UB9 : Decision Making

Question 1

Name the 3 types of decisions

Answer 1

Strategic, Tactical and Operational.

Question 2

Describe Strategic Decision Making

Answer 2

Strategic Decisions are long-term and complex.​ They are used to give overall direction to the organisation and made by senior management.
eg Extend market share – be the market leader

Question 3

Describe Tactical Decision Making

Answer 3

Tactical decisions are medium-term and less complex. They set out how strategic decisions will be achieved and are made by middle managers.
eg Launching new products/opening new branches

Question 4

Describe Operational Decision Making

Answer 4

Operational decisions are made day-to-day, they are simple and routine. These are made by junior managers.
eg Regular ordering of supplies/creating staff rota

Question 5

Decision making can be…

Answer 5

Centralised and decentralised.

Question 6

Describe centralised decision making and its adv and disadv

Answer 6

Centralised decision making is when most decisions are taken by senior managers or the head office.
Advantages
- decisions made by the most experienced people
- decisions made quicker
- lead to greater uniformity within the organisation
Disadvantages
- staff demotivated from lack of input in decisions
- central team slower to respond to local changes in market.

Question 7

Describe decentralised decision making and its adv and disadv

Answer 7

Decentralised decision making is when each department within the organisation has the authority to make their own decisions.
Advantages
- staff motivated by opportunity to make decisions and be creative
- local teams can respond quickly to changes in local
market
- can provide better level of customer service
Disadvantages
- decisions made by less experienced people
- local decisions may be inconsistent with overall
strategy

Question 8

Identify the roles of a manager into decision making

Answer 8

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

Question 9

Explain the role of Planning

Answer 9

Preparing for the future and create action points.

Question 10

Explain the role of Organising

Answer 10

Having resources ready and putting plan into action.

Question 11

Explain the role of Commanding

Answer 11

Maintaining worker activity.

Question 12

Explain the role of Co-ordinating

Answer 12

Making sure all departments work together to achieve the end goal or objective.

Question 13

Explain the role of Controlling

Answer 13

Checking the effectiveness and efficiency of the proposed plan.

Question 14

Explain the role of Delegating

Answer 14

Entrusting a task or responsibility to another member of staff.

Question 15

Explain the role of Motivating

Answer 15

Encouraging staff to give their best.

Question 16

Explain the impact of good decision making

Answer 16

Increased productivity, increased profits and growth of the business.

Question 17

Explain the impact of bad decision making

Answer 17

Employees lose motivation, production is disrupted and an increase in customer complaints.

Question 18

Identify factors which may affect decision making

Answer 18

Finance, Human Resources, Technology and Other Factors.

Question 19

Explain how Finance affects decision making

Answer 19

There may not be finance available to the business to make the decisions they would like to.
For example, a business may wish to invest in new machinery to increase production but they do not have enough capital to allow them to do this.

Question 20

Explain how Human Resources affects decision making

Answer 20

The quality of decisions made by managers can be affected by;
- their skills and expertise
- the amount and quality of information they have
available
The staff involved in implementing the decision need to be willing to cooperate and work with the decision for it to be successful.
Senior managers may not agree with the decisions.
Existing company policy may restrict the decisions a manger is allowed to make.

Question 21

Explain how Technology affects decision making

Answer 21

Lack of the correct equipment or technology may restrict the decision-making process.

Question 22

How may Other Factors affect decision making?

Answer 22

The decision-making process may also be affected by:
- amount of time available to make the decision
- external pressures such as exchange rates and economic stability

Question 23

What is a SWOT analysis?

Answer 23

A SWOT Analysis is a managerial decision making tool used to identify a firm’s internal strengths and weaknesses, as well as external threats and opportunities.

Question 24

Describe Strengths

Answer 24

Strengths are areas that the company is performing well in or is good at such as having a strong brand image or a good corporate culture.
Strengths identified should be matched up to potential opportunities for the company.

Question 25

Describe Weaknesses

Answer 25

Weaknesses are areas that the company is not doing well in or is performing more poorly such as lack of investment in new technology or a poorly performing product.
Weaknesses should be improved. Threats should be allowed for and an action plan made to try and limit their impact.

Question 26

Describe Opportuities

Answer 26

Opportunities are things that could happen outwith 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.

Question 27

Describe Threats

Answer 27

Threats are external factors that could prevent a business from meeting its goals such as:
- a new competitor opening or reducing their prices
- a recession

Question 28

Why do businesses carry out a SWOT analysis?

Answer 28

The main reason that a company carries out a
SWOT analysis is to help them in the decision making process. It allows them to:
- see areas where they could improve
- where they can plan for future eventualities
- highlight opportunities for future developments