Decision Making in Business

This assignment delves into the crucial topic of decision-making within a business context. It requires students to analyze different decision-making models, such as rational, bounded rationality, and intuition-based approaches. The assignment encourages critical thinking by presenting real-world case studies and challenging students to apply these models to solve business problems. Furthermore, it emphasizes the importance of considering various factors like risk, ethics, and social responsibility when making strategic decisions.

Business Decision Making

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1. 1 Use of plan in collecting data through primary and secondary format...........................1
1.2 Use of sampling method and survey methodology..........................................................2
1.3 Use of questionnaire in relation to data............................................................................3
2.1 Creation of information on the basis of questionnaire.....................................................4
2.2 Use of mean, median and mode and its analysis..............................................................5
2.3 Analysis of data using measure of dispersion with including standard deviation............6
2.4 Benefits of quartile, percentile and correlation coefficient in business context...............7
TASK 2............................................................................................................................................8
3.1 Preparation of charts, graphs in making a valid conclusion.............................................8
3.2 Creation of trend lines in future forecasting...................................................................12
3.3 Business presentation.....................................................................................................14
3.4 Formation of formal business report to senior authority................................................14
TASK 3..........................................................................................................................................14
4.1 Information processing tools advantages to beneficial decision making.......................14
4.2 Formation of critical path management..........................................................................15
4.3 Benefits of financial tools in relation to make beneficial decision................................16
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................19

INTRODUCTION
Making a good decision in a business is not a easy task and its success is only depend on
the right decision framing. It is an essential duty of management to gather appropriate
information directly from the market and use them for concluding a better and effective decision.
This factor have to take in account by the management and many organisation specially at that
time when they are going to start a new venture (Bhattacharya and et. al., 2015). London is one
of the most suitable place for starting any business new venture which enable in increasing more
and more profitability. This assignment is based on Food for Friends who want to start a new
business venture in UK. In this report, several more things are going to discussed and for taking
better decision management have to conduct a research which get done through questionnaire
method. Along with this, suitable range of data have to use for analysing whole result in an
appropriate manner. Use various graphs, charts enable in making effective decision making.
Along with this, for identifying feasibility of project use of various financial tool have to take in
account.
TASK 1
1. 1 Use of plan in collecting data through primary and secondary format
Plan is a framework which advice to do all the operations according to list. It comprise all
operations which are related with project so that better and effective outcome can be gain. Every
research require to work according in a plan format so that every project get done in an
appropriate manner. Food for friends wants to open another outlet in London for which they
want to identify taste and preferences of their users (Franks and et. al., 2013). Along with this,
they also have to gain information for locations which is best for opening restaurant. Plan for
collecting primary and secondary data is as below:
a) Primary data: Such data which are collected for a specific problem or a cause for the first
time is consider under primary data. Primary data is helpful in gaining view of various
individuals at one time through personal interaction. For collecting the primary source of data,
researcher of Food for friends have to follow a plan which support them in their long term
context:
 Time duration for analysing this fact is of 40 days.
 Budget provided for organising a investigation is about 12000 euro.
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 Scope of research is high as this will support in long term context.
 Risk of accurate data is high as this is based on personal interaction by questionnaire in
which sometimes people will not provide proper data (Gaillard, 2014). Random sampling method will be used for getting the opinion of various respondents.
b) Secondary data: Another data collection format which usually based on previous information
is secondary data. These are based on articles, books and journals so that interpretation of
information get done in appropriate manner. For collecting data through secondary sources, an
individual have to analyse financial statement of past few years and decision which taken by
management in their crucial time.
1.2 Use of sampling method and survey methodology
It is essential for an every research to select some sample for organise a research in an
appropriate manner. Researcher have to use sampling method through which it become easy to
select several respondent for the research (Hartman and et. al., 2014). There are several number
of sampling methodologies are identify which are as follow:
 Random sampling
 Cluster sampling
 Stratified sampling
Survey methodology is stated as technique which used to conduct it in an adequate manner. For
this research, simple random sampling has been used which will conduct on 78 respondents of
the users of a restaurant. There are various appropriate tools analyse which support in conducting
a research in a proper format.
 Survey monkey
 Social media
 Questionnaire
For this decision making process and making it more population influence questionnaire
methodology will going to use. It aid in take opinion of various people and identify interest of
group (Kahraman and et. al., 2015).
1.3 Use of questionnaire in relation to data
Questionnaire is a helpful measure which enable in gathering of data from various
number of people at one time. There are various kind of questionnaire are used by a researcher
like grouped, un -grouped, open ended, close ended and many more. For this investigation, every
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sort of questions are included in this which support in gaining more faithful outcome which is
helpful in taking beneficial decision (Mardani and et. al., 2014).
This questionnaire is prepared for Food For Friends. Please make sure that all details are
proper.
QUESTIONNAIRE
Name:
Age:
Gender:
Q1. Which age group are you from? 18 – 20 years 20- 30 years 40- 50 years
Q2. How much time you visit at restaurant in a month? Once in a week More than twice Sometimes
Q3. Prices of product are appropriate for every user?
1) Yes
2) No
Q4. Which thing attract you most in restaurant?
1. Price
2. Location
3. Ambience
Q5. According to you which is the most optimum price level?
(a) £8 - £14
(b) £14 - £16
(c) £16 - £20
(d) £20 - £23
(e) £23 and above
Q6. The locations are easily reachable for you? Yes
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 No
Q7. Which transport you usually prefer for visit?
1. Public transport
2. Cab
3. Personal
Q8. Provide rate for Food for friends. 5 - Excellent 4 – Very good 3 - Good 2 - Neutral 1 – Low
Q9. Any suggestion for improving quality of services and products with their range.
2.1 Creation of information on the basis of questionnaire
Information creation through a questionnaire get done by gaining opinion of various
people. Data presentation for Food For Friends is describe as below:
Question R 1 R 2 R 3 R 4 R5 Total
1 35 25 18 78
2 14 46 18 78
3 52 28 78
4 23 33 22 78
5 14 14 10 28 12 78
6 57 21 78
7 14 26 38 78
8 33 20 10 7 8 78
R stated as the response which show by user to questionnaire in relation to gain adequate data.
On the basis of this information, management of Food for Friends become able to take adequate
decision for their new project. It is helpful in drawing a valid conclusion through these results.
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Thus, management have to keep their keen focus on these results and then make healthy
discussion with their managers as well.
2.2 Use of mean, median and mode and its analysis
Arithmetic progression is one of the best thing through which proper decision can get
concluded.
Mean: It is an average of frequency which enable in getting a beneficial decision. It support in
gain a average which is related with series so that a beneficial decision will be conclude in
betterment and future decision context.
Median: It is the mid value of the series and get measure by arranging the series into ascending
or descending order. This mid value is helpful in making a valid conclusion by analysing a
representative value (Pettigrew, 2014).
Mode: Mode is a most occurring value of series or the number which have most impact on series
as well is also consider as mode value.
Question R 1 R 2 R 3 R 4 R5 Mean
Medi
an
Mod
e
1 35 25 18 26 25 35
2 14 46 18 26 18 46
3 52 28 40 40 52
4 23 33 22 26 23 33
5 14 14 10 28 12 15.6 14 28
6 57 21 39 39 57
7 14 26 38 26 26 38
8 33 20 10 7 8 15.6 10 33
Interpretation: According to this calculation of mean, median and mode, a valid and meaningful
conclusion get drawn for “Food For Friends” which support in making a beneficial decision for
future project. Average value of age group is 26 and median is 25 which represent that
management have to target the age group which is from 18 – 30. Along with this, most target
group have to be 18 -20 because it made more influence on series.
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Along with this, another major thing for Food for friends is their location according to
most number of respondents. This get analyse through mode value of series but as per average
and median value, price is another major thing for business in relation to attract many people.
As according to audience perspective it get analyse that the price level at new restaurant
have to be in between £20 - £23. This is most attractive and adequate price level which really
want many users. This will support in increasing their users at outlet by performing all things as
per user demand and requirement.
2.3 Analysis of data using measure of dispersion with including standard deviation
Sometimes few values are getting cluster around mean frequency of series, these cluster
things or facts are stated as variations which get underlay by making differentiation in two sets
series as well which is mean and median.
Along with this, another major measure of dispersion is standard deviation which is a
most commonly used measure of viability. It is helpful in estimating the mid point from mean
and median. This can get calculated with the help of mean deviation and variances. Standard
deviation is helpful measure which support in analyse the far value of an individual with mean
value.
Questio
n R 1 R 2 R 3 R 4 R5 Mean Median Standard deviation
1 35 25 18 26 25 8.5440
2 14 46 18 26 18 17.4355
3 52 28 40 40 16.9705
4 23 33 22 26 23 6.0827
5 14 14 10 28 12 15.6 14 7.1274
6 57 21 39 39 25.4558
7 14 26 38 26 26
8 33 20 10 7 8 15.6 10 11.0136
Standard deviation is a difference between the centre point or mid value with mean frequency.
This have to take in account by Food for Friends while taking any beneficial decision for future
context. Difference between the mean value and standard deviation is 8 which signifies that
organisation have to take some essential step in this context. Along with this, the perfect relation
also get measure in between some values of the series. Individual value according to frequency is
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14 and 15.6 and deviation arise of 7.12 which is a mean distribution of series. Thus, management
have to take all these things in account and take appropriate decision aid in gaining strength at
keen competitive market world.
2.4 Benefits of quartile, percentile and correlation coefficient in business context
Several other important tools which are helpful in better and effective decision making is
quartile, percentile and correlation coefficient. These all enable an organisation to make
appropriate decision and adopt suitable improvement methods for effective working as well.
These three are also been a part of measure of dispersion which enable in making scatter values
of the series for better decision making. Quartile: Identification of most of range values which occur in population is stated as the
process of quartile. There are four major parts a quartile have which are Q1, Q2, and Q3
which divide data into four groups (Rosemann and vom Brocke, 2015). Percentile: In gaining the result in percentage form is describe as percentile method of
decision making.
 Correlation Coefficient: Relation between two series signifies the appropriateness of
data. It enable in identifying the scatter of frequency values through which proper work
get done. It is essential for every researcher to analyse correlation coefficient value of
series so that appropriate actions can be carried down (Tools Used to Process
Information, 2017).
Food for Friends have to take these tool in account and then take appropriate decision for their
further future project. It enable to management for making a valid and meaningful conclusion
and action for the same (Shepherd and et. al., 2012).
For this series, quartile, percentile and correlation coefficient are calculated by taking two
series in account whom have similar frequency.
Relationship between 1 and 2 question with quartile and percentile:
Quartile Percentile
Correlation
Coefficient
18 18
-
0.21480864
54
21.5 21.5
7

32.5
28.3333333
333
46 46
Interpretation: Series have negative relationship in nature which signifies that management does
not require to work on them properly. It is essential to take some steps in improving the quality
of services. As management have to target the age group which belong to level of 18 – 20 years.
Relationship between 3 and 6 with quartile and percentile:
Quartile Percentile
Correlation
Coefficient
26.25 26.25 1
40 40
53.25 52
57 57
Interpretation: A perfect relationship get derive between the series of question 3 and question 6
which signifies that rates and locations of product both are adequate in nature.
TASK 2
3.1 Preparation of charts, graphs in making a valid conclusion
1. Interpretation: Maximum people belong to the age group of 18 – 20 years which
signifies that restaurant have to provide and deliver services according to them. Their
8
1 2 3
0
5
10
15
20
25
30
35
40
35
25
18 Row 2

target market has been identified and thus it is their responsibility to deliver quality
based services.
2. Interpretation: Most people visit twice in a month in a restaurant. This will provide support in
measuring that they have good brand image than others. Thus, they can easily increase
profitability of business.
3. Interpretation: All the products have to be at minimum rates. This get measure by gain
response of various people in which analyse that products are based on adequate price which aid
in attract most number of people. Thus, business have to be based on price sensitivity along with
quality.
9
1 2 3
0
5
10
15
20
25
30
35
40
45
50
14
46
18 Row 3
52
28
1
2

4. Interpretation: Price is a major factor for every business firm which lead to attract most
consumer group of an entity. But for Food for Friends their location is a major thing which
support in attract many customers. Thus, in near business project, they have to establish business
near to such location which give a feel and sense of relief.
5. Interpretation: £20 - £23 this is a best and appropriate price level for the restaurant. Many
people respondent to this range level segment which enable an organisation to increase their
number of users for their new outlet in London.
10
0.5 1 1.5 2 2.5 3 3.5
0
5
10
15
20
25
30
35
23
33
22
Row 5
0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5
0
1
2
3
4
5
6
14
14
10
28
12
Row 6

6. Interpretation: All the locations are near and appropriate for every group of customer. This get
measure through a survey. Thus, management have to take this response for future as well in
which locations matter most for them.
7. Interpretation: Personal transport enable in easy and possible access to restaurant or target
location. Many people use their own vehicle which enable them in reaching to destination which
is Food For Friends.
11
1 2
0
10
20
30
40
50
60 57
21 Row 7
0.5 1 1.5 2 2.5 3 3.5
0
5
10
15
20
25
30
35
40
14
26
38
Row 8

8. Interpretation: Excellent quality services with high range of products. This is a view of major
number of users of restaurant. Thus, this will have to continue by management in making their
operations more appropriate and effective.
3.2 Creation of trend lines in future forecasting
Interpretation: This trend line signifies that many customer are from the age below 20. Thus,
they have a chances of grabbing more and more future opportunities in success of business.
Although, management have to take this fact in account and then work in an appropriate manner.
12
1 2 3 4 5
0
5
10
15
20
25
30
35 33
20
10
7 8
Row 9
1 2 3
0
5
10
15
20
25
30
35
40
35
25
18 Row 2
Linear (Row 2)

Interpretation: Visit by a particular individual in a month is twice which signifies that future of
new outlet is bright and it support in generating more and more profit by business with proper
support of staff, managers and management.
Interpretation: Excellent quality services are always been a part of “Food For Friends” and they
get highest rate than other competitors. This signifies the trust of users in product quality as well
as services with proper range of goods.
3.3 Business presentation
13
1 2 3
0
5
10
15
20
25
30
35
40
45
50
14
46
18
Row 3
Linear (Row 3)
1 2 3 4 5
0
5
10
15
20
25
30
35 33
20
10
7 8
Row 9
Linear (Row 9)

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15

16

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3.4 Formation of formal business report to senior authority
The Management
Food For Friends
Dated: 27th September 2017
Subject: Recommendations and Suggestions
On the basis of data collection it get clearly identify that 18 – 20 years is a target market for a
company as there most number of customers are belong to this. Thus, products at new restaurant
have to target these user age group segment. Moreover, price or range of products have to be in
£20 - £23 as many people show there response in this group. Location is consider as USP of an
organisation although management have to choose the best location of London for starting new
outlet. Food For Friends have excellent quality services and products which get measure
through different customer perspective. Need to increase number of products at new location
some respondent give this as a suggestion to restaurant management.
TASK 3
4.1 Information processing tools advantages to beneficial decision making
Information is an essential tool for every business organisation. It support in taking
beneficial decision as well as pass important communication to each and every person.
Management have to use proper information processing tool which enable them in converting
information from simple manner (Smith, 2014).
Encoding of information is essential through which proper analysis of every important
data can get done. There are mainly three major stages are identify which are realted with
information processing tool:
 Input
 Output
 Storage
These three are the major stages of information processing tool. Along with this, it also have
several major benefits which support in executing the things properly.
1. Communication
2. Fulfil the gap between different culture
3. Availability of information at any time
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4. Facilitate a proper coordination between every organisation (Solomon, 2014).
These are the benefits which Food For Friends will get through information processing tools. As
this a major technique which facilitate to transfer data from one place to another in easy manner.
Thus, in making a beneficial decision process information processing tool play an effective role.
Food for Friends have to use information processing tool for their new business and then take
appropriate judgement which is related with their data and financial statement.
4.2 Formation of critical path management
Project management is stated as managing all activities and operations of business new
task. This management is compulsory to meet the required criteria for project. A project
management plan is one in which various number of activities are included whom are associated
with task (Tjader and et. al., 2014).
For this consent, a major tool has been used which is critical path management. A critical
path management will provide the shortest method to reach all the goals and targets which frame
by managers. A major advantage of this technique is that out of many plan one of the most easy
manner get adopted. Along with this, it also provide the starting and ending date of the activities
with predecessors.
Food For Friends have to prepare their project management plan which enable them in
performing all activities according to manner with given time frame as well. This process is
helpful in doing the right thing step by step in a defined manner. Thus, critical path management
for Food For Friends are as follow:
Name of activity Time period Predecessors
Scope in market 3 days
Location for the
restaurant 5 days 1
Investment 5 days 1
Return on investment 4 days 3
Target market 8 days 1, 2
Advertisement 10 days 5
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Lay out for decision 3 days 6
Executing the project 4 days 7
4.3 Benefits of financial tools in relation to make beneficial decision
An investment is an activity which require certain expenditure on the project in present
environment and gain its benefits in future. Thus, it is very essential for business to take
appropriate investment decision which facilitate growth in future context. Investment appraisal
technique is define as process through which it get measure that presented project is worthwhile
or not (Wood and Williams, 2014).
Food for Friends will going to invest in new project for restaurant at London. The
location is appropriate in nature and management want to identify the return on project. For this
relation, they have two options to include and analyse outcome:
 Traditional method
 Modern method
Both the approaches are helpful in concluding a beneficial decision for future consent and
analyse feasibility of project as well. Company have to use internal rate of return and net present
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value approaches through which a proper identification of project outcome get determine
(Zsambok, 2014).
Project
Initial investment 190000
Cash flow Year 1 50000
Year 2 64000
Year 3 58000
Year 4 70000
Project
Discounting
factor Discounted cash inflow
Year Cash Flow 12% Present Value
1 50000 0.893 44645
2 64000 0.797 51020.8
3 58000 0.712 41284.4
4 70000 0.636 44485
Total present value of
five years 181435.2
Initial investment of
year 190000
Net present value
(Total discounted
cash inflow – initial
investment) -8564.8
Internal rate of return 9.94%
Net present value of project is negative in nature and signifies that it will not lead to
provide profit in near future. Moreover, it will lead to get failed in earn 12% return as well which
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is not beneficial for an organisation. Thus, it get analyse that management have to drop this
project down on frequent manner.
CONCLUSION
It get concluding from the above report, business is a composition of various decision
making. For this relation, perfect research have to get done by by using both primary and
secondary source of data. Along with that, arithmetic progression and measure of dispersion are
helpful in identifying suitability of project in future context or by according to user interest and
opinion. Graphs and charts use make the presentation more effective and trend line support in
analysing the future forecasting of project. Formal business report enable to management in
understanding the outcome of research more appropriately. Critical path will support in
identifying shortest path for the project. Internal rate of return and net present value provide
support in gaining the feasibility of project in future context.
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REFERENCES
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costs. Proceedings of the National Academy of Sciences. 111(21). pp.7576-7581.
Gaillard, E., 2014. Transnational Law: A Legal System or a Method of Decision Making?.
Arbitration International. 17(1). pp.59-72.
Hartman, L. P. and et. al., 2014. Business ethics: Decision making for personal integrity and
social responsibility. New York: McGraw-Hill.
Kahraman, C. and et. al., 2015. Fuzzy multicriteria decision-making: a literature review.
International Journal of Computational Intelligence Systems. 8(4). pp.637-666.
Mardani, A. and et. al., 2014. Fuzzy multiple criteria decision-making techniques and
applications–Two decades review from 1994 to 2014. Expert Systems with Applications.
42(8). pp.4126-4148.
Pettigrew, A. M., 2014. The politics of organizational decision-making. Routledge.
Rosemann, M. and vom Brocke, J., 2015. The six core elements of business process
management. In Handbook on business process management 1 (pp. 105-122). Springer
Berlin Heidelberg.
Shepherd, D. A. and et. al., 2012. Thinking about entrepreneurial decision making: Review and
research agenda. Journal of management. 41(1). pp.11-46.
Smith, W. K., 2014. Dynamic decision making: A model of senior leaders managing strategic
paradoxes. Academy of Management Journal. 57(6). pp.1592-1623.
Solomon, M. R., 2014. Consumer behavior: Buying, having, and being (Vol. 10). Upper Saddle
River, NJ: Prentice Hall.
Tjader, Y. and et. al., 2014. Firm-level outsourcing decision making: A balanced scorecard-based
analytic network process model. International Journal of Production Economics. 147.
pp.614-623.
Wood, M. S. and Williams, D. W., 2014. Opportunity evaluation as rule‐based decision making.
Journal of Management Studies. 51(4). pp.573-602.
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Zsambok, C. E., 2014. Naturalistic decision making. Psychology Press.
Online:
Tools Used to Process Information. 2017. [Online]. Available through
:<https://itstillworks.com/tools-used-process-information-6982095.html>. [Accessed on
27th September 2017].
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