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Managing ChangeManaging Change
Making Strategic DecisionsMaking Strategic Decisions
“Good decisions come from wisdom. Wisdom comes from experience. Experience comes from bad decisions.”
Anonymous
“Decisions of the kind the executive has to make are not made well by acclamation. They are made well only if based on the clash of conflicting
views…The first rule in decision making is that one does not make a decision unless there is disagreement.”
Peter Drucker
“A complex decision is like a great river, drawing from its many tributaries the innumerable premises of which it is constituted.”
Herbert Simon
BUSS4.11 Decision Making
In this topic you will learn In this topic you will learn about:about:The significance of information
managementThe value of different approaches
to decision-makingAssessing influences on
corporate decision-making
BUSS4.11 Decision Making
If only you knew!
Making Strategic Making Strategic DecisionsDecisions
BUSS4.11 Decision Making
• Made at the top of the hierarchy
• May require high capital investment• Once made difficult
to reverse
• Long term direction of business• Aim at meeting
corporate objectives• Will impact upon
different stakeholders
Significance of Information Significance of Information ManagementManagementInformation Management
◦Use of accurate and up to date information to aid decision-making
◦Collation and sharing of informationManagement Information System
◦The use of IT to collect, store, process and disseminate information
BUSS4.11 Decision Making
DataRaw facts and
figures
InformationDate with context that can be used to aid decision
making
Processing to give meaning and
context
Information ManagementInformation ManagementEffective decision-making will
require both qualitative and quantitative information
Information can come from both internal and external sources including:◦Financial Accounts◦Market Research◦Competitor Analysis◦Market Analysis◦SWOT Analysis◦PEST Analysis◦Economic Forecasts
BUSS4.11 Decision Making
Approaches to Decision-Approaches to Decision-makingmakingScientificBacked by
researchOutcomes are
simulated or tested
Reduces but does not eliminate risk
Decisions are objective
IntuitionBased on gut
instinctQuicker decisions
can be madeAn experienced
manager may understand the market
Decisions are subjective
BUSS4.11 Decision Making
If you were to put £1000 on a horse would you
study the form or go for one you liked the sound
of?
“Nothing slows down an organisation more than paralysis by analysis.”
Decision-making – Further Decision-making – Further ReadingReading
There are many techniques to aid decision-making◦ SWOT◦ Cost Benefit Analysis
Six Thinking Hats – look at decisions from different anglesPareto Analysis – what is
the most important problemto solve?
Starbursting - analysing decisions by asking questions
BUSS4.11 Decision Making
How useful would each of these approaches be to a chain of coffee
shops considering opening stores in China?
Feel: What do you feel?
Think: What has to happen next?
Benefits: What good about it?
Judgement: What bad about it?
Facts: Evidence / Statistics?
Creative: All ideas are possible!
http://news.bbc.co.uk/1/hi/england/gloucestershire/8564814.stm
If you were Julian Dunkerton, chief executive of SuperGroup, what would your strategy be now?
Feel: What do you feel?
Think: What has to happen next?
Benefits: What good about it?
Judgement: What bad about it?
Facts: Evidence / Statistics?
Creative: All ideas are possible!
http://news.bbc.co.uk/1/hi/england/gloucestershire/8564814.stm
If you were Julian Dunkerton, chief executive of SuperGroup, what would your strategy be now?
Feel: What do you feel?
Think: What has to happen next?
Benefits: What good about it?
Judgement: What bad about it?
Facts: Evidence / Statistics?
Creative: All ideas are possible!
http://news.bbc.co.uk/1/hi/business/8563728.stm
If you were BA boss Willie Walsh, what would your strategy be?
Feel: What do you feel?
Think: What has to happen next?
Benefits: What good about it?
Judgement: What bad about it?
Facts: Evidence / Statistics?
Creative: All ideas are possible!
http://news.bbc.co.uk/1/hi/business/8563728.stm
If you were BA boss Willie Walsh, what would your strategy be?
Feel: What do you feel?
Think: What has to happen next?
Benefits: What good about it?
Judgement: What bad about it?
Facts: Evidence / Statistics?
Creative: All ideas are possible!
http://news.bbc.co.uk/1/hi/business/8561671.stm
If you were John Lewis chairman Charlie Mayfield what would your strategy be?
Feel: What do you feel?
Think: What has to happen next?
Benefits: What good about it?
Judgement: What bad about it?
Facts: Evidence / Statistics?
Creative: All ideas are possible!
http://news.bbc.co.uk/1/hi/business/8561671.stm
If you were John Lewis chairman Charlie Mayfield what would your strategy be?
Feel: What do you feel?
Think: What has to happen next?
Benefits: What good about it?
Judgement: What bad about it?
Facts: Evidence / Statistics?
Creative: All ideas are possible!
http://news.bbc.co.uk/1/hi/business/8513721.stm
If you were Toyota President Akio, what would your strategy be?
Feel: What do you feel?
Think: What has to happen next?
Benefits: What good about it?
Judgement: What bad about it?
Facts: Evidence / Statistics?
Creative: All ideas are possible!
http://news.bbc.co.uk/1/hi/business/8513721.stm
If you were Toyota President Akio, what would your strategy be?
Influences on corporate Influences on corporate decision-makingdecision-makingEthical position (real or perceived)
◦ How will the decision be viewed by key stakeholders
◦ Will moving production abroad match the business’ ethical standards?
◦ Where are materials sourced from?Resources available
◦ Financial constraints◦ Workforce◦ Scarcity of materials
Relative power of stakeholders◦ How might pressure groups respond?◦ Will TUs become involved?
BUSS4.11 Decision Making
Also, don’t underestimate the
importance of corporate objectives. Remember
this has been an important theme
throughout this unit
ActivityActivity Ryanair reduces Stansted flights
What information would have been collated to help make this decision?
What are the factors contributing to this decision?
What are the advantages of using scientific decision making techniques for Ryanair?
How might different stakeholders respond to this decision?
BUSS4.11 Decision Making
EssayEssayJack Welch, CEO of GE, urges businesses not to sit on decisions. He advices “Don't set something aside instead of making a decision on the spot. In order to get speed, decisions at virtually every level have to be made in minutes, not days or weeks.” With reference to businesses you have studied to what extent do you agree with Jack’s views on making quick decisions. Justify your answer.
BUSS4.11 Decision Making
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