Management decisions

Topics: Decision making, Decision theory, Strategic management Pages: 7 (2071 words) Published: November 20, 2013


Contents

Introductionp, 2
Management Decisionsp, 2-3
Strategic p, 2
Tacticalp, 2
Operationalp, 2
Structured and unstructuredp, 3
The decision Making processp, 3-4
Normative Modelp, 3
Descriptive Modelp, 3, 4
Factors Affecting Decision Makingp, 5
Internal Factors
External Factors
Conclusion p, 6
Recommendations p, 6
Reference Listp, 7
Appendix 1p, 8
Appendix 2p, 9

Introduction
Paragon is a decentralized organisation as it has relatively few layers of management, with few centralized policies and procedures. The lack of management structure within the organisation has led to a haphazard and unstructured approach to decision-making. Strategic decisions are being made by departments and are failing to consider the needs of others. Counterproductive decisions are being made in relation to the future of the business. In order to help Paragon to understand the main fundamentals of decision making, and apply it to their company this report will be looking at the different types of management structures, explaining the decision making process, and reviewing the internal and external factors that can have an impact on the decision making of an organisation. Management decisions

There are different levels of decision making within an organisation, which include strategic, tactical and operational. (Appendix 1) Strategic decision-making determines the goals and purpose of a whole organisation, and is concerned with the long-term overall direction. These types of decisions are normally the responsibility of top management. Decisions at this level have an effect on how a business will relate to external environments. These types of decisions are normally not very specific as they must be applied to all levels in an organisation. For Example a strategic decision might be to focus efforts on a new product or to increase production output. These types of decisions are often complex and the outcomes uncertain as the availability of information is often limited. (Montana.PJ, Charn ov.BH, 2008 ,pg.96) Tactical decision making focuses on more intermediate-term issues, and is typically carried out by middle managers, such as division or department managers. Rather then apply to the whole organisation a tactical decision may only apply to one department. At this level the purpose of the decisions made are to help move the company closer to reaching the strategic goal. An example of a tactical decision would be picking an advertising agency to promote a new product. (Montana.PJ, Charnov.BH, 2008, pg.96) Operational decision making determines the decisions that concern the day to day running of an organisation. These decisions are normally made by the lower level managers or supervisors. The Decisions that are made at this level help to ensure that daily activities proceed smoothly helping to move a company towards reaching its strategic goal. These types of decisions deal with the short-to medium- term matters and deal with part or parts of an organisation. Examples of operational decisions include scheduling employees and day to day activities, purchasing raw materials needed for production, and handling employee conflicts. (chapter 1) Structured and unstructured decisions- In general a strategic decision is unstructured, a tactical decision is semi-structured, and an operational decision is structured. In a structured decision the goals are defined and the factors affecting the decision and its outcomes are known. The information is obtainable and manageable, and procedures are clear. Decisions can be converted to a programme of actions; hence structured decisions are called programmable. The hiring process is a good example; the process is already in place. Selecting an additional head count may require some persuasion and justification, but the process to follow is defined. (Stewart J, 2011) Unstructured decisions are the opposite; the outcome is unclear, the required information and...
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