Introduction
Whether in a continuing business or when starting up a business, there is a decision that has to be made. In making a decision the first thing to do is to define the challenge that calls for a decision to be made. There are problems that require either a “no” or a “yes”, others require an urgent solution and others can wait for a certain period of time for alternative solution to be arrived. Generally, to have a job well-done it is of great importance that people involved start from the beginning.
Decision making is not an exemption. In this stage, a good context of the problem is grasped. It is only after getting the correct understanding of the problem that a person can make a good decision. People who are directly affected by the outcome of decisions and those who understand the way the problem arose should be contacted.
Decision-making is central to an understanding of organizations and of business. Organizations which are in so many respects incredibly efficient and reasonable sometimes seem to do such daft or dangerous things (Po & Thomas 1997). The London Olympics 2012 creates a good opportunity for Coca Cola Company in the supply of soft drinks.
However, the success of this opportunity depends on the decisions made by the top managers of the company. This paper looks at the process of decision making, the major techniques to be used in decision making, and the relationship between decision-making and the success of Coca Cola Company in the 2012 Olympics.
Business Decision Making
An effective manager should ensure that he/she consults those who matter and those who are aware of the problem. However, Depending on the problem, the people to be consulted differ. Consultation assists in making a more informed decision and assists in generating more alternatives of choice (Koller 2005). Their opinions and viewpoints should be considered in the final decision making, but the manager should always keep in mind that it is his/her responsibility to come up with the right decision.
After taking time and pondering over the issues; time taken depends on the urgency of the decision, a manager chooses and implements the best alternative. At the initial stage a lot of support of the decision is required to ensure that the whole organization or the departments concerned have adopted it effectively.
It is not always that a decision made bring the expected results; thus feedback from the people on the ground and the general performance of the business should be sorted so as areas that need improvement is recognized. In-case an area that needs improvement has been recognized, it should be addressed appropriately (Menne-Haritz 2004).
Decision-Making Process
Some of the decisions made up managers are not part of a premeditated, logical, and incessant decision-making process. As an alternative, succinctness, variety, and scrappy activities illustrate the manager’s characteristic work. Also, in spite of its importance, managers do much more than make decisions. They also serve as leaders, entrepreneurs, and representatives. For most managers and executive leaders, decision-making is a self-motivated process.
It is multifaceted and some times indefinite. Decision makers come across problems when looking for information, and at times they are forced to work with tardy feedback of results, ambiguity, vagueness, and, in some cases, disagreement all through the process of decision making. In many situations, managers seem to engage in an informal causal analysis in an attempt to favourably influence decision outcomes (Triantaphyllou 2000).
Managers encounter three types of decision; selection from a list of alternatives, evaluation of alternatives using criteria and decision rules, and design and construction of a custom solution. Each decision situation can also be categorized as routine and recurring decisions or as nonroutine or infrequent. Making better decisions is an integral part of organizing work and complements the processes of good planning and prioritizing. In this stage the manager should gather all relevant data and facts (Shane 2003).
It is from the facts and data that he develops various alternatives choices that can be used to solve the problem at hand. There are various methods of collecting data; they include researching, brainstorming, and experimentation. It is the manager’s duty to choose the right method to adopt because different problems call for different methods (Salaman 2001).
To assist on the decision-making process, a logical sequence should be followed as shown below
All decisions should be made using as much full and accurate information as is available. Nevertheless, this does not at all times assure that the correct decisions will be made. It may be necessary to change direction and alter priorities if the approach is not working as expected.
For instance, new variables may have been introduced; the consequence of the decision, once implemented, may be unacceptable; the decision simply might not achieve its intended goal, or the decision may impact detrimentally on established timeframes (Baker 1981).
Effective use of decision-making processes enhances the development of competent organizational skills, and contributes to the successful achievements of goals. On completion, tasks should be reviewed to check whether states timelines have been met. By analysis these activities, employees can distinguish between those directly related to achieving the goal and those that hindered the process (Daft 2009).
Decision Making Techniques
Ideally, perfect solutions tend to show up by continued iteration, but often there are at least some options that fit the combination of risk and urgency presented by the problem (Simon 2000). A number of techniques have been made to advance the process as discussed under
Linear programming
Linear programming is an important aspect in the process of decision making. This is because; it helps in maximizing profits and minimizing costs for a company. Managers are able to estimate prices and sales in units which can help in maximizing returns. Resource allocation problems can often be resolved mathematically by linear programming. Linear describes an accurate and directly comparative relationship between two or more variables (Kahneman & Tversky 2000).
For example, if the production of one unit of a product involves two machine hours then ten units would require 20 would require 20 machine hours. Programming entails the use of certain mathematical techniques to get the best probable solution by using limited resource (Kline 2010). However, before a problem is solved through linear programming, certain requirements have to be met. These are:
- There must be a purpose to achieve (for instance maximize profits).
- There must be a variety of courses of action, one of which will achieve the objective.
- There must be restriction on resources.
- It should be possible to articulate the objective function and the constraints as linear mathematical equations or inequalities.
Benefits and Limitations
There are several benefits of the linear programming approach. First, it eliminates many of the interpersonal problems associated with group decision making approaches. Second, it enlists the assistance of experts and ensures that time is used efficiently. Third, it allows adequate time for reflection and analysis of a problem.
Fourth, it provides for a wide diversity and quantity of ideas that are cost effective. And finally, it facilitates the accurate objectives of linear programming. Today, many organizations in business, schools, healthcare agencies, and government are using the linear programming (Kahneman & Tversky 2000). Research shows that linear programming is superior to ordinary group decision making in terms of the benefits it generates to an organization.
Limitations of linear programming are:
- It can only be used in linear functions.
- Linear programming does not take into consideration factors such as weather conditions.
- It may give practical answers that are not desirable.
- All parameters are alleged to be constants which may not be the case.
Gantt Chart
This is a graphical representation in the form of a bar graph showing the progression of a project. A Gantt chart shows the relationships among the project tasks, along with time estimates. The horizontal axis of a Gantt chart shows units of time(Doss, et al. 2003). The vertical axis shows the activities to be completed.
Bars show the estimated start time and duration of the various actitivities. They are often modified in various ways to provide additional information. If the project team has access to project management software, it can use the software to draw Gantt and milestone charts (Pearce, et al. 1977).
Gantt charts provide a standard format for displaying project schedule information by listing projects activities and their corresponding start and finish dates in a calendar format. They are sometimes referred to as bar charts since the activities start and end dates are shown as horizontal bars.
One can use a special form of a Gantt chart to evaluate progress on a project by showing actual schedule information. the planned schedule dates for activities are called the baseline dates, and the entire approved planned schedule is called the schedule baseline. The following chart is an example of Gantt chart that can be used to in project control
The horizontal axis represents the time scale for the project whereas the rows represent the start and the end dates of different tasks in the project. Each chart begins when the one above it is completed (Kepner & Tregoe 1985). However, there are instances where a task begins before the completion of another and this is represented by overlapping of bars.
Benefits and Limitations
One of the benefits of using project controls such as the Gantt chart is that it offers a graphical overview of the progression of a project that is easy to understand.
It is used to display the activities involved in a project, helps in planning project activities, it gives a basis on which to carry out tasks, allocate scarce resources, and also helps in monitoring projects (Mintzberg, et al. 2003). It is a simple technique that can be understood by virtually everyone in an organization. It is cheap, encourages creative thinking, and a quick way of coming up with new ideas.
Despite its many benefits, Gantt charts have many limitations which include;
- They only represent few constraints, for instance cost, time, and scope, and ignore the rest (Bethke 2007).
- They do not represent the actual size of a project.
- Gantt charts are normally complex in representing projects.
- it should be maintained and updated regularly.
Forecasting
Almost all business decisions are based on forecasts. This is because most of the decisions made are realized in the future. Forecasts are an important aspect in every organization and it is a continual process. The impact of forecast on the performance of an organization can be measured from time to time. Original forecasts should be updated by modifying present decisions (Baker 1981).
To do this it calls for a different approach to decision making process, this includes employing qualified sales people who understand the market, and enhance their efficiency. The approach to sales is changing from non-personal approach (use of posters, brochures and television/radio adverts) to personal approach (includes one on one interaction with the customer and live charts over the internet). To attain these sales representatives must be trained and developed (Snow 2008).
Traditional transactional sales were involved at creating awareness and persuading a buyer to buy product from the company, the approach was enhanced at a short term relationship where after a successful purchase in the modern relationship selling where sales associates have a follow up to a customer. The following chart shows how forecasting can be used by a manager in making decisions
Benefits and Limitations
Forecasting models can be used by a manager in making decisions. It helps in investigating the impacts of various courses of action that can be taken by an organization, among other functions. Despite its wide usage, a recent review of the empirical evidence indicates that forecasting often does not live up to its promise because of difficulties in providing appropriate contribution opportunities for individuals in the organization, members’ evaluation apprehension, and processes (Niu, et al. 2009).
The major limitation of forecasting is that the future is full of uncertainties and forecast can not be relied upon fully in designing business projects. There are so many things that have to be put into consideration besides forecasts.
Coca Cola Company in the London Olympics 2012
Coca cola has used different strategies that have contributed to its success. These are cost leadership strategy, adaptation of the environment, product differentiation, and strong leadership. It has realized a high turnover growth which offsets its low profit margins and enables sustainability of the cooperation’s price-based competitive advantage. In addition to reinvestment of margins, Coca cola has achieved differentiation through its products as well as imperfect mobility of its brand name, which is inimitable.
Coca-cola is a multinational company that is well known in the market; however since the company is aiming at a onetime market at this time the method that should be adopted is the consumer behaviour model. Coca Cola Company is the leading company in the world which has monopoly powers in the production and distribution of soft drinks. However, for it to be successful in acquiring the biggest Market share in the 2012 Olympics, it has to involve all its stakeholders in making decisions.
Under this method focus is on the “brand royals”. Since the company has the advantage of being internationally recognized, the task of the managers will be associating the brands to the celebrities that are more likely to attend the games (Pearce & Robinson 2009).
The company has been in the market for long and thus the advertisements should have old models and celebrities. Persuasion statements should be put on the adverts for example, “Hussein Bolt won 100metre race, 200merte race 400metres and relaxed with a cold coke” (Snow 2008).
Coca Cola Company aims at giving a life time experience to their customers with the kind of services they offer, it takes it as their personal initiative to create a close link to their customer. To attain this it must train and develop its sales associates to appreciate the need to relationship selling (Harvard Business School Press 2006).The target population is the participants and the fans.
Here the advertisement decisions should be flamed in such a way that the fan feels that they are connected with the participants in the games. The language used should be one that recognizes the support of a fan an example “I support 2012 Olympics; I take my drink is Coke”. This can be printed on promotional products like T-shirts that are freely distributed. Another form that can be put on posters all around the town “lets the Olympics make us happy, let Coca-cola makes the town red, let me relax with a bottle of Fanta.”
The above should be on a Coca-cola background. The aim of the above strategy is to create the sense of belonging to the target customer (Olympic.org 2010). When this is attained, psychologically, the potential customer is persuaded to believe that he, the Olympics and Coca-cola company are in a partnership, there is the sense of belonging and this the first step market positioning.
Conclusion
The success or failure of any business or organization depends on the organizational behaviour perceptions. The way the management team together with the employees handles these perceptions determines whether the organization will close its operations or it will continue.
This is because management and employees are responsible for the future development of the organization. Decision makers today face problems that are increasingly complex, and interrelated. Many important decisions routinely made are dynamic in nature, a number of decisions are required rather than a single decision, decisions are interdependent, and the environment in which decisions is set changes over time.
The development of managerial capability to cope with dynamic tasks is ever in high demand. However, the acquisition of managerial capability of decision making in dynamic tasks has many barriers. On completion, tasks should be reviewed to check whether states timelines have been met. By analysis these activities, employees can distinguish between those directly related to achieving the goal and those that hindered the process.
The success of an organization is dependent on the quality of decision made by its leaders. One of the major attributes that make a good leader stand out is his or her decisiveness. The quality of decisions made by a manager is reflected in the performance of his or her organization.
Leaders are supposed to make decisions which affect the organization that they serve. They should portray certain characteristics and play different roles. Businesses today are drastically changing their tactics in their efforts to remain competitive in the fast developing business world. The success of Coca Cola Company in the 2012 Olympics depends on the decisions made by its leaders.
Reference List
Baker, A. J. 1981. Business Decision Making. New York, Taylor & Francis.
Bethke, U. 2007. The Influence Of Business Associations In The European Decision Making Process – A Case Study Of The European Chamber Of Commerce And Industry. California, Grin Verlag.
Kepner, C. H. & Tregoe, B. B. 1985. The Rational Manager: A Systematic Approach to Problem Solving and Decision-Making. New York, McGraw-Hill.
Daft, R.L. 2009. Organization Theory and Design. London, Cengage Learning.
Doss, G. M, et al. 2003. IS project management handbook. New York: Aspen Publishers Online.
Harvard Business School Press, 2006. Essentials of strategy Harvard business literacy for HR professionals’ series. Harvard, Harvard Business Press.
Kahneman, D & Tversky, A. 2000. Choice, Values, Frames. Cambridge, the Cambridge University Press.
Kline, J. M. 2010. Ethics for International Business: Decision Making In a Global Political Economy. New York, Taylor & Francis.
Koller, G. R. 2005. Risk Assessment and Decision Making In Business and Industry: A Practical Guide. New York, Chapman & Hall/CRC.
Menne-Haritz, A. 2004. Business Processes: An Archival Science Approach to Collaborative Decision Making, Records, and Knowledge Management Volume 3 Of Archivist’s Library. New York, Springer.
Mintzberg, H., et al. 2003. The Strategy Process: Concepts, Contexts, Cases (4th ed.). New Jersey, Pearson-Prentice Hall.
Niu, L, et al. 2009. Cognition-Driven Decision Support for Business Intelligence Models, Technigues, Systems and Applications. New York, Springer.
Olympic. 2010. Official website of the Olympic Movement. Web.
Pearce, J. A. & Robinson, R. B. 2009. Strategic Management: Formulation, Implementation, and Control (11th ed.). New York, McGraw-Hill.
Pearce, M. et al. 1977. An Introduction to Business Decision Making; Text and Cases. Canadian Business Administration. New York, Taylor & Francis.
Po, L. G. & Thomas, R. K. 1997. Demography for Business Decision Making. New York, Greenwood Publishing Group.
Salaman, G. 2001. Decision Making For Business: A Reader. London, Sage.
Shane, S. 2003. A General Theory of Entrepreneurship: the Individual-Opportunity. Nexus, Edward Elgar.
Simon, J. L. 2000. Developing Decision-Making Skills for Business. Washington: M. E Sharpe.
Snow, J. 2008. Why Is Logistics Important? Web.
Triantaphyllou, E. (2000). Multi-Criteria Decision Making: A Comparative Study. Dordrecht, the Netherlands: Kluwer Academic Publishers. Web.