Analytical Thinking and Decision Making Report - BUS 101, Semester 1

This report delves into the realm of analytical thinking and decision-making processes within a business context, using Anite as a case study. It explores the importance of effective decision-making, particularly in relation to business expansion, and the application of decision analysis tools. The report outlines a decision problem involving the expansion of Anite's operations, considering multiple objectives, and employs the Simple Multi-Attribute Rating Technique (SMART) to evaluate the decision problem. It then discusses the strengths and limitations of the analysis, supported by relevant sources. The report covers various aspects of managerial decision-making and analysis, emphasizing resource utilization, performance analysis, and the selection of optimal alternatives. It also examines the implementation of plans and procedures within an organization. Overall, the report offers insights into how businesses can make informed decisions, particularly when expanding into new markets, by utilizing analytical tools and considering different factors, including financial, legal, promotional, geographical, and competitive market dynamics.

Analytical Thinking and Decision
Making

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK...............................................................................................................................................1
1. Importance of decision making and the application of decision analysis...............................1
2. Outlining a decision problem relating to work or an external organization which involves
multiple objectives......................................................................................................................3
3. Applying simple multi attributes rating methods (SMART) for outlining the decision
problem.......................................................................................................................................5
4. Strengths and limitations of analysis with the support of appropriate sources in context
decision problem.........................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Analytical thinking refers to finding solution of a problem or evaluation of various
alternatives to make the best possible decision for the company in the given resources. It includes
drawing conclusion from the given statistics and also to give an opinion whether it will be
profitable or not. There are various tools which are being evolved in the current modern and
technological scenario which helps in effective decision making by management. These include
various software which are being developed like ERP. The analysis of any problem is bifurcated
into various parts which are diagnosis of the exact problem and its causes. The possible
alternatives to treat the problem along with any creative method to treat it, if possible (Dane,
Rockmann and Pratt, 2012). Selection of the best possible alternative considering budget and
time constraints of the company. Anite is software organisation which is the supplier of test and
measurement solutions in international wireless market. In this report, we will be considering the
various aspects of managerial decision making and analysis for making business decisions. The
need and importance of decision making and analysis within an organization will be discussed in
this report.
TASK
1. Importance of decision making and the application of decision analysis
Decision making is a crucial part of business management and is one of the most basic
attribute that is expected from a manager who is leading a firm. The job of a decision maker is to
choose the best possible alternative among the options available that will result in the most
effective and efficient outcomes for the company. Which is of paramount importance for the
company is usually taken from top management of the firm. Decision involves achievement of
targets and objectives of the firm within the time frame allocated and taking into consideration
the budget constraints which are there. The ultimate aim of the firm is to utilize its resources in
the most efficient way possible to generate higher revenue and profitability for the firm. Decision
making helps in efficient utilization of the scarce resources of the organization. It involves
decision as to how much to use when to use these resources and in what quantity (Subramoniam
and et. al., 2013). Decision makers in an organization can be described as follows:
Top level management: They are the main decision makers of the company and their role
is to frame and implement strategies for the firm so that the best possible outcomes can be
gained. The main decisions are regarding planning, controlling etc.

Intermediate management: The job of this level of management is to form and apply
tactical decisions like fixing authority of subordinates, guiding them on individual tasks on how
to perform it and if there is problem in performance of task how it can be improved and
enhanced etc.
Operations level management: These are decision makers which are responsible for the
proper management of operations of company like production process, management of human
resources like labour, employees, etc. They are also responsible for various day to day life
decisions of the company which include dividing responsibilities among workers, preparation of
scheduled work, etc.
Decision making is a problem solving approach and it can be said that without decision
making, it is highly unlikely that major business decisions can be taken including coordinating,
planning, etc. (Fenton‐O'Creevy and et. al., 2011). The various decisions which are usually taken
in management of any business are described as below:
Resource utilization: Resources are scarce for both society and company and therefore,
effective utilization of the same is of paramount importance. By utilizing resources in the most
effective way possible will ensure right decisions are taken at suitable time and it results in
wealth maximization for the overall firm.
Analysis of performance: Analysis of previous decision making and how those
decisions has affected the firm and whether to make any changes in those decisions or the same
are suitable for the growth of the firm is considered.
Selection from various alternates available: The primary task of decision making is the
selection of the best possible alternative for the firm among the available alternatives like
selection of the most convenient location to set up plant.
Implementation of plans and procedure: Another most important aspect of decision
making is the implementation of various policies and procedures framed by top management of
company. These have to be implemented by intermediate level management and operational
level management.
Decision analysis application
It is an important component of overall decision making and evaluation. It is helpful in
selecting the best possible and cost effective way for company. For example, the company might
choose from various projects, in which to invest and from which to divest so as to increase the

profitability and bring cost efficiency in the organization. Various practical tools and software
are available now a day which can be used by the business managers for effective decision
making and analysis (Reyna and Brainerd, 2011). ERP software is one of the software used by
business to manage its resources well and is also an effective tool for decision making within
organization. Decision within the organization can be financial and non-financial. Some of the
financial decisions taken by management are as follows: -
Cash flows – It shows how much cash is generated from the business from its operations
within a year and if the number is in negative, the management will have to take decision
regarding reduction in cost or increase in its sales.
Payback period – This shows in how much times the project will pay back to company
its initial investment.
Average rate of return – It shows an annual return on the project in percentage terms. It
is an important tool for making wise project evaluation decision.
2. Outlining a decision problem relating to work or an external organization which involves
multiple objectives
There is huge role for playing an effective decision making process regarding expansion of
the business activities successfully. Planning is must in every organisation regarding attain
sustainability in their business operations in diversified business environment. It covers the
planning about different activities from purchase of raw material to making of finished goods.
Decision making is the factor which is used by organisation regarding planning of different
activities of various departments. So, there is huge importance of effective decision making
regarding increase the efficiency of organisation.
Example: Opening of office at new location
Anite is small organisation whose main aim is to expand their business operations at new
location. The management decided to start their new office at Durham. There are large number
of factors required to consider for effective implementation of business functions which are
defined below:
 Management: Need to implement proper management system which is effectively
controlled by managers. It helps to manage the different factors at new place which
contributes in development of profitable business operations. It provides opportunity
regarding performance of tasks in systematic manner.

 Finance: It is important factor which helps in functioning of business operations. The
organisation is need to prepare effective budget which helps in effective allocation of
finance resources to different departments. Strong financial planning helps in adoption of
new and innovative technologies regarding production of their products and attain
competitiveness in new market.
 Legal: This includes the factors which are provided by the local government of Durham.
Every organisation who wants to start their business required to follow such legal
requirements. It helps to gather support of society and government. There are large
number of financial benefits are also attaining by organisation like prevention from fines
and legal penalties.

 Promotion: Anite is small organisation wants to start their business operations in
Durham. They need to adopt effective modern promotional tools which helps in
popularizing their products in market and between customers. This will have huge
importance for new organisation because it helps in building image, attain competitive
advantage and influencing the behaviour of customers. The major promotional tools are
direct marketing, public relation, advertising etc. Use of social media platform is the most
cost efficient method which is having widest reach in market. It helps in influencing the
behaviour of clients.
 Geographical and demographic: Consideration of such factors helps in segmentation of
market. It helps in identification of the needs of different customers which are located in
particular region. It is observed that, most of the individuals of Durham are literate which
provides the opportunity regarding the use of online platform to conduct their business
activities.
 Competitive market: In Durham, large number of small scale organisations are working
and use digital platform to provide their functions. So, the market is highly competitive in
nature. In successful implementation of the business, management needs to adopt new
technologies which helps to effectively compete in market and build their image in
between customers. To compete in market there is also need to focus on creation of
innovative ideas. It not only helps in development of their services but also helps in
satisfaction of the different demands of customers.
Consideration of all these factors helps in effective direction to the employees in
performance of their different tasks. There are many internal factors which also affects the
business performance at new location like cultural differences, attitudes, belief, ethics etc. Proper
consideration helps to drive their operations towards success in future.
3. Applying simple multi attributes rating methods (SMART) for outlining the decision problem
SMART (Simple-multi-attribute rating technique) is relied on linear additive model. This
model would be implemented for factor and issues which are determined in current question.
These would assist analysts and decisions makers to assess multiple alternative and a holistic
perspective towards issues. The tool is separated into tiny sections that assist to identify the
issues along with a depth assessment in decision making in an efficient manner. This would
assist to know assessment of decision making in order to complete reappraisal of the issues.
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Various alternative is adopted by the analysts and decision maker are the labour cost, stock,
working capital and operating and non-operating expenses in an efficient manner. SMART is
divided into 8 sections which are elaborated in details:
Stage 1: Identification of decision maker
It is important for an individual to make use of effective decision maker for the purpose
of expending business operation. It is more vital aspects to choose perfect individual for taking
decision in other business organisation. This would assist company to form various aspects in
business planning. The attitude and behaviour of an individual need to play a dominant role in
decision making. This would influence operation of an organisation in order to gain competitive
advantages over the other market. However, in order to make crucial steps for the betterment of
business managers need to make use of all those factors that are been covered for better
sustainability in business market. As Anite is well known as a supplier of test and perfect
measurement solution to the global wireless market. They want to increase their presences in
every parts of the country for this purpose they would make plan after making crucial decision
regarding their future growth and its sustainability.
Stage 2: Identification of various problem that depend upon prospect in context of the
business:
Under this particular stage, a detailed evaluation of all those problems which is having
arises in a business process. Such as Anite is well known for their services delivery in
international market. Henceforth, before opening new business in foreign market they need to
identify various problems those are making maximum impacts to them. Like for example,
because of brexit issues there is a huge political implication in every parts of UK. Because of that
there are various clashes and protest has been faced by plenty of business organization. These
issues will not be able to operate any new business positively in the market. It is the primary role
of managers to make proper analyses of various risk factors and uncertainties those are been
present during the time of business planning.
Stage 3: Determining best alternatives
It is more vital for every business organization to select best alternative that is providing
better results in near future. This stages make complete focus on various outcomes that are been
found in the business in future run and make appropriate planning to attain it in more effectively.
In order to attain more effective outcomes company, need to adopt suitable alternatives that can
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assists in gaining competitive advantages over the other companies. Such as Anite Plc is more
probably known for wireless services technologies so they are continuously planning to increase
their ranges in various other sectors in digitalisation. This will increase competence interest in
specific market where they are planning to make valuable investments.
Stage 4: Searching of idea
It is more tough task to identify new idea in order for limiting conception aspects of
interest and values. This can be attained by making combination of various aspects and
eliminate not usable criteria. In every business organisation, specific criteria will be
formulated in business process. It is crucial for the managers to make use of best ideas that
can help in generating better outcomes for the company. After determining lists of every
idea the organisation needs to rate them as per their superiority. Evaluation of every
criteria is needs to be done in best manner to so that it would cost less to the company. Like
for example, setting of new branch at any new location the organisation must ensure that
every details and instruction are must be followed properly.
Alternatives
Weight A B C D E
Attributes
Reliability 24 90 70 50 40 80
Capability 23 60 50 50 70 60
Quality company 21 50 50 70 60 50
Geographical condition 12 80 80 80 80 60
Financial condition 11 50 70 70 50 70
Service 9 50 60 60 80 60
Total 100 380 380 380 380 380
Aggregate 28 27 26 28 29
Reliablity 1100 950 1150 950 850
Capability 550 1050 800 650 450
Quality company 450 450 550 650 750
Geographical situation 650 350 400 550 450
Financial situation 250 550 350 450 500
Service 400 450 550 550 800
Total 3400 3800 3800 3800 3800
Stage 5: Allocating value for various criteria
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This method is more appropriate and direct as providing ranking to various problems is must
more easy to provide weight age to the issues. This said to be more difficult task in order to
set up new business after analysing external environments. For allocating values to a various
concept in an organisation a well organises brainstorming sessions would be organised. It
will help in creating new opportunities to plenty of staffs to make their views and
recommendation about formation of new office is valuable in new areas. According to the
mentioned information, it has been found that total weight age of selected alternative would
be analyse in percentage form. Under which reliability is been given 24% of total weight out
of 100. whereas capability is marked as 23 %.
It means that the company is sufficient able to open new office. The geographical condition
is 12% of weight that can assists in setting of new operations. Likewise, financial situation
of the company is also not that much effective as because just 11% weight out of total 100 is
identified under this evaluation. By the help of this, various skills and knowledge would also
be gain that will be needed for getting maximum benefits in competitive market. Like for
example, recruitment of right employees for the new branch of Anite can be analyse by
effective brainstorming session. This would be one of the finest training methods which will
be helpful in increasing capabilities of an individual and employees.
Stage 6: Calculating average weight of each attributes with the assigned values:
This stage of SMART analysis assists to measure weighted average of every single
attributes along with the assigned values. Sum for supplier A weight is 6550 and for suppliers’ B
is 6150 which is followed by the supplier C, D and E in respective of 6090, 6060 and 6380.
Under this, this is rightly stated that the supplier A and Supplier E are having more values than
others. Apart from this, this can be said that, management who is authorised to take decisions
consider two alternatives which are capability and reliability and bot are measured in a table
shown below:
Alternatives
Weight A B C D E
Attributes
Reliability 24 90 70 50 40 80
Capability 23 60 50 50 70 60
Quality company 21 50 50 70 60 50
Geographical condition 12 80 80 80 80 60
Financial condition 11 50 70 70 50 70
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Service 9 50 60 60 80 60
Total 100 380 380 380 380 380
Weight Supplier A Weight*A
Attributes
Reliablity
24
90
2,160
Capability 23 60
1,380
Quality company 21 50
1,050
Geographical
condition
12 80
960
Financial condition 11 50
550
Service 9 50
450
6,550
65.5
Weight Supplier B Weight*B
Attributes
Reliablity
24
70
1,680
Capability 23 50
1,150
Quality company 21 50
1,050
Geographical
condition
12 80
960
Financial condition 11 70
770
Service 9 60
540
6,150
61.5
Weight Supplier C Weight*C
Attributes
Reliablity
24
50
1,200
Capability 23 50
5

1,150
Quality company 21 70
1,470
Geographical
condition
12 80
960
Financial condition 11 70
770
Service 9 60
540
6,090
60.9
Weight Supplier D Weight*
D
Attributes
Reliablity
24
40
960
Capability 23 70
1,610
Quality company 21 60
1,260
Geographical
condition
12 80
960
Financial condition 11 50
550
Service 9 80
720
6,060
60.6
Weight Supplier D Weight*D
Attributes
Reliablity
24
80
1,920
Capability 23 60
1,380
Quality company 21 50
1,050
Geographical
condition
12 60
720
Financial condition 11 70
770
Service 9 60
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