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Analytical Thinking & Decision Making - Desklib

   

Added on  2020-06-05

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Analytical Thinking andDecision Making

Table of ContentsINTRODUCTION...........................................................................................................................1Q1 The importance of decision making and application of decision analysis............................1Q2 Decision Problem faced by Sainsbury..................................................................................3Q3 Simple multi-attribute rating technique (SMART) for Sainsbury........................................5Q4 Strength and weakness of SMART analysis.......................................................................11CONCLUSION..............................................................................................................................13REFERENCES..............................................................................................................................14

Index of TablesTable 1: Value Tree analyzing benefits and drawbacks..................................................................7Table 2: Value and weights for alternatives and attributes..............................................................8Table 3: Calculating weighted average value..................................................................................9Table 4: Calculating Normalized value........................................................................................10Table 5: Value and weight for sensitivity analysis........................................................................10Illustration IndexIllustration 1: A value tree showing benefits and drawbacks of Sainsbury.....................................7Illustration 2: A value scale for Efficiency......................................................................................8Illustration 3: Weight placed on efficiency ...................................................................................11

INTRODUCTIONDecision making is the process of making choices by identifying a decision, gatheringinformation, and assessing alternative resolutions (Mulliner, Smallbone and Maliene, 2013). Inaccordance with this context, the present report will cover the aspect of decision-making and theapplications of decision analysis in regards with Sainsbury. Sainsbury is the second largest chainof supermarket in United Kingdom. The organisation specialises in grocery and retail productsand services. Organisation is facing issue in generating profits and productivity. In this context,this report will analyse and identifies the importance of decision making and the application ofdecision analysis. The decision problem which is reduction in the profitability of the organisationwill be analysed in this assignment. The use of simple multi-attribute rating technique (SMART)in this report in order to outline the decision problem faced by Sainsbury. Eventually, thestrengths and limitations of the analysis will evaluate in context of decision problem.Q1 The importance of decision making and application of decision analysisDecision making process is one of the crucial and important process which is taken bythe top management of the organisation to provide benefits to the business (Fenton‐O'Creevy,Nicholson and Willman, 2011). In today's world decision making plays vital role in theorganisation. In order to sustain in the competitive environment and generate more profitsefficiently, it is important for the management of Sainsbury to make decision precisely andadequately (Subramoniam and et.al., 2013). The productivity and profitability of the organisationis totally depends upon the dignity of decision made by the top management of the organisation.There are many situations which are uncertain and in order to avoid any risks or avoid chances ofdamage to the business, effective decision making process is necessary. It is important tounderstand that business decisions can’t be made in isolation (Dane, Rockmann and Pratt, 2012).The process of decision making requires critical and analytical thinking from top managementand range of decision making tools and methods of analysis utilised by the companies in order tomake sure that the decision taken is profitable for the organisation in short as well as in long run.In order to accomplish the desired goals and objectives of the organisation, it is veryimportant for the management to make decision precisely and appropriately which fulfils thecriteria and develop a path on which organisation can move forward towards growth anddevelopment (Schmoldt and et.al., 2013). Decision making and analysis is vital and essential forbusiness organisation and it hugely contributes toward ensuring brand's overall success. The1

decisions taken by the management of Sainsbury requires to be efficient and must be based ontheoretical and statistical analysis (Pearson, 2013). Decision making process is the criticalprocess which is made by the top management of the organisation in order to promulgates theproduction capacity and growth of business. Decision analysis method is used after a businessdecision is finalised, this method allows the business to analyse the decision which has beenfinalised (Fish, 2011). Decision analysis is a broader quantitative field which uses differentmodels and statistics in order to analyse and optimise business decisions which are taken bymanagement of a company. Decision making and analysis is important as it assists themanagement of the organisation to tackle the impact of complex circumstances and aid inreducing the risk and future uncertainties (Henrich, Heine and Norenzayan, 2010). Several applications of decision analysis are utilised by the top management which istotally based on the situations and circumstances faced by the organisation (Daellenbach,McNickle and Dye, 2012). The basic elements of decision making is used for resolving thecomplex problems and in this way decision analysis is utilised to address subsets of problems.The decision maker concentrate on the issue that negatively impacts on the growth of thecompany and make efforts and strategies in order to obliterate those issues efficiently (Provostand Fawcett, 2013). Thus, it implies that decision making process and decision analysis is thecrucial process that aid in generating more profits and sales by increasing the satisfaction of bothcustomers and employees and also leads the organisation on the path of growth and development(Somech, 2010). There is additionally inventive deduction in decision making as the decisionmaker produce different strategies and furthermore create elective methodologies. In any case,perceive that the consequences of the decision examination are restrictively prescriptive (Salas,Rosen and DiazGranados, 2010).Top management of organisation collects and gather all the data and information whichare required to formulate effective decision (Saaty and Peniwati, 2013). This helps themanagement to acquire the information relating with the resources, inventory, monetary positionof the organisation and after analysing those informations, the top management of companygenerate efficient decision. This is imperative on the grounds that decision maker would thenable to recognise basic data then required (Croskerry, Singhal and Mamede, 2013). Moreover,decision making process helps the management to reduce or eliminates the problems thatdisturbs the functioning of the corporations adequately. Likewise, the decision maker must be2

clear and unequivocal and clear about the judgements they make for each of the subsets of thechoice issue (Gigerenzer and Gaissmaier, 2011). The decision makers and analytical thinkersfocuses on the issues that impacts on the growth of the business corporations. They carefullystudy the effects of those issues and then generate efficient strategies in order to resolve themefficiently (Zhong, 2011). Thus, it implies that process of decision making is equally importantand essential for the growth and development of the organisation. It is important to use thismethod for analysing business decisions as it allows the management to evaluate decisions on thebasis of its qualities as measurement is done regarding expected consequences and preferences ofdecision maker (Capretz and Ahmed, 2010). In case of Sainsbury, the management needs toformulate effective decisions and evaluate the impact of those decisions efficiently so that theorganisation can develop a path of success and can move forward by generating more and moreprofits.Q2 Decision Problem faced by SainsburyThe profitability of Sainsbury is the major decision problem that has been identified. Theorganisation profits are diminishing constantly since last three years. The management anddecision makers analysed the rationale for the diminished profits and identified variousalternatives in order to resolve the issue appropriately (Gregory and et.al., 2012). Beforeproceeding to the alternatives it is important to get educated about the attributes that guide thecompany towards profitability. The two important attributes are discussed below:Top Management: All the policies, procedures, rules, code of conducts and importantstrategies are implemented by the top management of Sainsbury. These policies helps theorganisation to work ethically and efficiently so that more and more products can bedelivered to the customers and profits of the organisation can be increased simultaneously(Stolper and et.al., 2011).Efficiency: Efficiency is an intangible attribute. It is the capabilities of using theresources employed in the organisation in a way in which the effectiveness of quality ofproducts and services can be increases (Pettigrew, 2014). In order to generate morerevenue and profits it is important for the management to concentrate on the efficiency ofthe company.Below are the list of alternatives which has been identified by the decision makers and analyticalthinkers of Sainsbury. These alternatives can help in making effective decision that will guide3

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