Question

Use an example form the text or one from the real world that illustrates the effective, or ineffective, use of decision making using the steps listed. Discuss why they were successful or not successful. Be specific about which steps were missed, not used, ineffective, etc.

*Please use a different answer from the Chegg since my friends already use it. Thankyou.

Answer 1

Effective decision making is the process through which alternatives are selected and then managed via implementation to achieve the desired business objectives.
It is the process of making choices by identifying a decision, gathering required information, and processsing alternative resolutions. By using a step-by-step decision-making process,it can help you to make more deliberate, thoughtful decisions by organizing relevant information and defining alternatives.
For example, There is a property development company which is facing the decision of whether to sell one of its properties now or later. There is a slump in the market and also a rumour that market may go down more. So,it's a decision to make by company, whether to wait for a year in the hope the property market improves or sell it now. If it sells the property now it knows it will receive $500,000.
However, if it sells in one year there are two possibilities:
1. There is a slump in the property market, so that the property can only be sold for $400,000. There is a nine out of ten chance that this will happen.
2. There is a boom in the property market, so that the property can be sold for $900,000. There is a one out of ten chance that this will happen.

For that, we can use decision tree analysis to identify the best decision for the company
Sell now - result = $500,000.
Sell in a year:
$400,000 X 9/10 + $900,000 x 1/10 = $450,000
We can see that the preferred option is to sell now, because the outcome is lower $450,000 than to sell now $500,000.

Now, taking one example from the corporate world. Pepsico is selling potato chips under the brand Ruffle Lays in India. They purchased one local company of potato chips called "Uncle Chips". Now, they have problem that in some territorry there both brands were eating each other shares.
Now they have to take decision. Following Steps:-
1. Identify the decision:-
Company realize that we need to make a decision Here the decision is to keep production of uncle chips or to remove it from there portfolio.

2. Gather relevant information:-
In this step, collect some pertinent information before company makes some decision like what information is required, sources of information, and how to extract it.
Here company will compare sales data of both the brand as per the territorry which will result in evaluating the data.

3. Identify the alternatives:-
This is the step where company collects information which will result into probably identifying several possible paths of action, or alternatives. Overall, company will list all possible and desirable alternatives.

4. Weigh the evidence:-
After analyzing the information , what would be the results out of each of the alternatives to the end. Company will evaluate whether the need identified in Step 1 would be met or resolved through the use of each alternative. As company go through this difficult internal process, it will begin to favor certain alternatives: those that seem to have a higher potential for reaching your goal. Finally, place the alternatives in a priority order, based upon company's own value system.

5. Choose among alternatives:-
Once company have weighed all the evidence, they are ready to select the alternative that seems to be the best one for you. Company may even choose a combination of alternatives. Company choice in Step 5 may very likely be the same or similar to the alternative company placed at the top of company list at the end of Step 4

6. Take Action
Company is now ready to take action by beginning to implement the alternative which company chosed in Step 5
Here Pepsico, finalize to stop production of uncle chips and fullfill its gap by ruffle lays.

7. Review your decision & its consequences
This is the final step, company consider the results of decision which is taken and evaluate whether or not it has resolved the need that were identified in Step 1. If the decision has not met the identified need, then company may want to repeat certain steps of the process to make a new decision. For example, company might want to gather more detailed or somewhat different information or explore additional alternatives.
Here in Pepsico, it was finalized that potato chips will not sell under Uncle chips and this process will be done gradually.

Consequences :-
After implementing this, Pepsico reduced its production of uncle chips gradually. They hoped that it will benefit the sales of Ruffle lays and will reduce the production cost too.
But there decision were not successfull as they missed the part of geographic taste. Uncle chips was old brand in India before Ruffle lays penetrated the market. It had develope unique taste buds among the consumers whcih was not fullfilled by Ruffle lays.
So, they missed geographic and local taste of North India in step 2 of decision making .

After huge demand of Uncle Chips , Pepsico has to start again the production and drop the idea of stopping Uncle Chips production.