DECISION MAKING

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DECISION MAKING
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DECISION MAKING

• Decision Making is concerned with making choices,
  choosing between alternative courses of action
• We all make decisions everyday of our lives
• Decisions can be
• Short term
• Medium Term
• Long Term

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DECISION MAKING IN BUSINESS

• In Business it is usually the Owners or Managers
  that make decisions
• Different levels of Managers make different
  levels of decision
• There are 3 main levels of decisions
• Strategic Long Term
• Tactical Medium Term
• Operational Short Term

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STRATEGIC DECISIONS(Long-term decisions)

• Will affect the organisation over a number of
  years
• Taken by top levels of management (Board of
  Directors, Chief Executives, Heads of
  Departments)
• Set aims and objectives
• Produce policies for overall direction, purpose,
  competitive edge
• HIGH RISK (difficult to reverse)

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Examples of STRATEGIC Decisions?

• Whether to expand into new markets
• Whether to install new equipment
• Whether to take over a rival firm
• Where to locate or relocate business
• Whether to introduce new products/services
• Where to get finance for projects
• Whether to restructure
• Whether to move into bigger or smaller premises

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TACTICAL DECISIONS (Medium-term decisions)

• Will affect the organisation over 6 months to a
  year
• Taken by middle levels of management (Senior
  Staff, Factory Managers)
• Putting strategic decisions into action to
  achieve the aims and objectives
• MEDIUM RISK (take some time to change)

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Examples of TACTICAL Decisions?

• Whether to introduce new working arrangements in
  the office or factory
• Whether to increase/decrease overall stock levels
• Whether to increase/decrease staff levels in a
  department
• Whether to introduce flexitime
• Whether to have open plan layout
• Whether to use e-mail for all internal
  communications
• Whether to introduce remote working
• Whether to install video-conferencing facilities

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OPERATIONAL DECISIONS(Short-term Decisions)

• Will affect the organisation over a few
  days/months
• Taken by lower levels of management (Supervisors,
  Managerial Assistants)
• Dealing with the detail of tactical decisions
• Day-to-day decisions to meet standards/targets
• Making adjustments to suit changing circumstances
• LOW RISK (can be quickly changed at little cost)

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Examples of OPERATIONAL Decisions?

• Whether to move workers in office/factory from
  one job to another to meet a target
• Organising holiday rotas
• When to hold staff meetings in department
• Whether to reorganise filing system within office
• Whether to up-date advice on use of passwords
• Whether to introduce a new procedure for
  photocopying requests
• Banning staff from bringing in computer games
  from home to load onto network

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DECISIONS Strategic, Tactical and Operational

• Strategic
• Im going to make long-term decisions about my
  future.
• Tactical
• Im going to plan out how I will get there over
  the next six months.
• Operational
• Ill start tomorrow!