DECISION MAKING

DECISION MAKING

Decision Making is concerned with making choices, choosing between alternative courses of action

We all make decisions everyday of our lives Decisions can be

Short term Medium Term Long Term

DECISION MAKING IN BUSINESS In Business it is usually the Owners or

Managers that make decisions Different levels of Managers make different

levels of decision There are 3 main levels of decisions

Strategic – Long Term Tactical – Medium Term Operational – Short Term

STRATEGIC DECISIONS(Long-term decisions) Will affect the organisation over a number of

years Taken by top levels of management (Board of

Directors, Chief Executives, Heads of Departments)

Set aims and objectives Produce policies for overall direction, purpose,

competitive edge HIGH RISK (difficult to reverse)

Examples of STRATEGIC Decisions? Whether to expand into new markets Whether to install new equipment Whether to take over a rival firm Where to locate or relocate business Whether to introduce new products/services Where to get finance for projects Whether to restructure Whether to move into bigger or smaller premises

TACTICAL DECISIONS (Medium-term decisions) Will affect the organisation over 6 months

to a year Taken by middle levels of management

(Senior Staff, Factory Managers) Putting strategic decisions into action to

achieve the aims and objectives MEDIUM RISK (take some time to change)

Examples of TACTICAL Decisions? Whether to introduce new working arrangements

in the office or factory Whether to increase/decrease overall stock levels Whether to increase/decrease staff levels in a

department Whether to introduce flexitime Whether to have open plan layout Whether to use e-mail for all internal

communications Whether to introduce remote working Whether to install video-conferencing facilities

OPERATIONAL DECISIONS(Short-term Decisions) Will affect the organisation over a few

days/months Taken by lower levels of management

(Supervisors, Managerial Assistants) Dealing with the detail of tactical decisions Day-to-day decisions to meet standards/targets Making adjustments to suit changing

circumstances LOW RISK (can be quickly changed at little cost)

Examples of OPERATIONAL Decisions? Whether to move workers in office/factory from

one job to another to meet a target Organising holiday rotas When to hold staff meetings in department Whether to reorganise filing system within office Whether to up-date advice on use of passwords Whether to introduce a new procedure for

photocopying requests Banning staff from bringing in computer games

from home to load onto network

DECISIONS – Strategic, Tactical and Operational Strategic

I’m going to make long-term decisions about my future.

Tactical I’m going to plan out how I will get there over

the next six months. Operational

I’ll start tomorrow!