operational decision making

What are corporate objectives?

Specific (SMART) objectives that target the business as a whole.

What is the focus and time frame of strategic objectives?

Focused on long-term goals for the whole business.

Who typically sets strategic objectives?

The board of directors.

What are some characteristics of strategic objectives regarding risk and investment?

They involve higher risk and uncertainty, and likely significant investment.

How easily can strategic objectives be changed?

Difficult to change in the short-term.

What is the focus and time frame of tactical objectives?

Focused on short-term goals at a functional level.

Who typically sets tactical objectives?

Line management.

What are some characteristics of tactical objectives regarding risk and resources?

They are relatively low risk and involve limited resources invested.

How easily can tactical objectives be changed?

Relatively easy to change at minimal financial cost.

Name five factors that can influence business objectives.

Money available to invest, resources, legal status/business ownership type, views of owners/managers, legislation, political factors, new or established business, market dynamics, level of competition, size of business, market conditions, attitudes to risk, corporate culture, state of the economy, or social attitudes.

What is Sainsbury's mission statement according to the case study provided?

To be the most trusted retailer where people love to work and shop!

What is an example of Sainsbury's commitment to community and environment from the notes?

Donated \u00a3136 million worth of Active Kids equipment since 2005.

What are strategic decisions?

Long-term decisions that might involve a great amount of resources and are difficult to change, often taken by senior management.

What are tactical decisions?

Short-term decisions that are taken more regularly and require fewer resources than strategic decisions.

What is opportunity cost?

The cost of choosing one thing over another, which is the alternative choice.

How is risk defined in decision-making?

The probability of something going wrong with decisions.

What is uncertainty in decision-making?

It occurs when there is a lack of information about a situation, meaning the outcome is very difficult to predict.

What is scientific decision making?

Making decisions based upon data where managers use quantitative information, such as decision trees.

How do managers make decisions based on intuition?

This is where managers use their experience and gut feeling.

What is a decision tree?

A simple and visual way of presenting the alternative courses of action available when making a decision.

What key information do decision trees identify?

When a decision has to be made, the estimated financial result of each outcome, and the choices available.

In which direction are decision trees drawn?

From left to right.

What values and outcomes are typically included in a decision tree?

Value options, possible outcomes, the expected cost of the decision, and the financial outcome/reward.

How does a business determine the best course of action using a decision tree?

The business should choose the option with the highest net gain.

What are some key benefits of a thorough decision-making process involving quantitative data and alternatives?

It takes into account risk, shows alternative options, provides quantitative data, allows comparisons, encourages logical thinking, and leads to more informed decisions.

When making business decisions, what is an example of a qualitative factor?

Examples include the quality of imported items, CO2 emissions from transport, ethical and social considerations, or how buying locally benefits the local economy and customer perception.

What are the drawbacks of decision-making processes that rely heavily on estimates?

They rely heavily on estimates which may be biased, can be non-dynamic or out of date, may not consider external factors, and might overlook qualitative aspects.

How does a business's mission influence decision-making?

A decision must align with the business's overall purpose.

How do business objectives influence decision-making?

The decision should help the business achieve its goals within a specified time period.

What role do ethics play in business decision-making?

The decision must be morally right and meet the business's own ethical standards.

What are common resource constraints that influence decision-making?

Time, human resources, finance, and expertise.

What external factors can influence a business's decision-making?

Competition, fluctuations in the economy, and competitors' actions.

What is a key characteristic an effective leader must be above all?

Inspiring

According to Peter Ferdinand Drucker, what defines a leader?

A person who does the right things

Which management and leadership style could stifle genuine two-way communication and demotivate employees?

Autocratic

Which management style employs a type of consultative management that concerns itself with the social needs of employees?

Paternalistic

Which management style involves delegating complex tasks to skilled employees to encourage and increase employee motivation?

Laissez-faire

What management and leadership style is typically prevalent in a military environment?

Autocratic

Which management and leadership theory shows a relationship between the level of freedom and degree of delegation a manager gives subordinates and the level of authority the manager uses?

The Tannenbaum-Schmidt continuum

What management style is most commonly used in an extremely centralised organisation?

Authoritarian

What is most likely a characteristic of scientific decision making?

Backed by research

How is an opportunity cost defined?

The next best thing that could have been chosen but wasn't

What is the valid range for the value of probability used in decision trees?

0 to 1

If Option A has a cost of £2m and a net gain of £3.2m, what is the expected value?

£1.2m

How are net gains of a decision, as shown on a decision tree, calculated?

Subtracting costs from expected value