decision making

Question 1

Strategic Decisions

Answer 1

• Concerns the overall goals of the organisation
• Long term
• Made by senior managers
• Usually involves high risk
• Example – aiming to open a division of the company overseas

Question 2

Tactical Decisions

Answer 2

• Made to achieve the strategic objectives
• Medium term
• Made by middle managers
• Medium risk
• Example – changing the way a product is advertised or sold

Question 3

Operational Decisions

Answer 3

• Day-to day-decisions
• Short term
• Made to ensure smooth running of the business
• Made by junior managers
• Little or no risk
• Example – ordering new tablets for the office

Question 4

Suggest different ways of evaluating the success or effectiveness of a business decision.

Answer 4

• Research customer’s opinions using surveys
• Gather feedback from staff at meetings
• Assess the situation to see if a problem has been solved
• Compare profits/sales figures to see the impact of the decision
• Use other financial information, for example ratio analysis
• Check whether targets have been met
• Review key performance measures for staff
• Review the number/level of complaints made
• Customer reviews/press coverage

Question 5

SWOT analysis

Answer 5

A SWOT analysis is a compilation of a company’s strengths, weaknesses, opportunities and threats. The primary objective of a SWOT analysis is to help organisations develop a full awareness of all the factors involved in making a business decision.

• Strengths are areas that the organisation is performing well in or is good at, such as having a strong brand image or a good corporate culture.
• Weaknesses are areas that the company is not doing well in or is performing more poorly, such high levels of customer complaints or a poorly performing product.
• Opportunities are things that could help the business to help them grow or become more profitable, such as the chance to take over a competitor or a boom in the economy.
• Threats are external factors that could prevent a business from meeting its goals, for example a new competitor entering the market, a rise in interest rates or a possible recession.

Question 6

role of a manager

Answer 6

• Planning the objectives and decides what has to be done in order to reach the objectives.
• Making decisions – operational, tactical and strategic.
• Organising resources to help ensure the organisation is successful in achieving the objectives.
• Commanding by giving instructions to staff about what needs to be done and how.
• Delegating responsibility to carry out a task to a subordinate – which gives the manager more time to focus on other work.
• Coordinating to make sure work is carried out efficiently and that everyone is working towards the same goal.
• Controlling by evaluating what has been done and checks it against what was expected.
• Recruiting and dismissing staff.
• Motivating and inspiring staff.
• Creating company policy.