Scientific or intuition?

Scientific decision making

• reduces risk
• reduces bias, involves more than one person
• people in decision making aim for same objectives
• clear sense of direction
• slow process, lacks creativity
• fail to innovate
• unsuitable for big firms
• pressure for workers, demotivate staff

Intuition- similar to hunch

• Advantages
• better for small businesses
• decisions aline with core values
• no need for constant monitoring like scientific
• individual is experienced, more creative in solutions
• Disadvantages
• overuled by facts
• buying habits may have altered
• not considered all alternatives, missed better solution
• based on inaccurate, incomplete data

Influences

• Speed of decision
• size of business
• information available
• character of decision maker

Good decision is based on

• Risk involved
• Reward/benifit
• Uncertainty
• Opportunity cost - real cost of taking action, next best alternative
• e.g. Scientific decision is better option, formally takes account of risks etc

Influences

• Misson
• Ethics - may reject most profitable option
• External environment - trends, environment
• Resource constraints - lack of finance, staff quality
• Power of stakeholders - e.g. business in competitive market = customers will be influence
• Culture of business- based on values of founder