Unit 3.2 Understanding Management, Leadership and Decision Making

Making Decisions

Decision making in a business is very important, it takes place at all levels, it's short, medium or long term, tactical or strategic or corporate, involves risk and uncertainty, contrained by a number of variables and there is an oppourtunity cost when a decision is made

some decision making is considered to be programmed whilst other decisions are non-programmed and require unique solutions.

Oppourtunity Cost- A benefit, profit, or value of something that must be given up to acquire or achieve something else. Since every resource (land, money, time, etc.) can be put to alternative uses, every action, choice, or decision has an associated opportunity cost.

Scientific Decision Making

Uses systematic processes to make decisions in an objective way:

• Set objectives
• Gather data
• Analyse Data
• Select a strategy
• Implement and review

Benefits of Scientific Decision Making

• Clear sense of direction
• Based on comparisons with other methods
• Decisions are monitered continually and reviewed
• Flexible
• Based on rational thinking so likely to be successful
• Dependent on data

Intuitive Decision Making

Based on hunches or…