Table of Contents
2.0 Literature review and the importance of decision making and the application of decision analysis.
3.0 Identify and outline a decision problem relating to an external organization.
4.0 Apply the simple multi-attribute rating technique (SMART) to the identified decision problem.
5.0 Strengths and limitations of analysis in the context of the decision problems.
Effective decision making is considered as vital activities for business organizations. This report, first, gives an overall discussion on the decision making (including the concept, problems and the importance of decision making) and its impact on the business performance. In the next section; this paper discusses and mentions a decision-making problem relating to a particular organization.
This report performs based on a case study called DG Study World to evaluate and analyze decision making for its business. In this case, the simple multi-attribute rating technique (SMART) is applied to define decision-making problems relating to an organization. In the final part; this report identifies the efficiency of this analysis and the SMART method on the selected firm.
2.0 Literature review and importance of decision making and the application of decision analysis
What is decision making?
It is very important for a business to make effective decisions to gain sustainable competitive advantages and to deal with huge competition and the challenges in the market. The success and failure of a firm surely depend on the decision making capability. Without an effective decision, it is difficult for a business to hold a strong position in the market and overtake the barriers and challenges of the firm (Sparough et al., 2014). On the other hand; due to a lack of right and effective decisions; the firm can’t achieve the targeted goals and objectives.
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Ariely (2013) suggested that each and every organization has decision making experts for taking right and effective decisions and removing the problems, barriers, and challenges of the firm. Hammond et al. (2014) defined decision making as a technique of selecting the best alternative for the business firm from the multiple alternatives by which the business firm can remove the problems, barriers, and challenges in the market. According to Kallet (2015), decision making is an activity of selecting one item from more than two items. Howard and Abbas (2014) stated that decision making is defined as the process of taking initiatives for the business to organize the several necessary activities at the right times.
Another definition is provided by Duke (2015) and said that decision making refers to a set of business activities that support the business to develop an accurate direction for its future success. However, Tschappeler et al. (2013) argued that the success of a decision making depends on the identification of the problems, collection of data, identification of alternatives, and selection of best one and implementation of the decision.
Different types of decision making in businesses
Jones (2016) stated that there are three ways by which business decisions can be classified. These are strategic, tactical and routine or operational business decisions. Some of the examples of strategic decision making is selecting and hiring the right staff, acquiring and merging a business. On the other hand, change product pricing; recognize a department is the examples of a tactical business decision. Then, some examples of operational decision making are the approval of an invoice, the answer to customer queries, and ensuring a business quotation.
According to Zane (2015), decision making in business is mainly classified as business decision making, personal decision making, and consumer decision making. Business decision making focuses on the identification of organizational goals and objectives. Personal decision making focuses on the employment outcome in the workplace. Consumer decision making determines the effectiveness of buying decisions………….