Business Management - Intermediate 2Business Enterprise © Copyright free to Business Education Network members 2007/2008B106/078 – Bus Enterprise – Decision Making 1

Business Management - Intermediate 2Business Enterprise © Copyright free to Business Education Network members 2007/2008B106/078 – Bus Enterprise – Decision Making 2

Business Management - Intermediate 2Business Enterprise © Copyright free to Business Education Network members 2007/2008B106/078 – Bus Enterprise – Decision Making 3

Business Management - Intermediate 2Business Enterprise © Copyright free to Business Education Network members 2007/2008B106/078 – Bus Enterprise – Decision Making 4 BUSINESS ENTERPRISE Decision Making Types of Decision Decision Making Process

Business Management - Intermediate 2Business Enterprise – Decision Making © Copyright free to Business Education Network members 2007/ Types of Decision Decision Making B106/078 – Bus Enterprise – Decision Making 2.Decision Making Process

Business Management - Intermediate 2Business Enterprise – Decision Making © Copyright free to Business Education Network members 2007/ Types of Decision There are 3 types of decision Strategic Tactical Operational B106/078 – DM – Type of Decision Decisions made by junior managers as required (short term) in response to minor problems that occur. Decisions made by middle/senior management about how over a reasonable period of time (the medium-term) the organisation will go about achieving its strategic decisions. Decisions made by senior management about the long-term strategies to be adopted by the organisation in order to achieve its Objectives.

Business Management - Intermediate 2Business Enterprise – Decision Making © Copyright free to Business Education Network members 2007/ Strategic decisions – considerations: where is the business at now? where do we want the business to be in the future? what resources do we have or will we need to be able to achieve this? 1. Types of Decision - continued B106/078 – DM – Type of Decision

Business Management - Intermediate 2Business Enterprise – Decision Making © Copyright free to Business Education Network members 2007/ Examples of strategic decisions: to expand the business through integration. to increase profits by 20% in the next 2 years. to become the market leader within their field. 1. Types of Decision - continued B106/078 – DM – Type of Decision

Business Management - Intermediate 2Business Enterprise – Decision Making © Copyright free to Business Education Network members 2007/ Examples of tactical decisions: to provide a better quality service to customers. to cost cut and reduce prices of goods. to achieve greater custom and profits. to beat competition and become the market leader. 1. Types of Decision - continued B106/078 – DM – Type of Decision

Business Management - Intermediate 2Business Enterprise – Decision Making © Copyright free to Business Education Network members 2007/ Examples of operational decisions: to employ agency staff to cover a short-fall. to buy in more of a product that is selling well. to provide a work rota for staff. 1. Types of Decision - continued B106/078 – DM – Type of Decision

Business Management - Intermediate 2Business Enterprise – Decision Making © Copyright free to Business Education Network members 2007/ The role of managers: To make the best decisions possible to achieve the best outcome(s). How Do They Achieve This? gear decisions towards organisational goals. make the best use of the resources available to them. involve all staff in the decision-making process. delegate responsibility appropriately. B106/078 – DM – Decision Making Process 2. Decision Making Process

Business Management - Intermediate 2Business Enterprise – Decision Making © Copyright free to Business Education Network members 2007/ The influence of stakeholders – some examples Shareholders want greater dividends. Decision: adjust prices in order to increase profits. Employees can choose to work slower. Decision: increase wages, offer bonuses and better working conditions. 2. Decision Making Process – continued B106/078 – DM – Decision Making Process

Business Management - Intermediate 2Business Enterprise – Decision Making © Copyright free to Business Education Network members 2007/ Customers may choose to buy elsewhere. Decision: improve the quality of their products ; invest in new technology. Suppliers may increase their prices. Decision: change supplier or to increase our prices to compensate. B106/078 – DM – Decision Making Process 2. Decision Making Process – continued

Business Management - Intermediate 2Business Enterprise – Decision Making © Copyright free to Business Education Network members 2007/ Banks may refuse lending. Decision: borrow funds from an alternative or to alter their aims. Government increases the minimum wage rate. Decision: increase our prices and/or provide more training to create a more efficient workforce. B106/078 – DM – Decision Making Process 2. Decision Making Process – continued