Topic 9 - Decision- Making

Question 1

Strategic Decisions

Answer 1

• Long term
• Made by senior managers
• High risk
• Made to meet the overall objectives of the business

Question 2

Tactical Decisions

Answer 2

• Medium term
• Made by middle managers
• Medium risk
• Made to achieve the strategic decisions

Question 3

Operational Decisions

Answer 3

• Short term
• Made by all staff
• Low risk
• Made to react to situations as they arise

Question 4

Centralised Decision-Making

Answer 4

Decision-making is kept at the senior level of the business.

Question 5

Decentralised Decision-Making

Answer 5

Decision-making is delegated to branches or outlets of the business.

Question 6

SWOT Analysis

Answer 6

• Strengths are things the business is good at
  -Weaknesses are things the business is ineffective at
• Opportunities are possible chances the business could take that arise due to something happening outside the business’s control
• Threats are things that might impact on a business achieving its aims or making positive decisions

Advantages:
- Identifies strengths and allows the business to build upon them
- Identifies weaknesses and allows them to be addressed
- Identifies opportunities and allows them to be exploited
- Identifies threats and allows them to be turned into opportunities
- Time is taken to analyse the current position of the business so no rash decisions are made

Disadvantages:
- Time consuming which slows decisions
- Very structured process so little creativity
- Generates ideas but doesn’t help pick the correct one
- Result only reflects opinions of those who carry it out
- Information considered may become outdated quickly

Question 7

Role of a Manager

Answer 7

• Plan - look ahead, see potential opportunities or problems, set targets for the future
• Organise - set tasks for other employees that need to be carried out
• Control - measure and correct the activities of the business, check what is being done against what is expected
• Command - issue instructions to employees
• Coordinate - bring together the resources of the business to achieve objectives
• Delegate - give subordinates the authority to carry out management level tasks
• Motivate - give employees a reason to enjoy their work

Question 8

Assessing Effectiveness of a Decision

Answer 8

• Measure sales levels
• Measure profit levels
• Monitor staff morale
• Check staff turnover and absenteeism
• Look at customer feedback
• Gather staff feedback
• Review complaints made