In your opinion, what are the pros and cons of managerial decision making based on intuition, as in the current Alfa operation?
Pros
In Alfas’ current operations, several advantages of managerial decision making based on intuition can be identified. First, intuitive managerial decision making is the best in changes that need fast pace. Intensifying growth in market share by quickly selecting new sites and opening new stores in its chain of distribution for example makes the company gain competitive advantage over its competitors. The bigger the market share, the higher the chances of dominating a market. A quick look for new locations and new stores enables Alfa to reduce competitive pressures, and hence maximizes on sales and profits before the other companies realize the opportunity (Surma, Jerzy, Magdalena & Peter 13). This can be achieved through intuitive managerial decision making.
Another advantage of employing managerial decision making based on intuition is that, it ensures customer satisfaction. Alfa offers its customers products that meet their needs after a quick examination of changes in demand for individual goods (Surma, Jerzy, Magdalena & Peter 12). For example, through benchmarking the company compares the products offered by its customers with its products and then quickly selects the most suitable products that meet the customers’ needs.
In reference to Alfa’s current operations, intuitive managerial decision making is quick. It also ensures what the managers of Alfa think is taken into account.
Cons
From the current operation of Alfa, several drawbacks of intuitive managerial decision making can be identified. Considering that many things are done at a fast pace, there is a possibility of missing better solutions because there is no enough time to consider all the alternatives in full.
The fast pace in decision making can also lead to basing solutions on incomplete or inaccurate information. In reference to Alfa’s current operations, the managers chose locations intuitively without considering the know-how of how chain stores are run on similar sites, the target audience, and the environmental data among others. In reference to the case study, for example, the regional managers receive the results of sales on weekly intervals making it challenging to respond effectively to changes in demand compared with the projections (Surma, Jerzy, Magdalena & Peter 12)
Intuitive decision-making might not favor team decision scenarios considering that every manager has his or her intuitive perspectives. The individual store managers in Alfa for example arrange the company’s products in an intuitive and independent manner. In addition, it is realized that some departments in Alfa work intuitively on their own, instead of collaborating with others to make the business a success. This is shown in Alfa’s case study whereby the sales department and the controlling department gave different logistics costs results.
Do you think the consultant’s proposed Business Intelligence solution is well aligned with Alfa’s business strategy? Why or why not?
The consultant’s proposed business intelligence solution is well aligned with Alfas’s business strategy. One thing that all managers or executives should note is that a successful Business Intelligent Solution plays a significant role in providing information necessary for decision making. Through access to information, executives can easily make decisions effectively, and hence improve the performance of their companies. There are several reasons that make the proposed Business Intelligent (BI) Solution be well aligned with Alfa’s business strategy.
First, it is clear that the former intuitive decision making, relies on wrong or incorrect information, and that is why it cannot be relied on improving the performance of the chain store. The chain store’s dependence on intuitive decision making is instrumental to its poor performance. Alfa’s managers, for instance, make many mistakes because of making quick decisions without considering all information necessary for improving the chain store’s performance (Surma, Jerzy, Magdalena & Peter 13).
Choosing locations intuitively without considering the knowledge or information about the target audience, the environment, and how chain stores are run in similar locations is one of the drawbacks that pull Alfa backward (Surma, Jerzy, Magdalena & Peter 13). With the business intelligence solution, this retail chain store will be able to access all the information necessary for effective decision making. Alfa also needs the BI solution in order to enhance collaboration between all departments, power of applications, all resources, and best successful practices. The BI solution will enhance team decision making, whereby several managers or executives will contribute their ideas. The ideas will be assessed and then evaluated to come up with the most relevant decision in the chain store’s operations. Through collaboration, the departments will give tallying results, and not different results that the chain store experiences because of integrating intuitive decision making in its operations. The problems with the chain store are that managers overrule facts, lack collaboration among the chain store’s departments, and relying on incomplete information while making decisions can only be solved by the BI solution (Surma, Jerzy, Magdalena & Peter 13). This is because by having access to an analysis of relevant information for making decisions accurate and effective managerial decisions will be made, and hence Alfa’s performance will improve.
Based on the answers above, make a final recommendation on whether Alfa should adopt the Business Intelligence solution proposed by the consultants. If your recommendation is to adopt it, provide some qualitative expected results, by examining the insights that the solution will provide to managers for decision making. If your recommendation is NOT to adopt it, propose an alternative solution
Based on the above information, Alfa should adopt the Business Intelligence (BI) solution that is proposed by the consultants. Having done that, the chain store’s performance will improve remarkably. As aforementioned, the BI plays a significant role in effective decision making by executives or managers. Most of the challenges the chain store faces can be solved by the Business Intelligent Solution. With the BI solution, new store locations can be selected by considering the knowledge of the functioning of chain stores in similar locations. The BI can also help the managers to access the knowledge or information about its target audience and the environmental data among others. This will ensure customer satisfaction and the maximization of sales and profits. The company will also increase its market share, and hence gain a competitive advantage over its competitors.
The other achievement of relying on the Business Intelligent solution is that Alfa will have its departments working collaboratively to meet the goals of the retail chain store. The traditional independent and intuitive perspective of making decisions by managers will cease to exist. This will help the managers not to be guided by their personal intuition, and concentrate on collaborative decision making that requires a full analysis of relevant information. This will ensure that only the correct, accurate, relevant, and effective information is utilized in decision making. Alfa will remarkably improve its performance and hence gain a competitive advantage over its competitors. These are just, but few of the achievements that Alfa, a retail chain store will gain after integrating Business Intelligent (BI) solutions in its operations.
Works Cited
Surma, Jerzy, Magdalena Górniakowska, and Peter Gee. Business Intelligence: Making Decisions Through Data Analytics. New York, N.Y: Business Expert Press, 2011. Print.