1. Contemporary Business Issues Decision Making Techniques Module Tutor: Nigel Bryant Session 9 – 11 th March 2016

2. Module Outline 1.Introduction to Contemporary Business Issues 2.Strategic Management Theory 3.Layers of Business Strategy 4.Case Study Analysis 5.Strategic Planning 6.Reading Week 7.Change Management Theory 8.Assignment Workshop and Individual Tutorials 9.Assignment Workshop and Individual Tutorials 10.Decision Making Techniques 11.Review of the Decision Making Process 12.Reading week 13.Reading week 14.Assignment Workshop and Individual Tutorials 15.Assignment Workshop and Individual Tutorials Module Evaluation

3. A theoretical review of decision making processes. Use of a case study to allow critical analysis 3 Learning Outcomes

4. Decision making is the cornerstone of planning. Decision making is the catalyst that drives the planning process. Deciding on the best plan for achieving particular goals also reflects a decision to adopt one course of action as opposed to others. Understanding the environment is essentially the first step in planning. Managers must establish the organisation’s mission. Directly following the mission are strategic goals. 4 Decision Making Process

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6. Rational Scientific Model Stages 1. a search to discover goals 2. the formulation of objectives 3. the selection of alternatives (strategies) to accomplish objectives 4. the evaluation of outcomes Etzioni (1967)

7. 7 Decision Making Process What are the inherent limitations of this model?

8. Rational decisions are choices based on rationality, that is, on a rational mode of thinking. Rational decision making assumes that decisions are made in the best interests of the organisation on the basis of data collection and analysis, along with evaluation of alternatives. 8 Concept of Rational Decision Making a

9. Classical decision theory assumes that decision makers are objective, have complete information and consider all possible alternatives and other consequences before selecting the optimal solution. The rational economic model assumes that decision making is and should be a rational process, consisting of a sequence of steps that enhance the probability of attaining a desired outcome. 9 Concept of Rational Decision Making

10. Rational Scientific Model Criticisms l narrow constraints l utopian ambiguity l biased management l rigid ends and means l impractical size

11. Bounded Rationality limited perception/understanding/knowledge optimising vs. satisficing rational choice vs. rational process Simon (1959)

12. Behavioural Approach 1. problem  search 2. search reflects training, experience and goals of the organisation 3. search in the neighbourhood of the problem’s symptoms 4. search in the neighbourhood of the current alternatives 5. a short-run model 6. model accepts a coalition of groups 7. model accepts a multiplicity of goals 8. satisficing 9. failure  wider search Cyert and March (1963)

13. Partisan Mutual Adjustment crystallises Cyert and March decisions affected by partisans partisans have strength and direction need to identify fellow partisans Lindblom (1964)

14. Incrementalism “The Science of Muddling Through” 1. policy evolves 2. polycentric decision making 3. consensus 4. marginal choices 5. limited number of alternatives 6. limited number of consequences 7. means not ends 8. gradual change Lindblom (1964)

15. Mixed Scanning rational overview of decision incremental implementation Etzioni (1967)

16. Cognitive Dissonance There is a tendency for individuals to seek consistency among their cognitions (i.e., beliefs, opinions). When there is an inconsistency between attitudes or behaviours (dissonance), something must change to eliminate the dissonance. Festinger (1957) 1.I bought a Volvo. 2.BMW make excellent cars.

18. The Pure Package is a daily food delivery service, delivering freshly prepared, highly nutritious meals and snacks around London and the M25 area. Founder Jennifer Irvine is considering moving to a larger premises. Read through the case study and address the issues. 18 Case Study

19. Founder Jennifer Irvine recognised the importance of having fresh and seasonal ingredients close to her kitchen. So she moved The Pure Package to the UK's largest fruit and vegetable market. Here, she talks about the issues that affected her decision. https://www.youtube.com/watch?v=siSbKKv9N38#t=14 19 Case Study

20. A Reminder - the Assignment Brief You will be required to identify two key business issues currently facing the Lloyds Banking Group. You must: - Identify the issues by using a range of analytical tools - Critically analyse the impact of those issues on each layer of business (strategic, operational and individual) Focussing on one of these key issues, you must: - Justify your choice of issue - Provide appropriate business solutions to the issue identified - Analyse the business solution implemented by Lloyds Banking Group - Investigate and evaluate the decision making process undertaken by Lloyds Banking Group. You will be required to present their findings in a 3,000 word formal report with relevant academic underpinning.

21. A Reminder - Deadlines Assignment draft report: Week beginning 11 th April 2016 It is highly recommended that you submit a draft report during the week beginning 11 th April. This is a complex module and students that have done well in the past have ensured that a draft has been submitted. The draft assignment will not be marked, but it will allow you the opportunity to have a valuable discussion regarding your report with the lecturer during weeks 11 and 12. Submit Assignment: 28th April 2016