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Reviewer 4

Decision-making in business involves selecting the best course of action from various alternatives to achieve goals, and is essential for effective problem-solving and strategic planning. There are different types of decisions, including strategic, tactical, operational, and financial, each with specific examples and processes. Factors influencing decisions include data accuracy, financial resources, stakeholder interests, market conditions, and legal considerations, with techniques like SWOT analysis and cost-benefit analysis aiding the process.

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Nihad Rusdemli
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8 views3 pages

Reviewer 4

Decision-making in business involves selecting the best course of action from various alternatives to achieve goals, and is essential for effective problem-solving and strategic planning. There are different types of decisions, including strategic, tactical, operational, and financial, each with specific examples and processes. Factors influencing decisions include data accuracy, financial resources, stakeholder interests, market conditions, and legal considerations, with techniques like SWOT analysis and cost-benefit analysis aiding the process.

Uploaded by

Nihad Rusdemli
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Decision-Making in Business – Reviewer

1. What is Decision-Making?
Decision-making is the process of choosing the best course of action from multiple
alternatives to achieve business goals. It is a critical skill for managers, entrepreneurs, and
employees at all levels.

2. Importance of Decision-Making in Business


✅ Helps businesses solve problems effectively.
✅ Guides strategic planning and goal setting.
✅ Improves resource allocation and efficiency.
✅ Reduces risks by evaluating possible outcomes.
✅ Enhances leadership and management effectiveness.

3. Types of Business Decisions


A. Strategic Decisions
● Long-term decisions that affect the overall direction of a company.
● Examples: Expanding to a new market, launching a new product, or acquiring
another company.

B. Tactical Decisions
● Medium-term decisions that support strategic goals.
● Examples: Hiring new employees, adjusting marketing campaigns, or negotiating
supplier contracts.

C. Operational Decisions
● Short-term and routine decisions that impact daily business functions.
● Examples: Managing inventory, scheduling employees, or handling customer
complaints.

D. Financial Decisions
● Focuses on financial planning, budgeting, and investment choices.
● Examples: Securing a loan, increasing product prices, or investing in new
technology.
4. Steps in the Decision-Making Process
1 Identify the Problem – Define the issue that needs to be addressed.
1️⃣
2️⃣Gather Information – Collect relevant data and analyze the situation.
3️⃣Identify Alternatives – List possible solutions or courses of action.
4️⃣Evaluate Alternatives – Assess the pros and cons of each option.
5️⃣Choose the Best Alternative – Select the most effective solution.
6️⃣Implement the Decision – Put the decision into action.
7️⃣Review and Adjust – Monitor the results and make necessary changes.

5. Factors Affecting Business Decisions


📊 Data & Information – Accurate and reliable data lead to better decisions.
💰 Financial Resources – Budget limitations impact the feasibility of choices.
👥 Stakeholders' Interests – Decisions should consider employees, customers, and
investors.
🌍 Market Conditions – Economic trends, competition, and customer demand influence
choices.
⚖️Legal & Ethical Considerations – Businesses must follow laws and ethical guidelines.

6. Decision-Making Techniques
A. SWOT Analysis
● Evaluates Strengths, Weaknesses, Opportunities, and Threats to make informed
choices.

B. Cost-Benefit Analysis
● Compares the costs and benefits of different options to determine the best decision.

C. Decision Matrix
● Ranks alternatives based on key criteria such as cost, risk, and effectiveness.

D. Intuitive Decision-Making
● Based on experience, instincts, and personal judgment.

E. Group Decision-Making
● Involves multiple people for collaborative and diverse input.
7. Common Decision-Making Challenges
⚠️Lack of Information – Leads to uncertainty and risk.
⚠️Overconfidence – Assuming a decision is correct without analysis.
⚠️Groupthink – When teams agree too quickly without critical thinking.
⚠️Emotional Influence – Making choices based on feelings instead of facts.

8. Real-World Business Decision Examples


📌 Apple deciding to remove the headphone jack to push wireless technology.
📌 Netflix shifting from DVD rentals to streaming services.
📌 Tesla investing in electric vehicle production despite market uncertainty.

Would you like more examples or explanations? 😊

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