Question

Review the contents of The Wall Street Journal. Then, identify and categorize three types of investment decisions appearing in the journal according to the types of strategic economics decisions discussed in this course.

1. Explain clearly the investment decision
2. Explain to which type of the strategic economics decision the investment decision belongs to
3. Explain why it belongs to this type of strategic economics decision
4. Provide your own analysis by clearly explaining if you support or not the investment decision

Answer 1

The Wall Street Journal : The Wall Street Journal, daily business and financial newspaper edited in New York City and sold throughout the United States. Other daily editions include The Asian Wall Street Journal, edited in Hong Kong, and The Wall Street Journal Europe, edited in Brussels.

Through the Wall Street Journal clearly the investment decision :

1. A firms resources are scarce in comparison to the uses to which they can be put.

2. Thus, a firm has to choose where to invest these resources. This is so that they are able to earn the highest possible return for their investors.

3. The two types of investment are long term and short term.

4. An example of a long term capital decision would be to buy machinery for production. This is important as it affects the long term earnings of the firm.

5. Short term investment is related to levels of cash, inventories, etc. These decisions affect day to day working of the business.                                                                                                   2. Explain to which type of the strategic economics decision the investment decision belongs to

Decision Making

Employees approach decision making in many different ways. Decision making is the selection of a procedure to weigh alternatives and find a solution to a problem. In addition, certain situations will require different approaches of decision making in order to be effective.

Directive

John Dirt is the most senior vice-president at Hearts Development firm. He prefers to make decisions using a directive style. This form of decision making relies on a rational and autocratic style that results in the employee using his own knowledge, experience and judgment to choose the best alternative. This type of leader is very rational, but thinks mostly about the short-term. John believes that a shopping mall is the best type of development for the land. He is going to present this decision to the CEO, based on the fact that he believes this is the best solution. He has built malls in the past, and will not consider any other options.

Conceptual

Susie Steel prefers to use the conceptual style of decision making in her job. She is more concerned with long-term results, brainstorming of alternatives, creative approaches to problem solving and taking higher risks. Susie gathered her team together and presented the issue of the undeveloped land scenario. She gave the team all of the key information she had acquired during her research.

3-Explain why it belongs to this type of strategic economics decision

Strategic decision-making is the process of charting a course based on long-term goals and a longer term vision. By clarifying your company's big picture aims, you'll have the opportunity to align your shorter term plans with this deeper, broader mission – giving your operations clarity and consistency.

4-your own analysis by clearly explaining

· An understanding of the importance of capital budgeting in marketing decision making

· An explanation of the different types of investment project

· An introduction to the economic evaluation of investment proposals

· The importance of the concept and calculation of net present value and internal rate of return in decision making

· The advantages and disadvantages of the payback method as a technique for initial screening of two or more competing projects