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Produce a report of that addresses the following questions:

1.Discuss the importance of decision making and the application of decision analysis.

2.Identify and outline a decision problem relating to your work or an external organisation, which involves multiple objectives. Typical examples might be choosing a new office location, a computer system, a raw materials supplier, a software package or a new service provider. Outlined decision problem should have a clear business case.

3.Apply the simple multi-attribute rating technique (SMART) to the outlined decision problem. Each stage of the analysis should be clearly defined and presented.

4.Discuss and detail the strengths and limitations of your analysis in the context of your decision problem
 

Application of Analytical Tool to Practical Decision Making Scenario

Decision making is always an essential part of current day management. It plays a vital role since they determine both managerial and organizational activities. It involves selection of course of actions from various alternatives for solving given a problem.

The assignment is prepared to involve an application of an analytical tool to a practical decision making scenario. It intends to assess strengths and weaknesses of that analysis.

The report discusses the significance of decision making and application of decision analysis. It has identified and outlined decision problem related to an external organization. Then it applies a SMART or “Simple Multi-attribute Rating Technique” to the decision problem outlined. Then a full strength and limitation of that analysis are discussed in the current decision problem context. 

As evidenced by the above-foregone definitions, a process of decision making can be said to be a conductive affair. This is done by a community of professionals driving better functioning of organizations. It is a dynamic and continuous activity pervading every activity about any organization. Thereby, decision making is a dynamic and continuous activity pervading every other activity that has been about the organization (Power, Sharda and Burstein 2015). As it is a continuous activity, it plays a crucial role regarding the functioning of companies. Intellectual minds have been included in the process of decision making of the company. It needed solid scientific knowledge assimilated with experience and skills along with mental maturity. This process to make decisions is seen as a check and balance system keeping firms growing both in straight and vertical decisions.

Decision making is regarded as the founding stone of business management because without its application at the right time, nothing can be achieved. Importance of decision making is illustrated here in the table below.

Importance of decision making

Discussion

Proper utilization of resources

 Companies possess different resources such as information, market, machine, material, method, money and man. These funds are appropriately used instead of any wastage and leakage with the help of proper decision at an appropriate time. Thus any corporation can operate any minimum cost.

Choosing best alternative

 Making decisions is vital for selecting best choices among different options through using finance, statistics and analysis (Zsambok and Klein 2014).

Evaluating managerial performances

 Judging performances of management present at the top level is essential.

Employee motivation

 It provides a complete framework to operate and guide the operating level of staffs. Various kinds of benefits and facilities are also offered on time.

Six steps are analyzed hereafter to support the process of decision making.

Problem identification

 This initial stage of decision making process has been to recognize the exact problem. It can be said that identifying the exact problem is about half part of decision making process.

Problem analysis

 As the correct problem is identified decision maker can analyze challenges scientifically and systematically as per as short and long-term effect of the problem (Hartman, DesJardins and MacDonald 2014).

Development of alternative course of action

 Problems have multiple decisions. Hence decision makers must develop different choices for a better decision.

Evaluation of alternative action course

 Decision makers must evaluate all alternatives for a better decision. Here some answers could be searched for following questions.

1. Whether that alternative has been feasible according to time, legality, cost and additional organizational resources?

2. Whether the alternative has been satisfactory for solving organizational problems?

3. Whether the alternative features have been matching with alternatives of business?

Selection of best alternative

 As various options are analyzed, a decision maker can select the best choice among different options considering multiple impacts (Solomon et al. 2014).

Implementing decision

 As the best alternative is selected, the superiors can convert decision to action. To do this, they can communicate with subordinates and manage different extra resources to implement an organizational decision.

Decision review

 The last step in decision making process has been to get a response to feedbacks from additional stakeholders of the company. As this reaction is positive, the decision making process gets completed successfully (Pettigrew 2014). However, as the response is negative, he can go through the initial step to undertake new organizational decisions.

Not only businesses sometimes get mixed up with problems or decisions, they only get just a half part of their decisions correct. To understand this more precisely, Equal Experts, at the United Kingdom is chosen. They are the network of experienced software consultants who are specialized in agile delivery. There is evidence that they have been certainly having decision making problems (Equal Experts, 2018).

Equal Experts has been needed to connect their objectives with those of company and department as a whole. They have realized a SMART setting of goals. They have been applying essential skills to set goals, cascade goals and prioritize. Various objectives estimated to be obtained by Equal Experts are conducting training where participants can cascade and bond objectives and goals at multiple levels of an organization. They must make a SMART analysis of a company and personal goals (García-Peñalvo and Conde 2014). Further, they must negotiate and assign SMART goals with their different subordinates. A structured approach is required for decision making. Best practices are to be utilized for communicating decisions. Lastly, they have intended to look for out-of-the-box strategies of problem solving. 

Significance of Decision Making and Application of Decision Analysis

Here some typical examples of decision problem are discussed.

Example 1:  Choosing new office location

Decision Problem

Discussion

Down Time

 The Time period of moving company location leads to downtime for business. As one handles this move or hires any moving company, one can face window as computers and business tools are packed. Employees have been finding that hard to finish tasks during the move (Reymen et al. 2017). Also, once they have arrived at a new location, one has been facing downtime as equipment is set up. It has potentially leaded to drop in sales or inability to serve customers.

Cost

 This move itself has been costing Equal Experts excessive money. This is particularly as they the control the progress. This also provides estimates for the cost of relocation. However actual prices are at many times higher than expected.

Customer access

 As one is unable to serve customers during that move, they have failed to touch their business. As Equal Experts has moved a notable distance from an old business location, some of their clients might find the new site very inconvenient.

Communicating that move

 As one prepares to move their business, one requires a system to alert customers and community about their progress. Equal Experts have let their clients know from before that access has been limited while the move has been going on. The information is included at a new location and Equal Experts has been functional at that position (Xu 2015). Failure to let their suppliers and clients know about move leads towards potential problems with having people show up old location has been finding it abandoned.

Example 2:  Choosing new Computer System

Problems

Discussion

A Dual Role

 At Equal Experts who have been managing technological change has needed to serve technical implementers and developers. So, as a rule, the organization has been developing technology and handing that off to various users. These users have been skilled less technically and quite knowledgeable regarding their areas of application.

Multiple Internal Markets

 Higher the organizational level at which managers of Equal Experts have been defining needs or problems, more significant is the successful implementation probability (De Maio et al. 2016). However, simultaneously closer has been solution and definition of needs or problems to end-users higher has been the success probability.

Promotion and Hype

 Various technology developers have confessed bewilderment that different innovations have never won automatic acceptances. They have been overly optimistic in believing that change has been itself a sell. However, it has been similarly dangerous for overselling new systems. Moreover, exotic and novel technologies are particularly vulnerable towards hype.

Risky Site and Safe Innovation

 There have been two causes to conduct any pilot operation before introducing any innovation around the board around a large organization. First one is to serve experiment and prove technical feasibility to top management. The second one has been to help credible demonstration model for additional units of Equal Experts (Rao and Tilt 2016.). However, for Equal Experts, these two reasons have not been compatible every time.

Legitimate Resistance to Change

  An overt resistance of Equal Experts towards innovation has often been growing out of mistakes and has been facing overlooked problems in any implementation plan.

Example 3: Choosing raw materials supplier

Problems

Discussion

Improper process definition

 Equal experts have been unable to identify methods to use to find suitable suppliers.

Call for bids

 For Equal Experts, it has been including RFQ or Request for Quotation and RFP or Request for Proposal. There has been lack of full details of services and products needed for delivery dates, quality standards and quantities (Gubler, Kalmoe and Wood 2015).

Improper an Evaluation in bid submissions

 Equal Experts have been unable to compare every presentation they receive against criteria checklist for question and suppliers regarding any items appearing lack of clarity.

Setting criteria

 Equal Experts have needed to develop a list of supplier selection criteria. This was required to provide with items they need. This included challenges like following.

•    Storage and handling facilities

•    Minimum and maximum order quantities

•    Return policy

•    Payment terms and conditions

•    Contactable references

•    Lead times from receipt of your order to delivery

•    Quality assurance processes

•    Specific methods of delivery

Monitor supplier performance

 The most trusted suppliers of Equal Experts have been slipping up occasionally. Moreover, the company was unable to ensure that they have direct contact point and conduct performance reviews regularly (Smyth and Lecoeuvre 2015). Thus they failed to keep tabs on their work and sure that they have been fulfilling the end of their agreements. Hence Equal Experts has been confused in understanding where they have been standing.

Example 4:  Choosing proper software packages

Problems

Discussion

Software price versus value

Pricing has been integral to deciding for Equal Experts. However, it has been a significant issue to determine the best software for the company (Schwartz 2017).

Assisted implementation

As any specific piece of software has been coming with a monthly agreement, Equal Experts have been unaware of options to end that contract and what penalties have accompanies that decision.

Fixing bugs

 As it came to purchase proper software for Equal Experts, they have been unaware of procedures of Software Company to fix the bugs as they arise.

Example 5: Choosing new service provider

Problems

Decision

Longevity

 Equal Experts has been unable to verify provider’s history through searching press releases seeking for financial statements and checking references.

Insurance

 Through checking that provider has been appropriately insured, Equal Experts has not been specified whether the cost of mistakes made on their part would be paid. They have been unable to verify that their provider possesses current policy in place as they have done for outside vendors (Levy 2015).

Billing structure

 There is insufficient billing structure for Equal Experts revealing company’s integrity.

Staff

 Equal Experts never asked about their staffing levels at their managed service providers never outsourced services. There have been more personnel needed to handle their business.

Response times

Managed service providers have been unable to provide then an upfront estimate regarding response time in any particular situation. Hence there is a lack of giving them proper ideas of time it took to fix problems that might arise in future.

Ability to innovate

 Equal Experts has been showing lack of ability to offer latest services and adopt new technologies earlier (Kaner 2014). Moreover, managed service provider, staying at the top of most recent innovations and offering most advanced options is unable to assure that the organization remains relevant, functional and contemporary.

It is a comprehensive model of decision-makers for accounting things which has been quantitative and qualitative. In decision-making model, SMART is a technique for covering shortfalls from prior models instead of any computerizations. The method is also helpful to structure environment and systems to components to interact with each other and regulate effects of elements of system error.

Decision making under the business world possesses a severe effect. Due to the choices managers or business owners can determine success and failure of a business. This is the way in which the people undertake decisions with paramount importance. As some has been electing to look at some options, then conduct choice others have been looking at those possibilities into consideration (Cao, Duan and Li 2015). They are used to craft an entirely new opportunity merging best parts of original choice. The process of integrative decision making possesses some main benefits. This has made the process of SMART a worthy consideration for decision makers.

Primarily, chief executive officers are responsible for making every significant decision. However, as organizations grow their managers often undertake decisions collectively. Making group decisions is a formal process to arrive at conclusions. This includes voting, consensus and election of leaders for making final decisions.

Decision support system is intended to assist management. It combines abilities of a computer in interactive service with manipulation and processing models or data utilizing rules of unstructured settlement (Shepherd, Williams and Patzelt 2015). One of the most accessible methods to react to immediate necessities of decision makers is the SMART method. It is applied to providing a weight of all criteria illustrating how crucial those have been comparing to others.

Moreover, the primary tool of the model is a functional hierarchy where the most critical input is human perception. Hence there has been no notable difference in a SMART model with additional models at the same line in that kind of information. There has been a percentage for every linear weighting found out by results of problem analysis. This SMART weighting method is the method to support the most straightforward decision (Wang and Byrd 2017). Here some parameters have been determining the choice. These kinds of settings have been ranging with various weight and values of every alternative.   This amount has been determinant of a decision taken. A weighting of SMART method is done using a scale between 0 to 1. It helps in simplifying comparison and calculation of a value of every alternative.

The Six-Step Process of Decision Making

The primary stages of SMART analysis are discussed hereafter.

Figure 1: “Stages of simple multi-attribute rating technique”

(Source: Barron and Barrett, 2018)

Below every stage of a SMART process to be undertaken by Equal Experts is demonstrated.

Stage of analysis

Discussion

1. Determining the number of criteria used

 It is the initial stake to make a decision using a SMART method. It is the first to find alternatives used as experimental.

2. Determining the criteria weights

 This is done to each criterion through utilizing 1-100 interval for every criterion with most urgent priority.

3. Calculating the normalization

 This is done for every criterion through comparing weights of criteria by some criteria weighted.  

4. Providing criteria parameter value

 This is done on every criterion related to every alternative.

5. Determining the value of utility

 This is to convert value of every criterion for every criterion to that value of raw data criteria.

6. Determining the final value of every criterion

 This is to be done by shifting values that are obtained from the normalized value of raw data criteria. This is done by weighing the normalized value criteria (Azar, Bouaynaya and Polikar 2015).

Like every other method, decision making has its pluses and minuses.

Strengths of decision making

                                      Discussion

 Critical thinking

 As decision makers use skills of critical thinking, he is more likely to be successful. Thus the strengths and weaknesses at every point are beneficial. The chances of making a choice also get improved (Wheelen et al. 2017).

Use of Creativity

 Using creativity likelihood is developed. This indicates individuals had to reach the best place.

Pleasing Multiple Audiences

 As decision makers can assimilate various options, he develops chances to meet customer needs. Since satisfied customers have been translating into sales, meeting needs of customers is of high importance under business sphere.

Satisfying Workers

 While managers face choices, he needs to deal with multiple camps of workers. All of them have been rooting decisions that are beneficial to them (Graham, Harvey and Puri 2015). He can merge opinions and improve chances to please more of their workers. Here lesser workers can feel that they have just lost their fight.

 Weaknesses: 

Weaknesses

Discussion

Time drain

 Drawback of decision making is that it raises the period to undertake decisions.

Disagreements and groupthink

 As managers possess fundamental disputes regarding how to go about making decisions, it is hard for a group to reach consensus. Moreover, group thinking also reduces creativity and knowledge sharing (Hoefer and Green 2016). Thus some of the critical benefits towards decision making get diminished.

Conclusion:

In a humanist system, continuous transmission of opinion permits human thinking to undertake change decision rapidly. The above report is helpful to develop detailed knowledge of decision making by management. It has evaluated models of decision making. For this Equal Experts, a company is chosen. It is understood that knowledge base, sufficient level of communication skills and thinking and organized strategy or approach is needed to solve problems. Knowledge bases are unique for every question. No general statements are applicable other than individual or group. They must comprehend concepts, principles, fact relevant to the particular situation and applied to them. While taking part in the problem-solving process in any category, two extra advantages take place. Firstly, people can learn to value alternative viewpoints and preferences through considering differences in others. This consideration is done as per strengths instead of less value or wrong thing. Moreover, development of individual decision-making power gets enhanced through a process with others in a group situation. 

References:

Azar, A.T., Bouaynaya, N. and Polikar, R., 2015, August. Inductive learning based on rough set theory for medical decision making. In Fuzzy Systems (FUZZ-IEEE), 2015 IEEE International Conference on (pp. 1-8). IEEE.

Barron, F. and Barrett, B. (2018). The efficacy of SMARTER — Simple Multi-Attribute Rating Technique Extended to Ranking.

Cao, G., Duan, Y. and Li, G., 2015. Linking business analytics to decision making effectiveness: a path model analysis. IEEE Transactions on Engineering Management, 62(3), pp.384-395.

De Maio, C., Fenza, G., Loia, V., Orciuoli, F. and Herrera-Viedma, E., 2016. A framework for context-aware heterogeneous group decision making in business processes. Knowledge-Based Systems, 102, pp.39-50.

Equal Experts. (2018). Equal Experts. [online] Available at: https://www.equalexperts.com/ [Accessed 3 Feb. 2018].

García-Peñalvo, F.J. and Conde, M.Á., 2014. Using informal learning for business decision making and knowledge management. Journal of Business Research, 67(5), pp.686-691.

Graham, J.R., Harvey, C.R. and Puri, M., 2015. Capital allocation and delegation of decision-making authority within firms. Journal of Financial Economics, 115(3), pp.449-470.

Gubler, J.R., Kalmoe, N.P. and Wood, D.A., 2015. Them’s fightin’words: The effects of violent rhetoric on ethical decision making in business. Journal of business ethics, 130(3), pp.705-716.

Hartman, L.P., DesJardins, J.R. and MacDonald, C., 2014. Business ethics: Decision making for personal integrity and social responsibility. New York: McGraw-Hill.

Hoefer, R.L. and Green, S.E., 2016. A rhetorical model of institutional decision making: The role of rhetoric in the formation and change of legitimacy judgments. Academy of Management Review, 41(1), pp.130-150.

Kaner, S., 2014. Facilitator's guide to participatory decision-making. John Wiley & Sons.

Levy, H., 2015. Stochastic dominance: Investment decision making under uncertainty. Springer.

Pettigrew, A.M., 2014. The politics of organizational decision-making. Routledge.

Power, D.J., Sharda, R. and Burstein, F., 2015. Decision support systems. John Wiley & Sons, Ltd.

Rao, K. and Tilt, C., 2016. Board composition and corporate social responsibility: The role of diversity, gender, strategy and decision making. Journal of Business Ethics, 138(2), pp.327-347.

Reymen, I., Berends, H., Oudehand, R. and Stultiëns, R., 2017. Decision making for business model development: a process study of effectuation and causation in new technology?based ventures. R&D Management, 47(4), pp.595-606.

Schneckenberg, D., Velamuri, V.K., Comberg, C. and Spieth, P., 2017. Business model innovation and decision making: uncovering mechanisms for coping with uncertainty. R&D Management, 47(3), pp.404-419.

Schwartz, M.S., 2017. Business Ethics: An Ethical Decision-making Approach. John Wiley & Sons.

Sekaran, U. and Bougie, R., 2016. Research methods for business: A skill building approach. John Wiley & Sons.

Shepherd, D.A., Williams, T.A. and Patzelt, H., 2015. Thinking about entrepreneurial decision making: Review and research agenda. Journal of management, 41(1), pp.11-46.

Smyth, H. and Lecoeuvre, L., 2015. Differences in decision-making criteria towards the return on marketing investment: A project business perspective. International Journal of Project Management, 33(1), pp.29-40.

Solomon, M.R., Dahl, D.W., White, K., Zaichkowsky, J.L. and Polegato, R., 2014. Consumer behavior: Buying, having, and being (Vol. 10). Pearson.

Wang, Y. and Byrd, T.A., 2017. Business analytics-enabled decision-making effectiveness through knowledge absorptive capacity in health care. Journal of Knowledge Management, 21(3), pp.517-539.

Wheelen, T.L., Hunger, J.D., Hoffman, A.N. and Bamford, C.E., 2017. Strategic management and business policy. pearson.

Xu, Z., 2015. Uncertain multi-attribute decision making: Methods and applications. Springer.

Zsambok, C.E. and Klein, G. eds., 2014. Naturalistic decision making. Psychology Press.

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