DECISION MAKING

DECISION MAKING

1. SCIENTIFIC DECISION MAKING

   • Uses data to predict the best route.
   • Benefits
     • Clear sense of direction
     • Based on business logic
     • Reduces bias
     • Constant review
     • Flexible- process can change at any stage

2. INTUITION

   • often used in small businesses.
   • Benefits
     • Less expensive than gathering data
     • Less time-consuming
     • data may be bias, and someone with good acumen may be better suited to make the decision.
     • Data may be dated, and not relevant in the current situation

3. SCIENTIFIC OR INTUITION?

   • Speed
   • Information available
   • Size of business
     • Small business- hunch is more likely.
   • Predictability of the situation
   • Character/culture
     • Risk takers?

4. RRU

   • Rewards
     • The result of a decision.
   • Risks
     • How likely is success, and is the risk worth it?
   • Uncertainty
     • Areas of uncertainty should be explored, to reduce the risk as far as possible

5. OPPORTUNITY COST

   • The next best thing you could have chosen, but did not.

6. MARKETING MODEL

7. DECISION TREES

   • A tree-like model showing the different options and probabilities of success and failure.
   • Benefits
     • Quantifies estimates, and considers uncertainty
     • Highlight that every decision has uncertainty.
     • Tactical, routine decisions
   • Limitations
     • Ignores changing business environment.
     • Difficult to get accurate.
     • Management bias
     • no qualitative

8. INFLUENCES

   • Mission
   • Objectives
   • Ethics
   • External Environment
   • Resources
   • Stakeholders
   • Culture

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