Week 2 Discussion
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Nancy Ellis posted Jun 6, 2023 9:51 AM
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Nancy Ellis
South University
MBA 5004
Instructor: Dr. Jin
Week 2 Discussion
June 8, 2023
When making decisions for a company, managers should determine if a cost is avoidable or unavoidable because, in the short run, only avoidable costs are pertinent for decision-making. An avoidable cost is one that may be eliminated by selecting one alternative over another. Long-term decisions happen when contemplating events 10 years or more in the future causing decision-makers to consider or choose approaching actions different from those they would otherwise go after (Rand). Short-term decisions usually address temporary events or a quick need, while long-term decisions line up with more permanent problem-solving and meeting strategic goals.
Decision-making from various sources. requires a substantial amount of deliberation and input from various sources. The head decision-makers in the business usually make the decisions and know how and when to act or move forward with the right information. The decision-maker must be able to determine the objective. The decision-maker should have a thorough knowledge of the details of the objective and be able to analyze the information and factor it into the process when deciding how to act. The decision-maker should have a firm grasp of the resources, alternatives, and consequences at his disposal before making a final decision. The manager must be confident that the company can achieve its mission once established. Knowing the leadership qualities of others in the company can give the manager confidence in his decisions (Lewis).
Tests that are used to help a manager in deciding may include,
· The familiarity test is performed by examining the main uncertainties in a situation.
· The feedback test, was the feedback from the last decision dependable?
· The measured-emotions test: Are the emotions we have experienced in similar or related situations measured?
· The independence test: Are we likely to buy any inappropriate personal interests or attachments?
If a situation fails even one of these four tests, we need to strengthen the decision process to reduce the risk of a bad outcome. There are usually three ways of doing this—stronger governance, additional experience, and data, or more dialogue and challenge (Campbell & Whitehead, 2020).
Campbell, A.& Whitehead, J. (2020) How to Test Your Decision-Making Instincts
Lewis, J. (n.d.) What Kind of Information is Important to Business Decision-Making
Rand (n.d.) Seeking Examples of Long-Term Decisions
