Evaluation of Approaches, Techniques, and Factors in Decision Making

PROJECT
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
SCENARIO-A.................................................................................................................................3
1. Evaluation of range of approaches, techniques and factors that contribute in decision
making within organisation.........................................................................................................3
2. Stakeholder management......................................................................................................4
Key financial management principle required by organisation in achieving effective financial
strategies for long term................................................................................................................5
3. Value of management accounting techniques in terms of maximising shareholders value
and cost control............................................................................................................................6
4. Techniques for fraud detection, prevention and approach to ethical decision making.........6
5. Reflection..............................................................................................................................7
SCENARIO- B................................................................................................................................7
1. Analysis and evaluation of Company’s financial performance through ratio calculation.......7
2. Operational and strategic decision for M&S through the company’s performance analysis 10
3. Compare and contrast investment appraisal technique..........................................................10
4. Value of techniques and its role in financial decision making..............................................12
5. Financial decision making for long term sustainability.........................................................12
6. Recommendations..................................................................................................................13
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................15
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INTRODUCTION
Investment appraisal is a technique defined as taking up the best level of decision in
regards to the investment of company so that best level of growth targets could have been meets
by the business entity. This report will discuss about the different aspects related to the financial
decision making process undertake by the Marks and Spencer Company. Company is associated
with the retail sector and based in UK. Henceforth, report will emphasis over the range of
approaches, techniques and methods that can be taken up to take the bet level of financial
decision making in respect to the business entity. Stakeholder management will also discuss in
this project. Value of management accounting technique will also discuss under this project.
Furthermore, project will look after the ratio analysis to evaluate the overall performance of the
business entity. Different investment appraisal technique will also be discussed that can guide the
company in taking the best level of investment decision making.
SCENARIO-A
1. Evaluation of range of approaches, techniques and factors that contribute in decision
making within organisation
There are varieties of decision that company need to undertake in order to grow and
sustain its operation in competitive environment Likewise, the strategies to be used, prices at
which specific products can be offered and target customers of the company. So, there are plenty
of areas in which companies need to make decision for its growth and expansion for longer time
frame. Organization in order to take right decision at right time makes use of different
approaches that is formal and informal approach. The various advantages and disadvantages of
making use of Formal and informal approaches can be illustrated as follows:
Formal approach: In this method company follow strict procedure and policies in order to take
correct decision for company. The information or decision firstly approve by the senior
executive, founder or owner of company and other shareholder or investors (Prihartono and
Asandimitra, 2018). In order to take right the decision flow from top to bottom and various
official formalities are completed for growth and benefits of company to maximum extend.
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ADVANTAGES DISADVANTAGES
Formal decision making contribute in taking
appropriate and best decision for company so
that it can enjoy maximum market share and
profit margin.
On the other hand it can be stated that for
formal procedure company need to spend a lot
of time, incurred cost to take decision. Thus, it
may even cause further delay and barrier in
achievements of end goals.
Informal approach: This is another method of decision making used by company in which there
is no meeting, official procedure and policies related to taking particular decision. The decision
is effectively implemented by the manager on just order to its superior thus it helps company in
effective adapting its strategies as per external environment situation and circumstances. In this
method the manager also encourage employees to share their respective points of view so that
they can formulate particular decision which can be crucial for organisation (Brigham and
Houston, 2021). Its advantages and disadvantages are as:
ADVANTAGES DISADVANTAGES
The biggest advantages of making use of
informal approach for decision making is that
it helps in taking right decision in limited time
thus company is able to take competitive
advantage of opportunity.
While the disadvantage is that informal
approach may not resulted in taking right
decision for benefits of organisation.
2. Stakeholder management
Stakeholders are individuals that are interested in the operation of company so manager
need to make appropriate strategies in order to fulfilled their needs. Likewise customers,
investors, employees, government and suppliers are some of the stakeholders associated with
company having different power and interest within organisation. So, company in order to
satisfied needs of several stakeholders and reduce the associated conflict make use of different
approach or strategies (Shapiro and Hanouna, 2019). Thereby the way company effectively
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