Business strategy: A guide to Effective Decision making Essay

Strategies decisions depends highly on perceptions, peoples attitudes and assumptions, therefrom they atomic number 18 r arly straightforward or simple. Strategic decisions determine the direction as well as success of an organization, which is why it is essential for decision- bafflers to understand the decision-making carry out in bless to make the right decisions. Chapter 2, 3, and 4 nidus on introducing forces which will form a decision, including ideas, developments and potential pitfalls. In chapter 4, a practic adequate and useful framework is also created to guide mistreat by step in a decision-making process.Chapter 8 outlines insights and techniques for implementing and improving decisions in order to realize a competitory strategy. Chapter 12 introduces forces which will gull affection in sales, marketing and brand management decisions. It is necessary to understand the decision-making process and otherwise involved factors to be able to create a practical and militant strategy. Right decisions will make a immense wallop on troupes directions as well as success in the future. Chapter 2 Ideas at Work Setting a strategy has ever so been complex due to the turns that company has to face over prison term.There argon several(prenominal) factors that will affect the decision making process. Decision-making approaches The classical executive The classical administrator, which was founded by Henri Fayol, has become the most traditional model of the decision-makers or strategists. A set of common activities and principles of managements was developed and divided into five sections planning, organizing, commanding, arrange and controlling. Planning involves setting the goals of the organization and developing an action plan for future success.Organizing involves structuring the organization and using necessary resources to achieve these aims. Commanding makes sure the optimum return from people, which is usually considered the most expensive comp binglent of a furrow. arrange involves focusing on peoples effort to achieve the goals. visualise makes sure that everything is going according to plan, making adjustment when necessary to match success. The design planner When the strategy is planned, the techniques of the classical administrator would be employ to implement the strategy.Design planning will help the implementation process and it requires expertise in two areas Analyzing and anticipating the future environment, techniques and models. Be aware of the away opportunities and threats internal strengths and weaknesses. The role player The role player involves in the strategicalalal decision-makers job as a reflective and analyzing planner and controller, to make sure the plan is realistic and practical. The competitive military poster It is crucial for competitive positioner to understand the power of the external environment in order to achieve competitive advantage.Customers and suppliers, substitute products, present and potential competitors are considered competitive forces. The competitive positioned should be able to eliminate barriers to enter its market, set a competitive prices, reduce operating cost and be aware of its rivals. The seer transformer Vision is one of the fundamental tools to make a strategic decision, and it should focus on answering the following questions Where in the market should the organization position itself? Brand positioning? How should the organization achieve its goal?However, visions should be manageable and visionary transformers should be able to ensure that they are achieved. The self-organizer The self-organizer needs the tycoon to network, innovate and collaborate with people to achieve the organizations goal. The reverse gear strategist The turnaround strategist focuses on turning around the process of an organization once a visionary leader has failed. It is in-chief(postnominal) to conciliate new control systems quickly, find out the reasons for failing and be able to reverse them. Financial issuesThere are three financial issues that see strategic decisions, they are cash management, risk management and budgeting. It is important for company to be able to manage its cash flow and have an efficacious financial control while implementing strategic decisions. imperious cost Controlling costs, by saving money, making cost-cutting is one way to boost mesh and reduce losses. Managing for value implementing the balanced scorecard The balances scorecard takes into account quatern important perspective of activity, they are financial perspective, customers, internal processes, innovation and training perspective.The main stages of implementing the balanced scorecard include Preparing and delineate the strategy, deciding what to measure, finalizing and implementing the plan, advertising a d using the results, reviewing and revising the system. The rise of technology and the impact on technology on decision- making The rise of technology has opened up a multiple ways to add value, increase sales, reduce costs and manage to a greater extent expeditiously, therefore technology has make a huge and diverse impact on traffic decisions.Factors that affect a business and decision-making such as adding value, understanding customer needs, competitive advantage and assessing costs rear be done much faster and more efficient with the help of technology. That is why it is definitely important to use and manage study systems properly to take the best out of it. Chapter 3 Pitfalls In this chapter, several types of failure may be encountered in decision-making process, such as thought process flaws, leadership flaws and cultural flaws.Behavioral flaws In order to avoid traps made by human brain while making decisions, common traps should be recognized and understood which ones are likely to influence decision-makers thinking. slightly common traps which were mentioned in this chapter were the a nchoring trap, the status quo trap, the sunk-cost trap, the confirming-evidence trap, the overconfidence trap, the framing trap, the recent publication trap, and the prudence trap. Leadership flaws Leadership flaws can also affect strategic decisions.One of them is failure of understanding, when the leader does not properly understand a problem. Another common flaw is aptistic planning, when everybody assumes that there is only one effective choice, therefore, leads to only one conclusion. Decision-making pitfalls Cultural flaws The culture of an organization can make a negative effect on strategic decision, and atomization occurs when people are in disagreement. In the other hand, groupthink is when an idea is devoted because it is supposed to harmony with the majority.Such behaviors are common and therefore, decisions may be affected by the cultural of an organization. Failure to respond to change It is important to sense when to change before the business goes down and gets ba nkrupt. Responding to the need to change may be not easy, due to other external factors, however changing in the right way and at the right time is crucial to remain the business in the market. Overcoming decision-making problems It is usually much more difficult to over problems than just pointing them out.When looking for a solution, two main factors should be considered seriously the ability of the decision maker and the importance of scrutiny and perfecting decisions. Some other ways to overcome problems and aim to effective decision-making are being aware (and raising awareness among others), avoiding subjective or unreasoning analysis, being sensitive, establishing clear priorities and objectives, fostering creativity and innovation, understanding substantive issues and support but not least, focusing on the relevance and potency of the business idea.Organizational schooling and scenarios Two popular approaches that can be employ to avoid the pitfalls of strategic thinki ng are adaptive organizational learning and scenario thinking. Adaptive organizational learning means continuing the process by adapting new changes to suit the organizational environment and to improve performance. Scenario thinking is a process which is divided into two parts a formal factor designed by managers, and an informal part, characterized by casual conversations.Chapter 4 sage or primordial? Frameworks for decision-making The rational approach Assessing the situation Assessing the situation is the inaugural step of rational decision-making process. It starts by asking whether the decision relates to a everlasting issue or it is the result of an isolated event, therefore the decision-maker may have some idea of what to do in the next step. Defining the deprecative issuesWhen considering a decision, all aspects should be taken into account, and funneling is a useful and rational technique to be used. The method involves collecting information, then prioritizes and el iminates issues that aroused base on the data that were collected and analyzed. Specifying the decision This step defines what the decision must achieve. By defining the minimum set of goals, this helps to ensure focus and collected implementation. Making the decision Compromise is usually involved in the decision-making process.In this stage of the process, embracing with creativity and innovation may ensure the strategic decision will be implemented successfully. Implementing the decision After defining the decision, executing it is usually the most critical and time-consuming phase. These following factors are involved planning how it will be implemented, assigning the tasks clearly and specifically, communicating, move and rewarding, managing resources to ensure that people carrying out the decision have the necessary equipment to discharge their task.Monitoring and making adjustments It is very important to monitor the implementation so that everything is going according t o plan and adjustments can be made in time. Decision-making is a cycle, from the last step comes back to the first step again, therefore the assessment of the next decisions should start will the monitoring of current ones. The intuitive approach