Decision making
Decision making and
problem solving are the
meat and drink of
business life. Some
decisions are made
almost instinctively, but
more complex decisions
with many factors involved require the analysis
of a finite set of alternatives described in
terms of criteria which can be evaluated.
According to Wikipedia decision making might
be regarded as a problem solving activity
which is terminated when a satisfactory
solution is reached.
Decision making is a reasoning or emotional
process which can be rational or irrational, can
be based on explicit assumptions or tacit
decisions.
Decisions are often involuntary and following
the decision, we spend time analyzing the cost
and benefits of that decision. This is known as
“Rational Choice Theory,” which encompasses
the notion that we maximize benefits and
minimize the costs.
Most decisions are made unconsciously, and
using instincts learned from, and honed by,
experience. Jim Nightingale, Author of Think
Smart-Act Smart, states that “we simply decide
without thinking much about the decision
process.” In a classroom, instructors
encourage students to consciously weigh the
pros and cons before making a decision. But in
the real world, most of our decisions are made
unconsciously because it would take too much
time to evaluate the pros and cons of each
decision we make on a daily basis.
In business many forms of decision making are
used. Some decisions are made individually,
others by groups such as Boards. Some are
made by consensus, some by formal vote.
Usually the proposer will present the idea and
field questions from the Board, who will then
vote on the idea to reach a decision.
There are many decision models, principles and
tools used in Business. Many complex
decisions are debated by a team and become
the subject of analysis, discussion,
brainstorming and workshops.
Brainstorming
Brainstorming is a tool very often used in
business for problem solving, and it is often
credited with producing creative, radical ideas.
It can be carried out in many ways, and can be
useful for involving everyone in the team, no
matter how senior they are. In fact, often the
more junior team members, who are not mired
in the detail of management on a daily basis,
come up with the most effective ideas.
Brainstorming combines a relaxed approach to
problem solving with lateral thinking. It is
useful because conventional analytical
processes often lead to limited imagination and
ideas restricted by prejudgements or
assumptions that certain things are not
feasible or desirable.
Brainstorming provides an open environment
with no preconceptions .Everyone is
encouraged to contribute, to say whatever
comes into their mind without any evaluation
or consideration. Unconventional ideas are built
on, there is no judgement, comment or
criticism of the idea. The intention is to unlock
unconscious ideas, and to evaluate them at
this stage will stem the flow of creativity.
A careful brief needs to be given at the start
of brainstorming meeting. It needs to clearly
define the problem, requisites and parameters,
but not constrain the freewheeling nature of
the session and restrict ideas.
Ideas are thrown out which may spark even
more ideas from others. People are
encouraged to abandon their normal ways of
thinking. Ideas do not have to be fully formed
as thought through proposals, just thrown into
the arena to be discussed and developed later.
In a group session a facilitator may be
appointed, preferably not the manager, whose
job is purely to record ideas thrown out,
without comment. Usually this is done on a
white board, so everyone can see what is
written.
Sometimes the contributor of the idea will also
write it down on a post –it note, to enable
ideas to be grouped later. If you write ideas
down as they come into your head, this also
prevents blocking by other ideas, or forgetting
while you wait your turn to speak.
Once the brainstorm part of the session is
complete, the facilitator and manager will lead
an evaluation of the ideas using conventional
approaches, explore solutions further and
perhaps group similar ideas. Some of these
ideas can be developed into original, creative
solutions to the problem.
Part of the success of brainstorming is due to
the fact that the contributor does not have to
present a reasoned solution with all details
thought through. They just throw out the idea,
and the management team will deal with the
“how, when, and who” if the idea is worthy of
further consideration.
It brings team members’ different experiences
into play, and produces a rich seam of ideas
that can be explored, which means that better
solutions to the problems may be developed. It
also helps with buy-in from team members for
the solution chosen, it helps team members
bond, and solve problems in a positive,
rewarding environment.
Individual Brainstorming can also be effective,
but ideas may not develop as fully because you
don’t have the wider experience of other group
members to draw on. But you don’t have to
consider other people’s egos or opinions, so
you can be freer and more creative and
develop the idea further on your own.
Individual brainstorming is most effective for
solving simple problems, to generate a list of
ideas, or focus on a broad issue. Group
brainstorming is often more effective for
solving complex problems.
Sometimes the ideas that have emerged from
brainstorming become the subject of SWOT
and PEST analysis once they have been more
fully developed
SWOT and PEST analysis
Two of the most commonly used tools are
SWOT analysis, an acronym for
Strengths
Weaknesses
Opportunities
Threats
And PEST analysis, an acronym for
Political
Economic
Social
Technological
SWOT analysis deals with some internal factors
so usually analyses a business unit, a
proposition or idea. It is often used in
competitor analysis.
A PEST analysis deals with external factors so
usually analyses market potential, considering
factors such as growth or decline, strategy,
market attractiveness, business potential,
business and strategic planning, marketing
planning, business and product development.
Examples might be;-
A company looking at its product or market.
A strategic option, such as entering a new
market or launching a new product.
A potential acquisition or potential partnership.
Completing a PEST analysis can be useful prior
to completing a SWOT analysis.
In both SWOT and PEST analysis, it is
important to clearly identify the subject of an
analysis, as they are a four-way perspective in
relation to a particular business or proposition.
Both are usually presented as a grid, with the
relevant factors listed under the headings.
SWOT- subject definition -comparison to
Competitor A
Strengths
Cheaper
Better
customer
service
Weaknesses
Not as
technically
advanced
Cost of
customer
service affects
the profit line
Opportunities
Introduce more
advanced
model
Reduce cost of
customer
service-by
efficiencies
Threats
New models
Drop in
customer
service
PEST – subject definition –Entry to New
Market A
Political
Statutory/
Regulatory
requirements
Government
policy
Current/ future
legislation
international
legislation
ecological
issues/
incentives
international
trading policies
company /
group policies
funding, grants
and initiatives
lobbying/
pressure
groups
wars and
conflicts
Economic
Labour rates
Domestic
economic
situation
Domestic
trends
international
economics and
trends
local taxes
distribution
costs
seasonality/
weather
market and
trade cycles
market routes
and
distribution
interest and
exchange
rates
Social
cultural
aspects
health
consciousness
population
growth rate
age distribution
career
attitudes
Emphasis on
safety.
Technological
R&D activity,
automation,
technology
incentives
rate of
technological
change
The analysis can be quantified to facilitate
selection between several alternatives. This
can be done by scoring and weighting the
items in each of the sections and adding the
score for each box.
Decision making and
problem solving are the
meat and drink of
business life. Some
decisions are made
almost instinctively, but
more complex decisions
with many factors involved require the analysis
of a finite set of alternatives described in
terms of criteria which can be evaluated.
According to Wikipedia decision making might
be regarded as a problem solving activity
which is terminated when a satisfactory
solution is reached.
Decision making is a reasoning or emotional
process which can be rational or irrational, can
be based on explicit assumptions or tacit
decisions.
Decisions are often involuntary and following
the decision, we spend time analyzing the cost
and benefits of that decision. This is known as
“Rational Choice Theory,” which encompasses
the notion that we maximize benefits and
minimize the costs.
Most decisions are made unconsciously, and
using instincts learned from, and honed by,
experience. Jim Nightingale, Author of Think
Smart-Act Smart, states that “we simply decide
without thinking much about the decision
process.” In a classroom, instructors
encourage students to consciously weigh the
pros and cons before making a decision. But in
the real world, most of our decisions are made
unconsciously because it would take too much
time to evaluate the pros and cons of each
decision we make on a daily basis.
In business many forms of decision making are
used. Some decisions are made individually,
others by groups such as Boards. Some are
made by consensus, some by formal vote.
Usually the proposer will present the idea and
field questions from the Board, who will then
vote on the idea to reach a decision.
There are many decision models, principles and
tools used in Business. Many complex
decisions are debated by a team and become
the subject of analysis, discussion,
brainstorming and workshops.
Brainstorming
Brainstorming is a tool very often used in
business for problem solving, and it is often
credited with producing creative, radical ideas.
It can be carried out in many ways, and can be
useful for involving everyone in the team, no
matter how senior they are. In fact, often the
more junior team members, who are not mired
in the detail of management on a daily basis,
come up with the most effective ideas.
Brainstorming combines a relaxed approach to
problem solving with lateral thinking. It is
useful because conventional analytical
processes often lead to limited imagination and
ideas restricted by prejudgements or
assumptions that certain things are not
feasible or desirable.
Brainstorming provides an open environment
with no preconceptions .Everyone is
encouraged to contribute, to say whatever
comes into their mind without any evaluation
or consideration. Unconventional ideas are built
on, there is no judgement, comment or
criticism of the idea. The intention is to unlock
unconscious ideas, and to evaluate them at
this stage will stem the flow of creativity.
A careful brief needs to be given at the start
of brainstorming meeting. It needs to clearly
define the problem, requisites and parameters,
but not constrain the freewheeling nature of
the session and restrict ideas.
Ideas are thrown out which may spark even
more ideas from others. People are
encouraged to abandon their normal ways of
thinking. Ideas do not have to be fully formed
as thought through proposals, just thrown into
the arena to be discussed and developed later.
In a group session a facilitator may be
appointed, preferably not the manager, whose
job is purely to record ideas thrown out,
without comment. Usually this is done on a
white board, so everyone can see what is
written.
Sometimes the contributor of the idea will also
write it down on a post –it note, to enable
ideas to be grouped later. If you write ideas
down as they come into your head, this also
prevents blocking by other ideas, or forgetting
while you wait your turn to speak.
Once the brainstorm part of the session is
complete, the facilitator and manager will lead
an evaluation of the ideas using conventional
approaches, explore solutions further and
perhaps group similar ideas. Some of these
ideas can be developed into original, creative
solutions to the problem.
Part of the success of brainstorming is due to
the fact that the contributor does not have to
present a reasoned solution with all details
thought through. They just throw out the idea,
and the management team will deal with the
“how, when, and who” if the idea is worthy of
further consideration.
It brings team members’ different experiences
into play, and produces a rich seam of ideas
that can be explored, which means that better
solutions to the problems may be developed. It
also helps with buy-in from team members for
the solution chosen, it helps team members
bond, and solve problems in a positive,
rewarding environment.
Individual Brainstorming can also be effective,
but ideas may not develop as fully because you
don’t have the wider experience of other group
members to draw on. But you don’t have to
consider other people’s egos or opinions, so
you can be freer and more creative and
develop the idea further on your own.
Individual brainstorming is most effective for
solving simple problems, to generate a list of
ideas, or focus on a broad issue. Group
brainstorming is often more effective for
solving complex problems.
Sometimes the ideas that have emerged from
brainstorming become the subject of SWOT
and PEST analysis once they have been more
fully developed
SWOT and PEST analysis
Two of the most commonly used tools are
SWOT analysis, an acronym for
Strengths
Weaknesses
Opportunities
Threats
And PEST analysis, an acronym for
Political
Economic
Social
Technological
SWOT analysis deals with some internal factors
so usually analyses a business unit, a
proposition or idea. It is often used in
competitor analysis.
A PEST analysis deals with external factors so
usually analyses market potential, considering
factors such as growth or decline, strategy,
market attractiveness, business potential,
business and strategic planning, marketing
planning, business and product development.
Examples might be;-
A company looking at its product or market.
A strategic option, such as entering a new
market or launching a new product.
A potential acquisition or potential partnership.
Completing a PEST analysis can be useful prior
to completing a SWOT analysis.
In both SWOT and PEST analysis, it is
important to clearly identify the subject of an
analysis, as they are a four-way perspective in
relation to a particular business or proposition.
Both are usually presented as a grid, with the
relevant factors listed under the headings.
SWOT- subject definition -comparison to
Competitor A
Strengths
Cheaper
Better
customer
service
Weaknesses
Not as
technically
advanced
Cost of
customer
service affects
the profit line
Opportunities
Introduce more
advanced
model
Reduce cost of
customer
service-by
efficiencies
Threats
New models
Drop in
customer
service
PEST – subject definition –Entry to New
Market A
Political
Statutory/
Regulatory
requirements
Government
policy
Current/ future
legislation
international
legislation
ecological
issues/
incentives
international
trading policies
company /
group policies
funding, grants
and initiatives
lobbying/
pressure
groups
wars and
conflicts
Economic
Labour rates
Domestic
economic
situation
Domestic
trends
international
economics and
trends
local taxes
distribution
costs
seasonality/
weather
market and
trade cycles
market routes
and
distribution
interest and
exchange
rates
Social
cultural
aspects
health
consciousness
population
growth rate
age distribution
career
attitudes
Emphasis on
safety.
Technological
R&D activity,
automation,
technology
incentives
rate of
technological
change
The analysis can be quantified to facilitate
selection between several alternatives. This
can be done by scoring and weighting the
items in each of the sections and adding the
score for each box.
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