Decision making in a global environment
|✓ Paper Type: Free Assignment||✓ Study Level: University / Undergraduate|
|✓ Wordcount: 391 words||✓ Published: 12th Jun 2020|
QuestionConsidering the dynamic nature of the globalised business environment, identify and explain the most suitable decision making techniques which can be used by a manager as well as the importance of contingency planning in such a business environment?
AnswerFor a globalised business the scope and nature of its business environment is much greater and more complex than for those simply operating at a domestic level. Because of this, and because of the scale that normally is found in globalised businesses, decisions made by leadership take on even greater significance. There are many ways for globalised businesses to misstep, and so leaders and managers must have suitable approaches to avoid this. Many decision making techniques exist, and there are many that prescribe statistically based methods such as decision matrices, analytic hierarchy process and similar. However, these methods are often best suited to situations with low numbers of variables and where competing alternatives are fairly certain. This makes them inappropriate for decision making within globalised companies as these are often dealing with unknown quantities and facing unanticipated consequences. Instead decisions must be made with a holistic approach that seeks to gather as much information as possible, quickly, and in a condensed form. This can allow individuals or teams to analyse the situation using tacit knowledge and experience in order to form judgements. In this manner there is a high dependence on the abilities and experience of individuals, however this is unavoidable as it is the only way to capture all valuable personal knowledge within the decision making process. To ensure good decision through this route it is essential that the decision makers are of the highest calibre and are suitably trained to make rational and objective decisions, hence why companies invest large amount in attracting and training top leaders. There also needs to be sufficient informational and analytical infrastructure to support them. Because of the uncertainty in decision making at this level and because of the potential for error it is essential to make probabilistic decisions and develop contingency plans for alternate scenarios. This protects the company from damage by mitigating consequences.
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