...will describe the concept of managerial decision-making. It will look specifically at the ‘Rational Decision-Making Model’, exploring the shortcomings of this approach, and will suggest possible ways a manager could overcome these issues when striving to make a rational decision that will bring benefit to an organisation. Throughout this essay, empirical research and examples from academic literature will be presented to illustrate the discussion. Decision-making is arguably the single most important process in an organisation, being a basic task at all managerial levels. (Heraclious 1994) Rational Decision Making can be defined as choices that are consistent and value maximising within specified constraints. (Bergman, Coulter, Robbins & Stagg 2008) The ‘Rational Decision-Making Model’ is a structured process for essentially making a logically sound decision. The model is made up of a series of steps, with the details often varying, but generally including; recognition of the decision requirement, diagnosis and analysis of causes, development of alternatives, selection of alternative, implementation, evaluation and feedback. (Heraclious 1994) A person making a rational decision would be logical, fully objective, and would strive to select an alternative that maximises the likelihood of achieving their goal. (Bergman, Coulter, Robbins & Stagg 2008) There are a number of issues surrounding the effectiveness of the model for rational decision-making, and there has been...
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...Analyzing Managerial Decision in an Organization In every organization, the aim and objectives of organizational manager is to be able to make effective and efficient decisions that aid in turning the organization around. They tend to develop a strategy that promotes economic growth and discourages competition. Organizational shareholders need to understand how a shift in demand and supply can affect organizational productivity and price stability. They need to examine their decisions in such a way that will not affect the pillar and foundation of the firm. They need to avoid all the roadblocks that hinder growth. Managers do make decisions that have significant effect on economic output, input, pricing capital expenditures and other strategic decisions. If decisions are not examined effectively, it will leads to organizational failure and collapse. Poor decision on pricing and productivity can drive down economic value for the firm. Bad economic decisions and policies within the firm can result to loss of profit and sustainability in the organization. According to (Brickley, Smith & Zimmerman, 2009) successful firms make decisions that effectively link decision making authority with good decisions right (p. 5). They introduced the organizational reward and performance system. The reward system motivates organizational stakeholders to be able to contribute tremendously to the development of the organization by increasing the market value. Strategies are developed by organizational...
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...Mitya, 09/14/2015 Managerial decision-making process. Bias. I was a product manager in my German-Polish company in 2009. The company was supplying building materials to the Polish market. Due to non-satisfactory financial results caused by the financial crisis in 2008 I was instructed by my General Director to increase the sales volume of my product portfolio up to 50% by the end of 2010. The product set consisted of aluminum composite panels, building aluminum profiles, and polycarbonate panels. I made a decision to relocate production lines of aluminum profiles from Germany to Poland by using one of our partners’ plants. My decision was based on the largest aluminum trade margin that allowed me to pursue a more flexible pricing policy. As a consequence, it could lead to increased levels of demand at the local market. At the same time simplicity and low cost of tech manufacturing process made this solution less financially risky in case of my managerial decision failure. My product portfolio did not have another alternative that would help me to increase my turnover index up 50% within 1 year. Therefore, I had no other alternatives except for moving the production line to the local Polish market. Plus, it could provide me with factually reduced cost per unit, cost of logistics and, as a consequence, an increase in sales. Back then I followed the exact rational model of decision making process. I conducted a thorough marketing research project. In 2009, I visited all our 20 branches...
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...UNIT IV Managerial Decision Making Click Link Below To Buy: http://hwcampus.com/shop/unit-iv-managerial-decision-making/ 1. Recently, a number of major banks have rejected federal bailout money citing that they did not like the rules that the government placed on them if they took the cash infusion. Research these decisions and report your findings. Discuss how self-serving reasoning could play a part in these decisions? Your answer must be a min. 200 words, try to keep it under 300 words when possible. Must use course textbook as a reference. You can use additional creditable references as needed to answer the question but it is not required. 2. Lately, the stock market has experienced unprecedented volatility – wild ups and downs. Discuss how stock trading has created a lot of this volatility and the decisions for stock traders to buy and sell wildly in terms of hyperbolic discounting. Your answer must be a min. 200 words, try to keep it under 300 words when possible. Must use course textbook as a reference. You can use additional creditable references as needed to answer the question but it is not required. 3. Discuss a recent decision that you made (purchase an automobile or home, change jobs, etc.). How did motivation and emotions influence your decision? Did you experience any internal conflict (a battle between what you wanted versus what you should do)? How did you resolve this conflict? Your answer must be a min...
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...1980’s, other competitors obtained the ability bring new products to market in a much shorter timeframe (Brickley, 2009, p. 358). Film and related products became more readily available, resulting in a more competitive film production industry. With this changing market environment and technological advancement, Kodak lost its monopoly in the film production market and was forced to make a change. 2) What mistakes did Kodak make in changing its architecture? In order to regain some of its lost market share, the company made some rapid and unbalanced changes to its architecture. However when making changes to one area of the company, it failed to coordinate the changes to other areas. In 1984, the company restructured and changed its decision making process to become more decentralized. As a result, 17 new departments were created. These new business units had profit-and-loss responsibilities, and their corresponding managers were given the responsibility to decide on new products, pricing, and other important policies (Brickley, 2009, p. 359). The result of this major restructuring had very little impact of the company’s plan to regain market share and profits. In reaction to...
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...UNIT IV Managerial Decision Making Click Link Below To Buy: http://hwcampus.com/shop/unit-iv-managerial-decision-making/ 1. Recently, a number of major banks have rejected federal bailout money citing that they did not like the rules that the government placed on them if they took the cash infusion. Research these decisions and report your findings. Discuss how self-serving reasoning could play a part in these decisions? Your answer must be a min. 200 words, try to keep it under 300 words when possible. Must use course textbook as a reference. You can use additional creditable references as needed to answer the question but it is not required. 2. Lately, the stock market has experienced unprecedented volatility – wild ups and downs. Discuss how stock trading has created a lot of this volatility and the decisions for stock traders to buy and sell wildly in terms of hyperbolic discounting. Your answer must be a min. 200 words, try to keep it under 300 words when possible. Must use course textbook as a reference. You can use additional creditable references as needed to answer the question but it is not required. 3. Discuss a recent decision that you made (purchase an automobile or home, change jobs, etc.). How did motivation and emotions influence your decision? Did you experience any internal conflict (a battle between what you wanted versus what you should do)? How did you resolve this conflict? Your answer must be a min...
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...Analyzing Managerial Decisions: Eastman Kodak by HCM-540, MBOL5, Health Care Organization Instructor: Saint Leo University Distance Learning November 24, 2013 1) What factors motivated Kodak to change its organizational architecture? There were several factors that persuaded Kodak to make changes to its organizational architecture in 1984. Kodak had come to the conclusion that its present organizational architecture did not fit the current business environment for the industry. The biggest factor that persuaded Kodak to make a change was the growing competition in the industry and losing the dominance it once had in the film market. The emergence of new product being made by Fuji Corporation dwindled away their market share. In the early 1980’s, Kodak saw their share price drop from a high of $85 to a low of $71 in 1984. This was cause for change to its organizational architecture. In order to stop the bleeding, Kodak realized it had to restructure and react quickly. With developing technology, Kodak was losing ground fast and was no longer the conglomerate it once was. 2) What mistakes did Kodak make in changing its architecture? Kodak was faced with trying to regain market share. It needed to quickly make changes to respond to shareholders concerns. There were obvious advances in technology that concerned Kodak. Kodak restructured creating 17 new business units with profit-loss responsibilities. Unit leaders were given increase decision-making power...
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...: Assessment Activity What assumptions are necessary when using customer driven analytics to make managerial decisions? Some assumptions that are necessary for making managerial decisions, would involve capturing customer feedback such as customer contact notes or email, customer insight for refining products and service delivery programs. Management can also simulate better business decisions for each action before its put into production. Obtaining a portfolio of risks by proactively identifying changing patterns in consumer behaviors would also be ideal. How does the IT strategy of 7/11 influence other aspects of the business (such as inventory, human resources, or vendor relationships management)? Company stores have been able to responded more effectively to demand fluctuations from variations in weather to local events, and longer-term changes brought on by shifts in tastes and demographics. IT strategy has increased sales revenue and reduced inventory costs. Avoiding t no availability was one of the most important strategies that IT used to retail profitability and success. Also the point of sale (POS) information helped avoid stocking shelves with unpopular goods and identify customers demand for the most wanted goods. Good IT systems can help achieve the best balance among low inventory, high turnover, and few lost sales (low opportunity losses). This information also can be used to identify the best time to order from producers or wholesalers. Just as manufacturing...
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...Managers Decision to Hire Temporary or a New a Worker xxxxxxxxxxxxxx BUS 640 xxxxxxxxxxxxxxxxx June 6, 2011 Managers Decision to Hire Temporary or a New Worker The decision to hire temporary workers or a new worker to handle the increased demands for the company’s product can be a very hard decision for companies to make. In this paper I will discuss what takes place when making such an important decision to increase production and save the company money. This paper will include an executive summary, definition, factors or cost, measurement, analysis and summary. Executive Summary Should a company hire temporary workers or hire full-time workers to handle increase demand for the company’s product? Companies are constantly facing some of the most demanding situations due to challenging times of our economic society. No decision is an easy one to make however; these choices have to be made in order to maintain a steady flow of resources and incomes. The law of demand mentions the concepts which clearly clarify that quantity demanded increases when prices fall and quantity demanded decreases when prices rise to a degree. At some point in time, management has a desire of knowing what the maximum price should be to render a product or service. Qualitative forecast serves to make some of the viable predictions as to whether certain circumstances are economic suitable, such as price, quantity whether they will change. Quantitative forecasts serves as a predictor...
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...Should we buy a new machine or upgrade the old one? One of the managerial decisions that our local hospital had to make was whether to transition into a digital format with our portable x-ray machines by performing transformation upgrades to both existing analog units or to trade them in and use their value to offset the total price incurred by the purchase of new units. This paper will discuss several factors that may affect the decision making process, along with a preliminary analysis of the problem through the use of marginal analysis. Executive Summary The decision to purchase a new system or to upgrade the existing x-ray machine, the hospital administration must consider the lowest cost for the hospital. By minimizing the cost for the x-ray machine the hospital will lower cost for the patients and the community that it serves. Current system The current x-ray machine flat value would be $12,000 each. Each day the hospital uses the current machines to make 8.5 x-rays per day. The average revenue for each x-ray is $65.00. The hospital calculates the revenue of the machines by multiplying the number of x-rays by the revenue ($65.00 x 8.5 = $553 per day). Looking at the total revenue for the year, $553 per day x 365, the hospital sees revenue of $201845 per year. Cost consideration #1 The administration first looked at the cost of upgrading the existing x-ray machines. The cost to upgrade (2) GE AMX 4 Plus Portable X-ray Units is...
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...ANALYZING MANAGERIAL DECISIONS: Structuring Compensation Plans Parkleigh Pharmacy is a small department store in Rochester, NY, specializing in upscale, expensive personal accessories (e.g., sunglasses, beauty aids, leather goods) and home decorations (e.g., crystal, china, table lamps). Kaufmann's is a large department store chain, based in Pennsylvania, with several stores in the Rochester area. Kaufmann's carries a broader range of products and caters more to middle-income consumers. Salespeople at Parkleigh are paid a straight hourly wage (i.e., no sales commissions). In addition, they are entitled to a 30 percent discount on anything they buy at the store. By contrast, salespeople at Kaufmann's are paid an hourly wage (lower than the hourly wage paid at Parkleigh) plus a commission of 5 percent on sales they make. They receive no discount on products they buy at Kaufmann's. Why do you think the compensation plans differ at the two firms? In particular, why do you think Kaufmann's pays commissions to salespeople, while Parkleigh does not? Why does Parkleigh offer employees discounts on purchases, while Kaufmann's does not? One of the reasons for having different compensation plans could be that Parkleigh does not operate under the philosophy that sales incentives drive sales but instead high customer service and friendly staff drives sales especially when selling to higher end customers. Parkleigh may offer the employee discount because they may have the philosophy that...
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...Analyzing Managerial Decisions: Interwest Health Corp by Ronald J. Sanders HCM-540, MBOL5, Health Care Organization Instructor: Wenyuan Teng Saint Leo University Distance Learning October 24, 2013 Abstract In order for manager to properly manage a company, there needs to be a constant analysis of the decisions that arise daily. Not only do manager’s make personnel decision, they often times are confronted with the decisions of resources and data entry. Because managers must answer to the shareholders, they must be the bearer of the good and the bad news. When making and analysis, managers should, 1) identify the source of the problem, 2) information analyzed, 3) recommended courses of action, and 4) review the analysis conducted. This paper takes a look at a case study on how Interwest Health Corp analyzes managerial decisions. At the conclusion, readers will form a different perspective on how to analyze managerial decisions. Introduction Managers are devoted to the task of making decisions that will affect the worth and synergies of their firm they manage. Consequently, they bear the chore of maximizing their profits by the decision they make. In the past, many formal theories have been formulated as models for making rational choices. These theories have been accepted as practice when faced with a dilemma. As with any decision, there must be an analysis when making a decision. When making a decision, managers should consider the source of...
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...Analyzing Managerial Decisions: Leaving New York City for the Farmlands of Illinois by HCM-540, MBOL5, Health Care Organization Instructor: Saint Leo University Distance Learning November 17, 2013 Abstract An investment banker has a steady job in the city of New York and is pondering making a move to the farmlands of Illinois to begin producing ethanol. The Wall Street Journal has publish a recent article about the federal government’s plan to increase the use of corn-based ethanol as a resource to fuel more plants. It is believed that new laws and regulations will be in favor of producing ethanol. Land can be bought at a fixed price with savings of $800,000. The voices of colleagues are making positive suggestions to follow the promise of fortune but without any foundational data. When considering making a entry into the market of ethanol, the banker should consider several things such as market structure and creating value. This paper examines the proposed decision of the banker to pursue entry into the ethanol industry. After reading this paper, readers will have a better understanding of what to consider when entering a new market. Introduction Before making a business, careful thought should be given so that risks and reward decisions can be made to minimize cost. Startup cost, opportunity, and value are some things that need to be considered. The advice of the co-workers is friendly advice but not good business advice to make a decision. It is easy...
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...Chapter 03 Managerial Decision Making True / False Questions 1. (p. 88) Managers often ignore problems. TRUE AACSB: Other management-specific knowledge/abilities Blooms taxonomy: Comprehension Difficulty: Easy Learning Objective: 1 2. (p. 89) Managers typically face ill-structured problems, leaving the decision maker uncertain about how to proceed. TRUE AACSB: Other management-specific knowledge/abilities Blooms taxonomy: Comprehension Difficulty: Easy Learning Objective: 1 3. (p. 89) Bill Simmons is the manager of a small restaurant and must decide how much money he owes his suppliers. This is an example of a non-programmed decision. FALSE AACSB: Other management-specific knowledge/abilities Blooms taxonomy: Application Difficulty: Easy Learning Objective: 1 4. (p. 89, Table 3.1) Programmed decisions are useful when there is no predetermined structure on which to rely. FALSE AACSB: Other management-specific knowledge/abilities Blooms taxonomy: Comprehension Difficulty: Medium Learning Objective: 1 5. (p. 90) Risk is not a fact of life in management decisions. FALSE AACSB: Other management-specific knowledge/abilities Blooms taxonomy: Comprehension Difficulty: Easy Learning Objective: 1 6. (p. 90) According to research, managers prefer uncertainty to certainty because it makes the job more challenging and interesting. FALSE AACSB: Group/individual dynamics Blooms taxonomy:...
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...This assignment has 4 questions for a total of 50 marks. Both parts should include YOUR GROUP NUMBER AND YOUR GROUP MEMBERS’ NAMES AND STUDENT NUMBERS clearly indicated on the cover page. As well, for full marks, each member of each group should submit by email to me a confidential evaluation out of 10 for each of the other members of their group, indicating your assessment of their contribution to the group project: 1 = weak (little contribution or negative/unhelpful contribution to the group, 10 = strong (significant contribution and positive/helpful contribution to the group. These will only be viewed by the instructor and/or TA and will not be shared with the class. QUESTION 1 (10 Marks) This question should be solved mathematically, without Excel. Submit this assignment in long-hand through the drop-box. The Widget Manufacturing Company must replace a widget machine, and is evaluating the capabilities of two systems. A requirement of management is that the machine chosen must be paid for during the first year of operation. The first machine under consideration, Machine A, would cost $65 000, and has the capacity to make up to 10 000 widgets per year, with a variable cost of $22 per widget. The second machine, Machine B, can produce widgets in almost half the time, would cost $72 000, but the variable cost is only $17 per widget. Widgets sell for $32. 1) a. Find the break-even point in terms of Widgets for each machine. b. Find the...
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