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Decision-Making Process: Stages and Basic Principles

Introduction

Personal or professional, decision-making is always tough and requires step by step approach. Before making a decision, different alternatives are considered and they depend on the importance of the decision to take. After finding different alternative solutions, they are analyzed to choose the best alternative (Mellers, Schwartz, & Cooke, 1998, p. 448).

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I should begin by stating that planning without problem-solving or decision-making criteria will hardly make a dent in goal achievement. Managers must make a series of decisions about how to solve various problems of how to control the resources of the organization. The decisions that are made can be programmed or non-programmed. Non-programmed decisions are those that are not routine and complex in nature because the problem may be new. For instance, virtually all strategic decisions are no-programmed. Programmed decisions, on the other hand, are routine in nature and are made by lower managerial levels. While strategic decisions of a non-routine nature are dealt with by the top managers (Lawler and Galbraith 1994 p.6-17).

The steps to decision-making begin with identifying and diagnosing a problem as for instance, why former customers stopped buying from the company. It is essential that the management identifies the exact nature of the problem, so as to address the same. For instance, employee turnover in a company may not be necessarily due to lower remuneration of the workers but due to inflexible working hours and increasing their wages hardly solves the problem. A good decision-maker looks for alternative solutions before making the decision; if the decision-maker does not look for an alternative then he is a poor decision-maker. This requires digging down the problem to its genesis. The alternative solutions for the problem of raising money for a company, for instance, could be borrowing money from the bank or raising money from friends and family members. The managers should get over the tendency of saying yes to most of the alternatives as this strategy results in ambiguous outcomes. Converting the decision into action is the next major step, for a decision is not really a decision until it is implemented (Mellers et al, 1998, p. 447-462).

It must be understood that decision-making is not always rational. This is due to the fact of bounded rationality. Partly because of bounded rationality decision-makers use a simplified strategy known as heuristics that is akin to the rule of thumb in decision making.

Decision made by an organization

Marketing decision making

Sales were decreasing at a faster rate in my company. A good marketing decision was required to be made. I had to consider a number of options available to restore the company’s market share. Various buyers were contacted so that they can give their views on the products. This gave the buyers a chance to create the products that they really desired to have. This was to help find a workable plan to be introduced or not. Before changing the marketing plan or introducing the market plan, there was a need for a marketing strategy. There was a successful marketing strategy for our product. The approach employed to market was based on the four Product mixes and the target market:

The product:- our product was one of the unique brands in that it contained a diversity of goods. It contains and an assortment of ground coffee, filter paper and beans. Product diversification has been enhanced, and thus the plan of changing the marketing plan was a necessity. There was a concern that complications of the production of portion packs with the two-cup approach would affect inventory levels and warehousing as well as customer dissatisfaction. It was considered that color distinction was necessary if the two-cup approach was chosen, though the two colors chosen would be easily confused by the buyer.

The Place:- We had a very vigorous marketing team such that they had so much penetrated into the market. The good services that we offered had also given us a good reputation in the industry. Our distribution team was doing so well and has also contributed to their success in the at-home market.

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Later we started facing major problems in the market. Apart from competition that was very stiff, the company also lacks efficient ways of distribution. This is because its distribution channel is very poor. The management has with time employed other means of performing sales and one major way that is used is called e-commerce.

Promotion:- Various ways of succeeding in sales have been employed by these companies. One major style that does really well is the use of discounts. Other means exist some of which entail giving free gifts like sweets or other related groceries. Another related package that works to benefit both the client and the business is the free delivery of goods whenever a client buys goods above some value. This works to bring more sales to the company and also to reduce the cost on the side of the client.

There are also two promotional activities that our company offered to their buyers in order to increase their customer-base that is: a promotional offer as a referral program- were a first-time buyer who purchases the product or a brewer online, types in the name of the person who referred them. Another discount mechanism used is the utilization of the point of purchase site.

Pricing:- The company has control over the products because it can adjust its discounts and pricing policies. Pricing based on the consumption survey seemed to be like the ideal price to be $0.55 per cup. The home portion pack has a constant price setting. This constant is fixed irrespective of whether there is a two or one-cup strategy in use. This price setting is at $ 0.55.

I carried SWOT analysis for the company product to help come up with a new marketing plan.

The new marketing plan

In making a decision I found out to be prudent to maintain both direct and indirect channels in the at-home market. One brand had also created various strategies to keep close relationships that will be a good bedrock towards success. Such relationships also overlap with the employment relationship within the firm such that everyone is counted equal.

The price: Pricing the brewer is a main concern of the company. Based on the sales projections, breakeven point and cost-benefit analysis are changed to price high and lower later. One of the company’s main objectives in the future should be to not only lower brewer costs but to also create partnerships with high-end retailers to sell the product. It was first sold in the market at $ 0.55 and this was subject to changes as one purchased more products.

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This pricing was determined by adding the cost of producing one unit of an item plus what the company desires to get as a contribution margin. A brand refers to the name, design or symbol that is intended to identify and differentiate the product of a company from that of competitors. This increased sales after 4 months of its introduction. This was one of the best decisions I made while I was the marketing manager in my company.

Personal decision

The boy next door was so good to me; every time I had a problem he was there to assist me. One day we went out to play together, little did I know the boy had other plans for me. While playing in the fields the boy teased and told me how beautiful I was.

He requested me to be his intimate friend. Without thinking of many options available thank the boy for his kindness I agreed to have sex with him the following day. At 4 p.m. the following day I went to his home and we locked ourselves in his bedroom.

This premarital sex has remained an issue in my life until today. Due to the fact that this society deals with different forms of liberated actions, even young adults are capable of doing such acts that are ‘prohibited’ at an early age. This is because I become pregnant and eventually a teenage single mother.

Conclusion

A problem is an issue, a concern, or an obstacle that makes it difficult for someone to achieve an objective or something that he or she desires needs to be handled with care. Decision-making is therefore the process by which someone will attempt to work out through an obstacle that is standing in between him or her and the desired goal. It will thus involve mental processes that occur when one wants to move from the particular condition or circumstance to the desired state. A solution will help one move from the initial state through intermediate states to the desired goal that one strives to attain. One needs to examine the problem so as to come up with solutions that could be used in solving the problem. Ways that one could use so as to come up with solutions include using the means-end analysis, working backward, and difference reduction methods. These methods will enable one to develop solutions that are suitable for the problem at hand as they will draw from the problem representations that were developed (Mellers et al, 1998, p. 447-472).

Using a means-end analysis involves coming up with sub-goals that will bridge up the big difference between the state that one is at and the final destination that one wants to be at; working backward where one will look at the final state or goal that he or she wants to achieve and then work backward from that point; and difference reduction where one finds an appropriate operator that will enable him or her to move closer to the desired goal as ones evaluate the progress made so far along the way (Christensen-Szalanski, 1978, p. 309-312).

Organization Decision Table

CONSEQUENCES
Profits Reduction of marketing expenses Reduction of compensation Cost
Alternatives Profits improved Step1: Desire Score Step 2: Contribution Reduced cost Step1: Desire Score Step 2: Contribution Compensation cost Step1: Desire Score Step 2: Contribution Production Cost Step1: Desire Score Step 2: Contribution Step 3: Overall Desirability
differentiate Good 20 20 Same 15 20 low 20 20 Less 22 20 77
Increase marketing Bad 5 0 High 7 5 High 17 20 High 10 10 39
New product Good 25 20 low 28 40 low 20 70 Less 29 80 102
Change manager Same 10 20 same 15 20 Low 17 10 High 10 10 55
Increase technology Good 40 40 low 35 40 low 26 50 less 29 25 130

Personal Decision Table

Pregnancy HIV Contribution
Descriptor Desirability Descriptor Desirability
Say no to sex NO 50 Impossible 50 100
Agree YES 10 Possible 10 20
Avoid him NO 15 Impossible 15 30
Use of condom NO 25 Possible 25 50

References

“Avoiding Decision Making Traps” (n.d.), Section 2: Faulty Decision Making, 2009. Web.

Barham J, (2007), “The Road to Rational Decision-Making”, Web.

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Beer, M., Russell A. E. & Bert S. (1990). Why Change Programs Don’t Produce Change. Harvard Business Review.

Christensen-Szalanski, J. (1978). Problem Solving Strategies: A Selection Mechanism, Some Implications and some data. Organizational Behavior and Human Performance, 22, 307–323.

Coates, Joseph. The Radical Solution to Rising Healthcare Costs. 2009. Web.

DuBrin, A. J.(1996). Essentials of management. South-Western College Pub.

Lawler, Edward E. & Jay R. Galbraith (1994).Avoiding the Corporate Dinosaur yndrome, Organizational Dynamics, Vol. 23 pp.5–17.

Mellers, B.A., Schwartz, A., & Cooke, A.D. (1998). Judgment and decision making. Ann Rev Psychol, 49: 447-477.

Naqvi N, Shiv B & Bechara A, (2006), “The Role of Emotion in Decision Making”, Association for Psychological Science, 2009. Web.

Sharp M.J.& Martin SS, (2002), “”Mindless” decision making as a failure of contextual reasoning”, Department of Psychology, California State University, 2009. Web.

Williams, S. W. (2002). Making Better Business Decisions. Thousand Oaks, CA, Sage Publications ISBN: 0761924221

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