decision making obstacles in organization....................................................5
3. Evaluation of SMART technique in order to overcome decisional barriers......................7
4. Analysing strength and limitation of decision problem analysis........................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Decision-making can be considered as one of the most important part of modern
organizational process. It supports entities in analysing situation of the firm and making sound
decision for the growth of entity. Present study is based on Marks & Spencer (M&S) which is a
British multinational fashion retailer (Ford and Richardson, 2013). Company was founded in the
year 1884 and currently its headquarters is in London, United Kingdom. Current assignment will
discuss decision-making process of M&S. It will pay attention to significance of business
decision making in order to get desired output. The success of Marks & Spencer is highly
depended upon its outsourcing partners. Cited firm offers branded quality clothes with the best
designs to consumers. For the growth of entity, it is essential to select right outsourcing partners
so that organization can fulfil needs of consumers.
Furthermore, report will give detail about business problems and its impact on
performance of Marks & Spencer. In addition, various stages and outputs of analysis will be
outlined in this assignment. At the end of study, strength and weakness of analysis process will
be discussed in this report in order to understand reliability and accuracy of decisions of the firm.
Company Background
Marks & Spencer (M&S) is the leading fashion retail which operates its business across
the world. Its main agenda is to provide satisfactory products and services to clients and make
them loyal towards the brands. Approximately 24 million buyers shop from its retail shops every
week and around 2 million customers shop from online medium. Cited firm has 798 stores in
United Kingdom and approximately 455 physical outlets across the world (WHY USE M&S FOR
BUSINESS?, 2017). It is also engaged in e-commerce and consumers can buy clothes from its
website. Moreover, quality of fashionable products attracts new customers towards the brand. It
offers clothes to all men, women and children.
Cited firm manufactures cloths carefully so that its operations do not impact on its
development. The workers those who are manufacturing clothes for the organisation are
employed in Bangladesh and India (Asian workers manufacturing clothes for Marks and Spencer
being paid less than living wage, 2016). M&S ensures that suppliers pay fare wages to its
employees so that skilled staff members can be retained at the workplace for longer duration and
contribute well in producing quality products.
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1. Uses and importance of decision making
As per the view of Pettigrew, (2014) decision making can be defined as responsibilities
of management for progress of the company. Significance and uses of decision making in the
organization are as following:
 Growth of entity: Growth and success of an organization is much more depended upon
the decision taken by higher authorities. With the help of efficient judgement, entity can
manage its risk well and can avoid future complications in an effective manner. Marks &
Spencer is engaged in the fashion retail industry. Suppliers supply cloths to the company
as per the consumer's requirements. Management of M&S is required to make sound
decision and have to guide its suppliers well about designing requirement in clothes. This
is the only way through which entity can satisfy needs of its valuable customers and can
make them loyal towards the brand. In the absence of good decision, company cannot
meet with the needs of buyers, in such condition overall profitability of corporation may
get negatively affected.
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Illustration 1: Use of decision making
Source: (Decision Support: Connecting Science, Risk Perception, and
Decisions, 2017)
 Gaining market opportunities and minimizing threats: Decision making is the
managerial function. Managers have to ensure that their decisions should be beneficial
for the organization (Kaner, 2014). Decision taken by managers of M&S can help the
firm in gaining market opportunities and minimizing threats to great extent. There are
many uncertain situations that may arise in the business any time. It is the responsibility
of managers to forecast these risks and make contingency planning in order to minimize
negative effects of these issues. It is only possible through effective decision-making
process. Before making any judgement in the workplace, higher authorities need to
conduct market research and have to analyse current situation of the company. With the
help of this tool, entity will be able to measure the facts and will be able to make sound
decisions for the growth of the organization.
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 Sustainability: decision making is the critical process in which managers need to have
analytical thinking skills. In order to make sound judgement, they take support of many
tools and methods (Samset and Christensen, 2017). With the assistance of these
techniques, higher authorities become able to make profitable decision for the welfare of
the business unit. It supports the corporation in gaining long term success in the market
and sustaining in the market for longer duration. Decision making process ensures that
entity can gain success and can accomplish its objectives. However, decision analysis is
the major tool in which managers or decision makers of the organization ensure that
particular judgement can give positive results to the organization. This technique assists
in identifying complex situations and minimizing adverse effects of uncertainties.
 Find out cause of problems: before making any decision for the corporation, it is
essential to have deep understanding about issues and causes of the problems. Examining
situation well is the major tool that can support the managers in identifying the current
situation, causes of these problems (Anderson and et.al, 2015). This analysis can assist in
creating correct game plan through which such type of issues can be avoided. Marks &
Spencer is the retail firm, therefore, for the entity, it is essential to analyse market
situation and accordingly, it has to modify its operations so that overall goal of the firm
can be accomplished. Before making modification decision, decision makers need to
ensure that through this judgement they can improve performance of the organization to
great extent.
 Enhancing business efficiency: one of the key element of decision making and analysis
is to separate issue into sub sections. This can help in understanding the problem in an
efficient manner and making sound decision for the growth of the firm. Audit procedure
is the great tool for decision analysing (Kaliannan, 2018) . That aids in identifying
situation deeply and finding out root cause of the issue. By this way, auditors can give
outline about the business problems that can cause difficulty in business in the future. By
considering these outlines, decision maker can make good judgement that can help the
firm in gaining success and accomplishing its objectives soon. It is essential for Marks &
Spencer to ensure that their decision can give positive results to the entity. Managers of
the cited firm have to ensure their decision and have to evaluate it properly. This can help
in taking appropriate action against the risk or problems. Wrong decisions can affect
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business operations negatively and can impact on its brand image as well. By this way,
M&S may lose its market position and its profitability can be decreased. Thus, it is
essential for the entity to make proper analysis of pros and cons of the decision before
implementing it into the workplace.
2. Determining decision making obstacles in organization
One of the major problem is in the M&S is production outsourcing. It is essential for the
cited firm to make sound decision regarding selection of outsourcing company for its
manufacturing of cloths. There are number of options available to the entity, there are many
firms where manufactures provide quality cloths designs at affordable rates (Bhattacharya and
et.al, 2014). Whereas other manufactures offer unique features in the cloths designing as per the
market trends. Hence, it is essential for the M&S that to evaluate alternative sourcing in respect
to production and manufacturing. After evaluating each option company needs to finalise their
outsourcing partners.
Before making any decision it is responsibility of the managers that to evaluate cost as
well and also individual needs to pay attention of production impact on surrounding as well.
Decision maker needs to concentrate on cost associated with raw material alone with impact of
production. They need to add logistic cost and expenses related to labour (Aruldoss, Lakshmi
and Venkatesan, 2013).
India and Bangladesh are two manufacturing countries from where Marks & Spencer get
its material. Both these places offer cheap and quality cloths to the organization as compare to
other countries. As India is the nation where cheap labour is available and manufactures do not
have to pay good salaries to the staff members. Thus, this could be the best outsourcing partner
for the marks & Spencer because by this way entity will be able to get cheap material and it will
be able to earn high profit (Yates and et.al, 2015). Decision analysis is the process which is
generally applied in the workplace in order to identify problems in the workplace. By identifying
problems higher authorities can make effective decision in order to resolve issues of the
business. It is the great tool through which corporation can get desired output and it can
accomplish its objectives soon. One of the main agenda of the M&S is to attract new customers
and enhance its profitability. If company offers quality cloths products to its clients at affordable
rates then it can be able to attract more buyers (Fiocchi and et.al, 2015). This will support the
organization in increasing its sales revenues and sustaining in the market for longer duration. By
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getting quality products at affordable rates consumers will feel satisfied and individual will
become loyal towards the brand. It can support the firm in gaining competitive advantage and
meeting with its organizational goal soon.
Currently M&S gets fashionable cloths from European partners due to which its expenses
are high and it has to spend more amount for further operations. It is considered as one of the
biggest business problems in the organization (Velasquez and Hester, 2013). For resolving this
problem and make control over its expenditures Marks & Spencer needs to take support of
Indian manufactures those who can provide quality goods at minimum cost. By this way
operational expenditures of the entity can get minimized to great extent and it will be able to earn
high profit.
There is significant relationship between issue and business performance. By considering
the business problem it is analysed that currently M&S's outsourcing partner is European
manufacturers those who charge $12 for manufacturing of cloths. Whereas there are other
manufacturers such as Indian manufactures charge $8 and Bangladesh manufactures charges $10
for production of goods (Marzband and et.al, 2016). Hence, it would be better decision for the
cited firm that to make contract with or make partnership with Indian or Bangladesh
manufacturers. By this way it would be able to produce quality cloths at affordable rates.
Apart from looking at the manufacturing cost, entity is required to pay attention on
financial transactions as well. It needs to look upon credit limit offer by the manufacturer. Higher
authorities needs to make business decision by considering credit limit offer by the outsourcing
partners. This will help the firm in getting material on credit and using existing financial
resources for further operations (Hammond, Keeney and Raiffa, 2015). By this way corporation
will be able to earn high profit and it will support the organization in sustaining in the market for
longer duration. Cost analysis is the important factor that needs to done properly. By this way
M&S will be able to make sound decisions for the growth of the firm.
For making sound decision in the organization higher authorities of M&S can take
support of tree analysis technique. This tool will support the firms in identifying results and
consequences face by the firm after implementation of decision. It starts with analysing decision
tree in which managers have to identify uncertainties in the business. According to uncertainties,
higher authorities of cited firm have to make decisions (Cascetta and et.al, 2015). It will help the
entity in getting desired output and accomplishing goal of the corporation. According to the risk,
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managers have to develop strategy and have to do sensitivity analysis. This will help the firm in
making profitable decision and gaining success in the market.
3. Evaluation of SMART technique in order to overcome decisional barriers
The Simple Multi-attribute rating technique (SMART) of decision analysis is considered
as one of the suitable technique for analysing decision in effective manner. It is the great tool that
supports in making sound decision with multiple objectives. By this way higher authorities can
get holistic view of problem and can break the issues in sub parts (Velasquez and Hester, 2013).
After separating it into sub sections decision maker can do deep analysis in order to make sound
decision for the growth of the organization. In order to analysis the decision for Marks &
Spencer's outsourcing strategy, managers need to look at the other options such as India,
Bangladesh etc. and also have to look upon the manufacturing cost in each place. As India is
considered as best outsourcing partner for the M&S in term of credit limit cost and quality.
Various stages for analysis the decision are explained as below:
Stage 1: identify decision maker
Marks & Spencer is the leading brand in fashion industry. It wants to expand its
operations across the world. Higher authorities of cited firm pays more attention on fast- fashion
strategy. In order to enhance profitability of the company cited firm has spread its products
worldwide (The Simple Multi Attribute Rating Technique (SMART) , 2014). It has supported the
firm in increasing its sales revenues and company has become able to gain competitive
advantage.
Stage 2: Alternative course of action
Alternative outsourcing option for Marks & Spencer is such as India, Bangladesh, China,
Turkey etc. these options will help the firm in reducing its expenditures and increasing its profit.
Statistics show that labour cost in India is 106.70 whereas labour cost in Bangladesh is 46.0. In
respect to other outsourcing partners, Portugal has 649.83 and Turkey has 368.00 labour cost
(Velasquez and Hester, 2013). Thus, by considering these cost M&S needs to make sound
decision to build contract as outsourcing partners for manufacturing of goods.
Outsourcing location
Labor Cost
in Euro / Month
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India 106.70
Turkey 368.00
Bangladesh 46.00
China 294.94
Table 1: Labour cost in countries
Stage 3: Relevant attributes
It is the next phase in which leaders or decision makers of the company can take support
of tree examination. This will support managers in recognizing quantifiable for each attribute.
This will help in identifying labour cost, yarn cost, logistic cost in different countries. By
identifying unique characteristic manager of the firm can make accurate decisions to resolve
problems of the company (Hammond, Keeney and Raiffa, 2015).
Countries Labour
Cost
$
Yarn Cost
$
Logistic
Cost
$
Total costs
$
India 106.70 2.97 950.00 1,059.67
Bangladesh 46.00 3.21 1187.00 1,236.21
China 294.94 2.66 1150.00 1,447.60
Table 2: value tree of outsourcing locations
Stage 4: Assigning values to each attributes
It is next phase in which M&S have to measure the cost with qualities. Company can take
support of two ranking methods: coordinate rating and soling out esteem capabilities (Fiocchi
and et.al, 2015).
Name of Countries Duty Quality Customer
satisfaction CSR Comfort
Closeness
to
buyer
India 0 3 3 2 2 3
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Bangladesh 1 4 4 4 3 4
China 0 5 5 5 5 5
Table 3: Ranking attributes
Stage 5: Determining weight of each attribute
It is the next phase in which managers of the organization are required to determine
weight of each attribute. Decision makers need to look upon these attributes and have to develop
value. As in the year 2009 fashion industry has faced huge issue, fashion retailers were
struggling to run their business. Dollar became weak as compare to euro that has affected
situation of the companies to great extent. Thus, it is essential for the managers that to look upon
the economic conditions and forecast risk effectively (Kaliannan, 2018).
Stage 6: Calculation of weight average
It is the next stage of SMART decision analysis technique in which managers have to
calculate weight average of values of each options. That helps in comparing the values . Through
which way decision maker can develop better understanding about the issue and can take sound
decision for the growth of the Marks & Spencer (Ford and Richardson, 2013).
Stage 7: Making a provisional decision
It is the phase in which decision makers can make provisional decisions. The options
which are outperformed they can be eliminated from the options.
Stage 8: Sensitivity Analysis
It is the last phase of SMART decision analysis technique in which higher authorities of
the business unit examine each alternative option and examine impact of changes on the
organization. With the help of this tool individual can analysis the best option that can give
positive results to the M&S. Sensitivity analysis is considered as integral part of solution
methodology. It explains that managers of the company can not understand situation without
having adequate information about it (Samset and Christensen, 2017). Through this sensitivity
analysis it can be explained that most preferred outsourcing parter for the Marks & Spencer
would be Portugal because it is located near to the place and its logistic cost is nominal.
4. Analysing strength and limitation of decision problem analysis
SMART decision analysis technique is considered as one of the simplest way to analysis
the decision and make sound judgement for the growth of the company. It pays attention on two
major assumptions: utility independence and preferential independence. This structure is quite
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same as traditional CBA method so it is easy to utilize by decision makers. It is the great tool that
systemically creates components that can help in analysing multi faceted problems. It is the tool
which measures values and pays attention on uncertainties (The Simple Multi Attribute Rating
Technique (SMART) , 2014). It has positive side of straightforwardness appears that helps in
keeping the analysing process truly standards.
Strength and weakness of SMART
Simple Multi attributed value function is considered as one of the best approach that is
generally applied for outsourcing issues. It helps in analysing situation from hypothetical and
common-sense point of views. With the help of this tool decision makers of M&S can develop
well-informed policy decisions. Marks & Spencer is the leading multinational fashion retailer.
For such type of firm SMART decision analysis tool is the best approach because it looks at the
problem from multiple objectives (Cascetta and et.al, 2015). On other hand there are some
limitation in the analysis technique. One of the main drawback of this tool is that rapid decision
making is done in this process. For analysing the decision manager s are required to understand
the situations and cause of problems properly. According to the level of issue they have to make
their judgement. But this SMART analysis method take rapid decisions which can be sometimes
negative for the entity. In addition, it implements cognitive process of people in order to make
decision to resolve issues in the business (Hammond, Keeney and Raiffa, 2015). But this
cognitive process has limitation in respect to output.
It is the process in which different attributes are being emphasized by various people in
order to make sound decision for resolving problems of the organization. But due to involvement
of many people conflict situation may take place. By this way decision makers some times fail to
make effective judgement for the growth of the corporation. As there are many people involve
in the decision making process so measurements of various people vary person to person.
SMART decision analysis tool also have some draw back. In this technique experts may make
mistake in collecting information and meeting with required criteria (Velasquez and Hester,
2013). As it is based on the subjective judgement so there is high chance of happening
irregularities. Due to this problem decision makers may get failed to collect relevant information
and analysing situation well. SMART analysis is the technique which is related with the direct
ranking method. As it is simple in nature so decision maker can apply it in order to make
accurate judgement for the growth of M&S. It is the technique which uses alternative weight
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profiles and appropriate profit is being picked out by the concern authorities. After that this
picked profile is being further analysed in order to make sound decision for the success of
business unit (Hammond, Keeney and Raiffa, 2015). Thus, it is time consuming process and
some times decision maker gets failed to find out the best alternative option out of many. On
other hand it is progressive in nature so individual can find out the causes of problems and can
analysis each solution properly. After that decision maker can make sound business decision that
can support entity in gaining success in the market. With the help of this tool M&S will be able
to resolve its outsourcing issues in effective manner.
CONCLUSION
From the above discussion it can be concluded that decision making is the best
approach that can help the entity in gaining success. Sound decision making is the only approach
through which organization can minimize uncertainties and can accomplish its objectives in
effective manner. From the SMART decision analysis technique it can be articulated that
outsourcing partnership with India can be the best outsourcing option for the Maks & Spencer.
By this way it would be able to minimize its total cost and would be able to enahnce its
profitability. By making partnership with Indian manufacturers M&S can save 20% cost and can
conduct operations in effective manner. This can support entity in spreading its brand image
across the world and satisfying needs of consumers as well. From the sensitivity analysis it can
be concluded that political changes can take place any time. These sensitive issues impact on the
business unit to great extent. So in that situation cited firm needs to go with Turkey or it can
select it as alternative outsourcing option. That would assist in reducing logistic cost and
increasing revenues of the organization.
SMART analysis is considered as successful application. That can support the firm in
making effective decisions for the welfare of corporation. Best option for manufacturing of
products would be India for Marks & Spencer. Labour charges is minimum in this nation due to
which overall production price gets reduced by 70%. This can support the organization in
accomplishing its goal easily and earning high profit.
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REFERENCES
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