Decision Making

Question 1

What is a decision?

Answer 1

The choice between alternatives that individuals must make to get from where they are at present to where they want to be in the future.

Question 2

What are the primary reasons managers make decisions?

Answer 2

To achieve long term goals and instruct employees to perform activities that help meet these goals.

Question 3

What type of decisions are strategic decisions?

Answer 3

Long term decisions concerned with the overall direction and focus of the organization.

Question 4

Who typically makes strategic decisions?

Answer 4

Senior management or owners.

Question 5

Give three examples of strategic decisions.

Answer 5

• To expand into a new country
• To diversify the product range
• To merge with another company

Question 6

What are tactical decisions?

Answer 6

Medium term decisions concerned with actions to achieve strategic decisions.

Question 7

Who makes tactical decisions?

Answer 7

Senior or middle managers or heads of department.

Question 8

Give two examples of tactical decisions.

Answer 8

• Finding cheaper suppliers
• To develop a new marketing campaign

Question 9

What are operational decisions?

Answer 9

Short term (day to day) decisions usually to address problems that arise that day or week.

Question 10

Who typically makes operational decisions?

Answer 10

Low-level managers, section heads or team leaders.

Question 11

Give an example of an operational decision.

Answer 11

Considering how to respond to a customer complaint.

Question 12

What is centralised decision making?

Answer 12

When most decisions are taken by senior managers or the head office.

Question 13

List two advantages of centralised decision making.

Answer 13

• Decisions made by the most experienced people
• Decisions made more quickly

Question 14

What is decentralised decision making?

Answer 14

When each department within the organisation has the authority to make their own decisions.

Question 15

List two disadvantages of decentralised decision making.

Answer 15

• Decisions made by less experienced people
• Local decisions may be inconsistent with overall strategy

Question 16

What does SWOT stand for?

Answer 16

• Strengths
• Weaknesses
• Opportunities
• Threats

Question 17

What is the main purpose of conducting a SWOT analysis?

Answer 17

To help in the decision making process.

Question 18

What are strengths in a SWOT analysis?

Answer 18

Positive internal factors that the business is currently experiencing.

Question 19

What are weaknesses in a SWOT analysis?

Answer 19

Internal areas where the business currently performs poorly.

Question 20

What are opportunities in a SWOT analysis?

Answer 20

External activities or circumstances that the business could potentially take advantage of in the future.

Question 21

What are threats in a SWOT analysis?

Answer 21

External problems or challenges that the business could potentially face in the future.

Question 22

What are the roles of managers?

Answer 22

• Plan
• Organise
• Command
• Co-ordinate
• Control
• Delegate
• Motivate

Question 23

What factor can affect a business’s decision making?

Answer 23

Finance.

Question 24

How can human resources affect decision making?

Answer 24

Quality of decisions can be affected by skills, expertise, and the willingness of staff to cooperate.

Question 25

What technology factor can restrict the decision-making process?

Answer 25

Lack of the correct equipment or technology.

Question 26

What is one way to evaluate the effectiveness of a decision?

Answer 26

Comparing the situation before and after the decision.

Question 27

Name one quantitative data point to evaluate decision effectiveness.

Answer 27

Increase in profits.

Question 28

What is one method firms can use to gather information for evaluating decisions?

Answer 28

Looking at financial data from two time periods.