Question

How can managers make higher-quality decisions? Give an example of decision made by one company and discuss how the mangers will make high quality decision?

Answer 1

ANSWER:

The quick decisions are usually poor quality decisions, thus it is important the managers uses the methods and processes of ‘decision analysis’, to ensure that they make higher quality decisions and therefore have the best chance of achieving good outcomes. The main steps to making a high quality decisions are:

-- Frame the decision appropriately: Setting the right frame is very important.

-- Be clear about your targets: Be clear about the priorities if there are multiple targets.

-- Develop options: It is vital to create and identify a wide range of ‘doable’ alternatives that can be selected to achieve your desired outcomes

-- Gather meaningful information: Collect the useful information that impacts achievement of the goals.

-- Weigh the evidence and select the best: Using logical reasoning evaluate various alternatives which will achieve the goal, and choose the one that is expected to deliver the most value

-- Commit to action: Assigning the resources (money, time, and people) required to implement the decision.

For example: Sony’s decision making and strategies have been analysed by it's managers using time series forecasting and Porter’s five forces analysis. The decision making tools gave us it information about the internal and external factors of Sony’s business environment. By understanding those tools, the company’s attained competitive advantages to retain market shares both in developed as well as emerging markets. The manager's decisions on product differentiation; and stable cash flows helped in avoiding liquidity problems and focus on increasing sales.