Types of Decisions

• Programmed Decisions

These are standard decisions which are routine and repetitive in nature. Such decisions have short term impact and are relatively simple. These decisions require little thought and judgment. For this kind of routine, repetitive problem, standard arrangement decisions are typically made according to established management guidelines. In programmed decision making there will be no error in the decisions because it is a routine and managers usually have the information they need to create rules and guidelines to be followed by others. But sometimes it can cause error but not of big kind. Programmed decision making are always used in daily routine to keep the organization running smooth.

• Non - Programmed Decisions

These are non-standard and non-routine. Each decision is not quite the same as any previous decision and is typically one shot decisions that are usually less structured than programmed decision. They are made in response to situations that are unique, poorly defined and largely unstructured. This means it is made for big decisions that will affect an organization in the long run. This type of decision making does not need rules or guidelines to be followed because the situation is unexpected or uncertain. Non-programmed decision has more chance of errors and is difficult for managers to handle as it is inherently challenging. Managers must rely on their intuition to quickly respond to a urgent concern. Also these errors are of dangerous kind, they affect organization badly. This decision is made on reasonable judgment and the circumstances if we proceed with the decision.

• Strategic Decisions

Strategic decisions are the decisions that are concerned with whole environment in which the firm operates the entire resources and the people who form the company and the interface between the two. These decisions affect the long-term direction of the business and are taken in accordance with organizational mission and vision.

• Tactical Decisions

Tactical decisions support strategic decisions. They tend to be medium range, medium significance, with moderate consequences.

• Operational Decision

These are short-term decisions as opposed to the longer-term strategic decisions, also called administrative decisions involving routine tasks.

Decision Making

Decision making is one of the most important aspects of a manager the job. It can be regarded as the mental processes resulting in the selection of a course of action among several alternative scenarios. Every manager should strive to improve their decision making skills. The effectiveness and quality of those decisions determine how successful a manager will be.

The decision-making process involves the following steps:

• Define the problem

• Collect Information

• Develop potential alternatives

• Analyze the alternatives

• Select the best alternative

• Implement the decision

• Evaluation and feedback

Define the Problem

The need of decision occurs when there is problem or opportunity. Problem is the difference between the actual and desired goal. If the problem is inaccurately defined, every step in the decision-making process will be based on an incorrect starting point. Therefore it is necessary to outline the goal and outcome. This will enable decision makers to see exactly what they are trying to accomplish and keep them on a specific path.

Collect Information

Gather data, have the ideal resources: information, time, personnel, equipment, and supplies; and identify any limiting factors. This will help decision makers have actual evidence to help them come up with a solution.

Develop potential alternatives

When the problem or opportunity has been recognized and analyzed, decision maker should begin to consider taking into action quickly. The next step is to develop possible alternatives solutions to solve the problem or avail the opportunity. Brainstorm to develop alternatives. Multiple solutions enable you to see which one can actually work.

Analyze the alternatives

The purpose of this step is to decide the relative merits of each idea. Managers must identify the pros and cons of each alternative solution before making a final decision. With the list of pros and cons, one can eliminate the solutions that have more cons than pros, making the decision easier.

Select the best alternative

After all alternatives have been analyzed, the manager must decide on the best one. The best alternative is the one that produces the most advantages and the fewest serious disadvantages. Sometimes, the selection process can be fairly straightforward, such as the alternative with the most pros and fewest cons. Other times, the optimal solution is a combination of several alternatives. The best chosen alternative should be the one which best fits the overall goals and values and also achieves the desired result with minimum use of resources and that should have least amount of risk and uncertainty.

Implement the decision

This stage involves the selected alternatives are put in action. The ultimate success of the chosen alternative depends on its translation into action because sometimes the chosen alternative remain the available solution but doesn’t come into action because of the reason of lack of availability of resources.

Evaluation and feedback

An evaluation system should provide feedback on how well the decision is being implemented and whether it has been effective and whether the desired results have been obtained or not. If the desired results have not been obtained then it needs to be seen what went wrong and corrective actions should be taken.

 

 

Business Continuity Planning

Business entities today exist in a highly competitive world. They are constantly innovating to meet their business objectives of providing essential and unique services to their customers. Technology advances have enabled them to achieve their varied strategies. And yet, the threats of disaster, on account of business interruption, are not extinct – in fact, they have also evolved along with the technology. Business interruption does happen – but what is of significance is, how much of the consequences of such interruptions can the business afford? Business Continuity Planning is the act of pro-actively working out a way to prevent, if possible, and manage the consequences of a disaster, limiting it to the extent that a business can afford.

There are various threats and vulnerabilities to which business today is exposed. They could be:

• catastrophic events such as floods, earthquakes, or acts of terrorism
• accidents or sabotage
• outages due to an application error, hardware or network failures

Some of them come unwarned. Most of them never happen. The key is to be prepared and be able to respond to the event when it does happen, so that the organization survives; its losses are minimized; it remains viable and it can be “business as usual”, even before the customers feel the effects of the downtime. An effective Business Continuity Plan serves to secure businesses against financial disasters. The bonus — customer satisfaction, enhanced corporate image and no dip in the market share.

One of the biggest challenges in continuity planning is identifying and protecting essential elements. An effective plan must be departmentally broad, and consider the needs of the entire enterprise. The goal is to understand what is critical, and to encompass all of the necessary parts (personnel, network, platforms, applications and data) when evaluating the components that support critical processes.

General steps to follow while creating BCP

• Risk assessment

Risk assessment is the exercise of identifying and analyzing the potential vulnerabilities and threats. Each of these areas should be looked at in the light of the business and the exact possible source located. The end result of the Risk Assessment should be a risk-benefit analysis statement giving the exact threats, and the estimated exposure together with the contingency and mitigation actions required, and also the benefits arising out of covering the risk. This statement should also delineate any assumptions or constraints that exist.

• Business Impact Analysis

Business Impact Analysis (BIA) is essentially the process of identifying the critical business functions and the losses and effects if these functions are not available.

• Approval

Obtain the commitment of the management and all the stakeholders towards the plan. They have to set down the objectives of the plan, its scope and the policies.

• Implement

The BCP project team must implement the plan after it has been approved by the management.

Business Continuity Planning should include strategies on:

• Prevention
• Response
• Resumption
• Recovery
• Restoration

Prevention aims at lessening the chances of the disaster happening.

Response is the reaction when the event occurs. It must stem further damage, assess the extent of damage, salvage the business entity's reputation by providing appropriate communication to the external world and indicate a possible recovery time-frame.

Resumption involves resuming only the time-sensitive business processes, either immediately after the interruption or after the declared Mean Time Between Failures (MTBF). All operations are not fully recovered.

Recovery addresses the startup of less time-sensitive processes. The time duration of this naturally depends on the time taken for resumption of the time-sensitive functions. It could involve starting up these services at an alternate location.

Restoration is the process of repairing and restoring the primary site. At the end of this, the business operations are resumed in totality from the original site or a completely new site, in case of a catastrophic disaster.

Knowledge Management System

Knowledge Management System refers to a system for managing knowledge in organizations for supporting creation, capture, storage and dissemination of information. It can comprise a part of a Knowledge Management initiative.

Useful information usually resides in various documents, email messages, chat transcripts, projects, processes, and most of the time in people's heads. Most of the time this knowledge isn't stored and therefore it is difficult to retrieve it when necessary. Information about processes and practices are usually resident in a particular individual's head and thus is even more difficult to capture and use.

People are forced to indulge in repetitive work when they could actually tap into a knowledge system and work in a more innovative manner. A knowledge management system allows access to information based on the role the user plays. This system would connect to all kinds of documents like web pages, text documents, spreadsheets, emails, images, etc.

The system developed should capture all the different kinds of information existing in the organization and also shall make it easy for all the employees to capture, store and disseminate information. The knowledge stored in this system must be accessible to search parameters and operate in the same manner that the human brain does. It should collate, organize, store and retrieve information in an effective manner.

Once created the system should manage it on its own. From an easy-to-use interface it should help collaborate workflows and harvest employee knowledge, both of the tacit and explicit kind. A workflow process library, a document management system and an event management system are some of the essential parts of a knowledge management system.

A knowledge management system introduces the elements of expertise and experience through collaboration capabilities and shortens the time it takes to make better decisions. Free flow of ideas encourages innovation and improves efficiency.

Knowledge repositories, e-learning applications, discussion and chat technologies, search and data mining tools, synchronous interaction tools are all part of a knowledge management system A successful knowledge management strategy happens only when a culture of knowledge sharing is inculcated in the organization. No system or technology, however efficient will help unless every prospective knowledge owner understands this fact.

Market Segmentation

Any single product does not necessarily appeal to all customers alike, it varies depending on their needs, taste and lifestyle. Therefore, in order to make their marketing strategies effective the sellers segregate the markets, also termed as market segmentation.

Market segmentation is the division of markets into categories or groups of customers with similar tastes or needs; it would also be based on the region, income group, cultures, etc. The markets are divided into segments so as to enable the seller to market his products in an effective manner.  It helps the seller in identifying which market sectors are most important and how to best address its needs.Sometimes even the same product is advertised in different ways to different groups, and in some cases the product is modified to appeal to a specific group of buyers. In general, it is used to maximise the impact of advertising expenses incurred by the seller.

Market segmentation can be done on the following basis:

Demographic segmentation:

Segmentation is done on the basis of gender, income, age, educational qualification, profession etc. The segmentation can include one factor or several factors in combination. For instance, music downloads are tend to be targeted to the young, while hearing aids are targeted to the elderly; some products are targeted only to women and others only to men.

Geographic segmentation:

Markets can be segmented on the basis of its geographic width, maybe globally or even on local basis. In many situations the needs of potential customers in one geographic area are different from those in another area. This may be due to climate, custom, or tradition.

Price segmentation:

A market can be segmented on the basis of variable prices charged. A same product can be sold at two different prices depending on varying income levels, geographical differences, etc.

Lifestyle segmentation:

The market is segmented on the basis of customer attitude, behavior, emotions, habits, interests, perceptions, speculation etc. This technique is particularly useful for the service industry and lifestyle products.

Time segmentation:

This is based on market dependency on the time factor. It could be on the basis of seasonal demand fluctuations, weekday and weekend fluctuations, or even daily fluctuations.