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MRS.HASANTHI GAMAGE 15-05-2017

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ASSIGNMENT 1

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DIPLOMA OF BUSINESS ACBT-KANDY

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Table of Contents

01. Introduction -----------------------------------------------------------------------------------------01

02. How quick decisions prevent the organization to take Effective Decisions-------------- 02

2.1 Problems that prevent effective decision making--------------------------------------02

2.2 Decision making steps --------------------------------------------------------------------03

03. Making decision in uncertain environment------------------------------------------------------07

3.1 quick decision lead to bad choice--------------------------------------------------------08

04 .Organization failure--------------------------------------------------------------------------------09

4.1 .The main reasons for organizational failure--------------------------------------------10

05 .Conclusion ------------------------------------------------------------------------------------------12

06 .References
-------------------------------------------------------------------------------------------13

01. Introduction

Hypothesis: - Making quick decision in uncertain environment will lead to organization

failure

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Independent: - Quick decision making

Dependent: - Organization failure

Decision making is one of the main things in our lives. When we are with the family and

working in the organization in every time we make decisions. Whether decisions correct or

wrong. We make mistakes along the way. Any managers decision affect to the organization. It

will affect to the customers, competitors, suppliers, labor market.

Uncertain environment means it can change anytime. The organization cant guess what will

happened in the future.

Environment uncertainty we can defined as when the conditions are changing in the

organization environment as a result of that when the managers are make decision which is

related to the organization activities managers has less influence on outside factors of the

organization, management has the responsibility to take the decisions within the organization

which is relate to the organization environment. (Mlkoren, 2016).

When we are in a difficult situation and if we dont have time to make alternative we choose

the first option as the best option. It is known as satisfying. (Decision making n.d. 2012)

02. How quick decisions prevent the organization to take

Effective Decisions
Due to the global changers it is really affect the decision making process in the organization.

When making decision in a complex as well as uncertain situation, its affect on top to bottom

in the organization structure.

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However decision making under uncertainty, it requires information about the relationship

between states and the action benefits of outcomes etc. due to quick decision making it

prevent the organization to follow the proper decision making process to make an effective

decision within the organization. (Polasky et al. 2011, .pp. 398-404)

2.1 Problems that prevent effective decision making

Basically in the organization top level managers make the organization strategic decisions.

Those decisions affect to the organization highly

There are some problems that can prevent effective decision making

1 .Not enough information

2 .Too much information
3 .Too many people
4 .Emotional Attachments
5. No Emotional Attachments

Sometimes managers are faced difficult to make decision because due to the lack of attention
(Decision Making ,n.d.)

2.2 Decision making steps

Strategic decision making can be viewed as a special kind of decision making under

uncertainty such decision making involves the activities of goal formulation, problem

identification, alternatives generation, and evaluation. Researchers in behavioral decision

theory have identified a number of cognitive simplification process which may affect the way

decision maker perform these tasks .( Schwenk 1984 pp. 111-128)

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Using a step by step decision-making process can help you make more deliberate.

There are steps to make decision because of effective decisions cant make really quick,

decision must be effective one for the organization.

Effective and successful decision make profits to the company and unsuccessful quick

decisions may make loss to the company. Making successful strategic decision are more

important the company. Decision making is a core unit in a company

Mainly there are seven steps to make decisions.

01, Identification of decision requirement / Identify Problems

When the manager realizes that he needs to make a decision. And understand the nature of

the

decision

that you

want to

make

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There are some questions one should ask when it comes to identifying the purpose of
decision

What exactly is the problem?

Why the problem should be solved?

Who are the affected parties of the problem?

Does the problem have a deadline or a specific time-line?

Awareness of a problem, or opportunity, is the first step in the decision sequence.

02. Information gathering

To make a decision there should not be the uncertainty. Managers do have sufficient

information about the environment .managers has to deeply analyze. From they can make a

better decision. Because managers should know and understand the decision situations before

developing a alternative
What is causing this situation?
When did it occur?
Where did it occur?

03. Development of alternatives

Developments of possible alternatives are the important part in the step three. After

recognized the problem or opportunity .and that alternative must responds to the needs of the

situation and correct the underlying causes.

04. Weight The alternative

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In this step need to imagine what would be happen if you carried out each alternatives for the

end. And think and evaluate it can solve the step 1 problem through using each alternatives.

After that you need to favor certain alternatives.

05. Select of desired alternative

And another important thing is from the alternatives we found select the most promising

alternative.
Managers can choose the best alternative from least amount of risk and uncertainty .you need

to compare each alternatives from their positive and negative. Your decision making

Experience can play in this step

06. Implementation of chosen alternative

The successful of the chooses alternative depends on how it can implement to the real

situation. Convert your alternative in to a plan or a sequence of activities.

Managers management skills, motivation, leadership skills, communication must be used

because some alternatives never become reality because managers lack of resources energy

needed to make things happens.

07. Evaluation and feedback

In the last step managers analyze about the output how far the alternative implement to the

solution, is it positive feedback or negative feedback. Whether there is you should learn and

implement in the future decision making. And when the decision making process is

continues never ending it is more important. And this is a very good system that you can

improve your decision making skills(Decision making process n.d. 2017)

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In this chapter discuss the decision making process and the barriers for making effective

decision in the organization. above these points emphasized the fact that, making quick

decisions prevent to follow the proper decision making process within the organization, As

we all know decision making process play a main role in the entire organization activates .

Because organization success and the failure depend on decision making process in the

organization

03. Making decision in uncertain environment

Environment uncertainty we can defined as changers occurs within the organization

environment .Therefore as the manager of the organization has a less influence over the

elements in the outside of the organization, for a example the economy of the country can fall

in the anytime. This economy condition of the county directly effect on the organization.

As an organization they need to prepare to face any changers that can happen in the future.

However in this modern society organization can deal with uncertainty in the environment.

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But for that it is really helpful to change the organization strategic according to the

environmental changers.( James, 1950,pp.528-529)

For example a company can force on differentiate the products to compete with the

competitors and the changers in the market. This might be a great thin survive in an uncertain

situation as a company. Not only that company can forces on the number of workers

production quantity, suppliers, consumer demands for company good etc. this will help to

company to deal with the uncertain environment (Mlkoren, 2016) .

As an example in 1990s Kmart tried to compete with Walmart prices. Wall mart invented a

system called just in time this help to increase the efficiency and the sales of the Walmart

but at the sometime a Kmart fail to implement a system like Walmart, then consumers this

will led to decrease the consumers trust due to the out of stocks of good .from 1998-2000

Walmart prices are increase at the same Kmart prices are felt. Kmart was unable to restock

the stores and also fail to implement a system to compete with the competitors in uncertain

environment. Therefore the company faced bankruptcy in 2002 (The Worst Business

Decisions of All Time. n.d. 2012.)

This real life example clearly shows us decision making in the uncertain environment at right

time really important for efficiency of the organization as well as to survive in the market

without fail.

3.1Quick decisions lead to bad choice

Making quick decisions in uncertain environment is more affected to the organization than

other situations. When a person is making a quick decision it may save their time and their

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energy, but when they are making the decision without concern about the process of a making

decision those reactions leads to bad choices.

When people make quick decisions, they tend to make more mistakes. When Brain cells

become hypersensitive to new information, even bad information, making us likelier to draw

faulty conclusions.

When we try to do things too quickly, we tend to make more errors and then when we slow

down we tend to be more accurate, Your brain sees things differently when you're placed into

a situation where you have to make snap decisions. (Ghose , 2012)

This chapter point out making decision under uncertain environment is a risk to the

organization .and its include a real life example about Kmart witch evident that managers

involving in making decision in uncertain situation. And how the quick decisions lead to bad

choice. Making proper decision at the right time will help to the organization to prevent

organization failure

04 .Organization failure
Organization will fail because of some decisions. When there is an uncertainty

And there are some risks to fail the organization

In the current society , organization have to fail to adapt to the uncertain environment t the

reason for that we can point out as the decision making pattern

For an example circuit city, Hollywood video etc. try to compete with the competitions but

they pay less attention to response to the changers in the organization in the environment.
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In simple words their unable to adapt to the uncertain environment as an organization. This

will badly affect on circuit city as well as Hollywood videos and these organizations faced

bankruptcy.(Lux, 2012 ,p.1).

As a example to the organization failure environment

The digital camera develop by Kodak in 1975 ,but due to the fear of sales loss they didnt

invest in the technology to develop the digital camera further but as competitors Fuji and

Sony entered to the market in an effective way. They increased their investments to develop

the products. Therefore in 2001 Sony Company grab a huge market share. In 1997 Kodak

market share was $94 per share, this proof that as a company it took few years to fail due to

the poor decisions. Kodak dropped 65% per share in 2011 and fail for bankruptcy, due to the

fear undercut sales in the business they didnt involve in investing the technology to develop

the product further( Dougas et al., 2012)

This real life example emphasis the point the Kodak company was unable to adapt for the

uncertain environment due to the poor decision and finally

Above points clearly shows us it is really important to take decisions at the right time and

witch will not affect on the organization effectiveness and the efficiency, but most of the time

organizations may not forces on the reasons for organizations failure

4.1 .The main reasons for organizational failure

Financial management fail: - when the department fail to take the expenses, spending

income sources properly, this directly effect on make the profit margin of the

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 organization therefore it will become a batter in the future when make a budget

production and the plans in the organization.

Customer and marketing failure:- when a company does not have a proper marketing

plan or proper target market , then it will really effecting fail in the taking marketing

decision

Failure at the top:- as the top level management of the organization if they involving

in making poor decisions in the other words ineffective decision then it will leads the

organization to fail .As the strategic level top management have the responsibility to

take decisions the right time in an uncertain environment to adapt to the changers in

the organization environment as well as to achieve the organization objectives but

under uncertain environment it really advantage to follow the proper decision making

process to overcome from take quick decisions. Which can lead the organization to

success .(McPheat, 2009)

In this chapter it discusses reasons for organization failure when involving in decision making. Due to

the in ability to adapt to the changers of organization environment, we can simply state that in ability

to adapt to adapt to the uncertain environment will leads the organization to fail thought out this

chapter its indirectly shows us the important of making proper decision in the organization at the

right time will help to organization success without fail, moreover in the current scenario the

organization are tent to make quick decision under an uncertain environment without giving much

attention to adapt to the changers in the organization environment will lead to fail the organization.

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05 .Conclusion
Throughout this report it is evident that quick decision making in an uncertain environment which

leads organization fail. As the management of the organization it is really helpful to identity the

factors affecting in uncertain environment, thought that the organization can be take rational

decision instant of quick decision to adapt to the changers in the organization environment. By

following the proper decision making process the organization get a change to make decision in a

rational way, which will not harm to the organization success. Thought out this report it is clearly

shows us under uncertain situation organizations are involve in make quick decision making to adapt

to the changers in the organization environment but it leads the organization to fail. Study of proper

decision making is a path to survive the organization in the market without fail.

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06 .References

Douglas, A. Mcintyre,.Ashley ,C. Samuel Weigley & Miclael,B. (2012) The worst Business
Decisions of all time, retrieved from http://247wallst.com/special-
report/2012/10/17/the-worst-business-decisions-of-all-time/3/

Decision making, (n.d.) retrieved from https://www.skillsyouneed.com/ips/decision-

making.html

Decision making (n.d).( 2012) learning Australia

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Decision making process. (n.d.) (2017). University of Massachusetts Dartmouth. Retrieved
from http://www.umassd.edu/fycm/decisionmaking/process/

Ghose T (2012 November 7), Why Quick Thinking Leads to Bad Decisions, Retrieved from

http://www.livescience.com/24605-fast-brains-make-mistakes.html

James, W (1950) Managerial decision making (Vol. 2).New York: Dover

Lux, (2012) Organizational Leadership in Times of Uncertainty, Journal of Transdisciplinary

Writing and Research from Claremont Graduate University, Volume 2
Claremont University Consortium, retrieved from |
http://scholarship.claremont.edu/lux/

McPheat S. (2009 June 9 ) The 4 Main Reasons for Organizational Failure. Retrieved from
http://www.mtdtraining.com/blog/organisational-failure.htm

Mkoren. (2016 September 28), Making decisions in uncertain environment | Middle School
Teacher | (Level3) Senior Educator, retrieved from
https://www.enotes.com/homework-help/what-environment-uncertainty-define-
give-some-574610

Polasky,R., Stephan Carpenter,Carl Folke& Bonnie Keeler. (2011). decision making under
great uncertainty, 398-404. doi : http://dx.doi.org/10.1016/j.tree.2011.04.007

Schwenk Charles R.,1984 , Cognitive simplification processes in strategic decision-making,

111-128 doi: 10.1002/smj.4250050203

Worst Business Decisions of All Time(n.d.) (2012 October 17) retrieved from
http://247wallst.com/special-report/2012/10/17/the-worst-business-decisions-of-
all-time/3/

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