Scribd
Upload
48 views3 pages

Decision-Making in Business Management

The document discusses fundamentals of business management and decision making. It identifies six key areas of business management: people, operations, accounting, strategy, finance, and marketing/PR. It then discusses decision making, noting it involves both subjective and objective evaluation. The decision making environment can involve certainty, uncertainty, or risk. Key components of decisions are context, objectives, options, and criteria. An effective decision making process involves determining context and objectives, listing options, establishing criteria, evaluating options against criteria, selecting options, and analyzing risks.

Uploaded by

Coreen Elizalde
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
48 views3 pages

Decision-Making in Business Management

The document discusses fundamentals of business management and decision making. It identifies six key areas of business management: people, operations, accounting, strategy, finance, and marketing/PR. It then discusses decision making, noting it involves both subjective and objective evaluation. The decision making environment can involve certainty, uncertainty, or risk. Key components of decisions are context, objectives, options, and criteria. An effective decision making process involves determining context and objectives, listing options, establishing criteria, evaluating options against criteria, selecting options, and analyzing risks.

Uploaded by

Coreen Elizalde
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

FUNDAMENTALS OF BUSINESS MANAGEMENT AND DECISION-

MAKING

BUSINESS MANAGEMENT

1. People
Key leadership and communication skills are necessary to be a successful
leader and build a strong organization.

2. Operations
Managing a supply chain and making sure production meets demand
under tight deadlines can be incredibly complex and is critical to business
success.

3. Accounting
Proper management of the day to day accounting and finances of a
business

4. Strategy
The ability to take a high-level, strategic view of a business is necessary to
identify opportunities and to stay ahead of external forces such as new
competition and changing consumer demand.

5. Finance
Smart financial planning and decision-making create value for your
organization and ensure its growth into the future.

6. Marketing and PR
Marketing is much more than simply advertising a product or service. You
must identify and interact with your customer, stay on top of their
changing needs and desires and deliver a strong value proposition.

DECISION MAKING

Decision making process is more than simply following a list of steps, it even
combines subjective and objective evaluation of certain conditions.
Nevertheless, the manager must be as rational as possible, drawing upon all
available techniques and guidelines in choosing among the various
alternatives. Let us look at some of the basics of decision making.

● Decision-Making Environment

The quality of the decisions made in an organization will dictate the


success or failure of the said business. So, all the available information and
alternatives must be studied before arriving at an important decision.
1. Certainty

This means that all the information is available and at hand.

2. Uncertainty

In the decision making environment of uncertainty, the information


available to the manager is incomplete, insufficient and often
unreliable. In an uncertain environment, everything is in a state of flux.

3. Risk

Which means the manager has to first ascertain the possibility and
probability of the occurrence or non-occurrence of the event. The
manager will generally rely on past experiences to make this
deduction.

● Components of Decisions

A structured decision-making process ensures that important decisions


are made on time and are based on facts, research, and analysis.

The most important aspect of structured decision-making is to recognize


and analyze the basic components of decisions.

1. Context

2. Objectives

3. Options

4. Criteria
● Decision-Making Process

An effective decision-making process ensures that all four components


are analyzed. Templates are used to simplify the work and remind us of
important aspects of each component. The steps are normally
completed in a sequential manner. However, it is acceptable to skip
ahead and quickly jot down some information while it is fresh in one's
memory, or to jump back and fill in new information that was overlooked
initially.

Step 1: Determine the importance and the context of the decision


Step 2: Determine the objectives for the decision

Step 3: List all options

Step 4: Explore promising options

Step 5: Establish decision-making criteria

Step 6: Evaluate the options against the criteria

Step 7: Select the options to pursue

Step 8: Analyze the risks

You might also like