Question

Managerial Decision Making Research and Analysis Focus of the Final Paper Research a specific company of your choice and identify some of the managerial decisions that were made over time and in response to changes in its market or competitive environment. Use the Ashford University Library and web-based sources for your research. At least three external scholarly sources must be used in addition to the textbook.

Address all of the following areas: Describe the company and provide a brief history of its operations. Find or use graphs to illustrate its financial performance over the years. Describe any sources of risk or uncertainty in its operations. Do the financial reports indicate risky or uncertain activities or changes to the economic environment that ultimately appear to have affected the company

Answer 1

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Basics
The typical decision-making process involves defining the problem, identifying alternatives, using a particular technique to select the best alternative and monitoring results. The problem definition may include a set of requirements and decision criteria. For example, a start-up's problem definition could be "Raise sufficient funds to finance annual revenue growth of 5 to 10 percent." Once the problem has been defined, feasible alternatives must be identified to address the problem. For example, the start-up's financing sources may include banks, venture capital funds and angel investors. Two important decision-making techniques are the pros-and-cons method and cost-benefit analysis.
Pros and Cons
The pros-and-cons technique is simple because it does not require complicated numerical modeling. The pros are the qualitative benefits or advantages for each alternative, while the cons are the disadvantages. The manager usually chooses the alternative with the strongest pros and the weakest cons. For example, if a retailer is evaluating two locations -- suburban shopping mall versus downtown promenade -- it may go with the downtown location because it offers the strongest pro: high year-round walk-in traffic; and the weakest con: higher lease costs.
Cost Benefit
The cost-benefit decision-making approach involves evaluating each alternative on its monetary costs and benefits. However, benefits and costs can stretch out over several years. This means that the net present value of each alternative needs to be calculated, and the alternative with the highest net present value is selected. The net present value is the sum of future cash flows discounted back to the present using a suitable discount rate, which could be the company's target rate of return or the three-month U.S. Treasury bill rate plus a discount factor. Cash flows equal benefits minus costs. Cash flow is negative if costs exceed benefits; otherwise, it is positive.
Other Techniques
Other decision-making techniques include the lexicographic and scientific methods. The lexicographic method selects the alternative with the best score on the most important decision criterion in a ranked list of criteria. For example, if price were the most important decision criterion for the acquisition of a new computer, the vendor with the lowest price quote would be selected. Instead of a list of alternatives, the scientific method specifies hypotheses, then uses experiments and observations to validate, modify or reject each hypothesis.