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Business Decision Making Assignment | Business Environment Assignment

   

Added on  2020-06-04

12 Pages4913 Words62 Views
Table of ContentsINTRODUCTION...........................................................................................................................2PART 1............................................................................................................................................2ESSAY ......................................................................................................................................2PART 2...........................................................................................................................................5CASE STUDY: Tesco PLC........................................................................................................5CONCLUSION...............................................................................................................................8REFERENCES: ..............................................................................................................................8

INTRODUCTIONToday in the ever competitive business environment, every business must have effectiveand efficient managers’ capable of profitable long-term decision making. Decision making is animportant process for a company in which a selected number of actions are taken among severaldifferent alternative scenario. There are positive, as well as negative, affects of strong and weakdecision making in companies (Aarikka, Stenroos and Jaakkola, 2012). There four importantconcepts which are used while making decisions such as Problem definition, Solution generation,Solution evaluation, and Implementation planning. The managerial decision-making process includes critical steps which play a vital role inthe business of any organisation in the long term for future proofing a company. These steps arepurpose identification, information gathering, selection of alternatives according to principles,analysing the choices and brainstorming, alternatives evaluation, pick the best alternative,decision executions and results evaluation . Two main models like normative models and rationalmodels are adopted by managers whilst going through this process. In the following reportdecision making theories and role of bias will be discussed. PART 1ESSAYDecision making is a type of ‘game-changer’ involving competitive advantages forbusiness organisations. When a human theorises to solve a particular problem or issue, in a bonafide business situation it takes much more effort. A manager of a company has to take measuredsmart actions so that the business can benefit in the long term. He uses four very crucial conceptswhile making any type of decision for the company (Albright, Winston and Zappe, 2010). Theseessential concepts are theories that identify the problem, generate a solution among allalternatives, evaluate the solution and plan to implement. The following the explains theseconcepts.1. Problem definition-This is the first and most important concept of manager decision making. This includesidentification of problem and defining its nature, components and process. A problem is asituation which is harmful or bad for the business side of an organisation over the long term, aswell as the short term. The components of problems include the problem-solving phase in whichthree major steps are used. The first step of the problem-solving process is identification of theproblem. In this step, the situation is diagnosed so the current process of the company can bereviewed and the nature of problem can be detected. The second step is the solution generation inwhich the manager adopts one solution alternative among several actions. After choosing thesolution, its pros and cons are evaluated so that its impact can be estimated.The final step of theproblem-solving phase is the planning of its implementation and its execution in a practicalsituation within the organisation. The chosen alternative is applied to the company and its tasksor activities by manager. There are three types of problems which enterprise of every size face.These three types are Simple vs. complex problem, Static vs. dynamic and Structured vs. illstructured problems (Anderson and et. al., 2015). The first types of problem are simple, and areeasy to handle. These simple problems are quickly overcome by the manager. On the other hand,the complex problems are hard to get rid of and they can potentially harm many businesses. Thesecond type is a static problem which occurred once and is rectified when solved efficiently by2

the manager. On the other hand, dynamic problems which regularly occur will require aresolving solution. Another type of problem is structured, in which each step is clearly explained,and are easy to solve. Another way to define problem is to analyse ill structured problems.These type of problems lack information which makes vague solutions.There are some tools which are used for problem-solving within companies. One of theimportant tools is SWOT analysis or internal analysis, in which strength or strong areas oforganisation are identified, and weaknesses or risks involved, are also explained in this analysis.Another element incudes potential or new opportunities and threats related to suppliers , newentrants, and customers buying power for business in the market. PESTEL analysis or externalanalysis includes some factors such as political, social, economical, environmental andtechnological .Value generation analysis is also used as a tool in problem solving in which theactivities of the company are analysed.2. Solution generation-This is the second concept of manager decision making (Anton, 2015). This conceptprovides various techniques which can help in solving a particular problem or difficult situation.Some of these major techniques are brainstorming, brain writing, fish-bone diagrams and mindmapping. Brainstorming involves divergent thinking by the manager. It focuses on the quantityof the idea, rather than the quality of the idea. It is applied when a non-critical or non-evaluativeatmosphere is required at a workplace. This tool includes four essential steps in which firstly theproblem is stated in clear words and a time limit defined. After which rules are established inwhich piggybacking is encouraged. In the third step, offered ideas are recorded on a Whiteboardor Flip Chart. The final step includes a review of all ideas and is conducted for idea clarificationand implementation (Bolwig and et. al., 2010). Along with these uses, there are some limitationsof brainstorming. For example, it has introvert ideas are limited in numbers and require a timeconsuming set up time.Brain writing is another tool for solution of problem in business organisations. This toolis an alternative to barnstorming as it provides more opportunity for members to work on theirown ideas. As, it does not dependent on members extraversion. It is applied when there isconflict amongst employees, or group think effect is dominate. There are four types of variationsin brain writing like brainwashing pool ,brain writing 6-3-5, idea card game and the brain writinggame. One limitation is that it is very time consuming for manager. The third tool for problem solving is the fish bone diagram which is also called, a cause andeffect diagram. This tool explains some of the reasons for problems and their impacts on the3

business of the company. This tool is applied when the root cause of problem can be identified.This tool has multiple sessions and connections between effect and cause (Curtis and Scheurer,2010). One limitation of this tool is it provides the cause and effect of the problem only, not thesolution which is the essential part of problem solving. The Fourth and final tool of problem-solving is mind-mapping which shows the connectionsamongst words, ideas and concepts. This tool is used in solving a problem, informationmanagement and implementation. This tool includes many arrows colours and lines to show thevarious kinds of links in the diagram. Thus, these are included in problem solving throughgenerating the best solution.3. Solution evaluationThis is the third concept in manager decision making. This concept includes some majortools and techniques which play a pivotal role in evaluating the solution. Some of them areAffinity diagram, Categorisation, elimination and ranking, Screening matrix, Decision matrix,and Pareto analysis. The Affinity diagram is a technique in which information is collected andorganised in a particular manner. It helps in identifying and analysing issues during divergentthinking. This tool motivates all members to participate in evaluation process. In this tool, allcomplex ideas are sorted into small groups which are easier to understand.The second tool of solution evaluation is categorisation, elimination and ranking. Firstly,all ideas or information are put in a separate relevant category. Unnecessary or irrelevant ideasare removed. The top five ideas are ranked, from top to last, and implemented according toranking. On the basis of voting of the members, the final ideas are achieved (Fearne, Garcia andDent, 2012). The Third tool of evaluating the solution is the Screening Matrix. This method providestransparent ideas which fulfil the criteria in solving the problem. It represents the most suitableidea to solve problem which the manager faces. The best conditions to use this method is when itis compulsory to conduct a critique of ideas. The main rule of the tool is mutual agreement ondecision making by private or public voting for members. There are some steps in screening thematrix from which the first step is to identify the two most crucial criteria and each solution israted for criterium. After this rating, the idea finally placed on top gains the highest rates fromboth sides achievable. The fourth tool is the Decision matrix in which a set of information is collected and the strengthof their relationship is analysed and rated by the team or individual. This determines the decisionfactors which can affect the long term agreed decisions. This tool is useful for improved projectand designing remedies. Last, but the most important tool for generating solution, is Paretoanalysis. In this method, 80 percent of effects are produced by 20 percent reasons or causes.Thus, these above tools help in generating the best solution of the problem for the workplacemanager.4. Implementation planning of problem solutionAn implementation solution used for the improvement and development of a projectinvolving key elements for implementation includes planning of work, task, sub-tasks, time andresources. 4

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