Factors Influencing Decisions

Page 1

Internal Factors

Risk: some decisions can be high risk but bring high rewards, businesses try to reduce risk (scientific decision making helps here)

Reward: Decisions bring rewards either financial or beneficial

Uncertainty: No-one knows the outcome of any decision scientific decision making can reduce uncertainty

Opportunity Cost

External Factors

Mission: all decisions will take the mission into account

Objectives: Decisions made with the aim of achieving the objectives

Ethics: Decisions will have to align with the business ethics

External Environment: Competition, trends and the economy of the area

Resource Constraints: the availability of resources