Management Decision Making
Management Decision Making
Introduction
AMCOM Communications Limited Inc. is an Australian company that deals with varied investments in technological and high speed connectivity service products such as cloud computing services, speed connectivity, communication tools, and internet communication tools to government, corporate, and wholesale customers (White, 2011). Over the last five years, the company has faced financial trouble and declining revenues forcing the company to implement a strategic therapy to minimize the increasing operational costs. Other challenges brought about by the declined revenues included declined profits, dwindled market share and loss of market share. However, evaluation of the company’s operational costs revealed that AMCOM Communications Limited was spending nearly 40% of its total revenues on employees. AMCOM Communications Limited Inc. was facing massive losses because of running a large employee capacity. The senior management and other top management officials were engaged in wrangles due to politicking thereby killing the morale of the workforce. Teams within the company lacked the morale, and most employees seemed less motivated (McMullen, & Morse, 2014). The company’s cost structure had a lot of defects because it allowed employees to enter a lot of putting additional overtime. For this reason, a massive retrenchment at the company seemed inevitable
Importance of Decision Making
The impacts of decision making in a business or company- both good and bad- are numerous (Shivakumar, 2014). Decisions such as beginning programs on customer loyalty and coming up with employee cutbacks need a rational process of decision making (Liu et al, 2013). When poor decisions are made, a company may crash from losses and subsequent effects. Loss of potential revenue is dangerous to a firm as it may not only collapse but also dissolve. Nonetheless, in businesses, a good decision is crucial in ensuring the continuity and survival of the firm in question. In a number of instances, the manager is mandated with the task to oversee every aspect f the operations involved in running the business. According to the case study above, the manager faces a huge decision ahead in a bid to save the company from total collapse. If the recommendations made are followed, the business may grow and increase the market share it holds.
As a management activity, decision making processes are the backbones of a business. This process makes up a vital part of any business all over the world. Even a supervisor in the lowest business units and levels must make decisions every day. Decisions involving the workforce bear more weight than any other company decision. Strategic decisions that aim at the long term like hiring or retrenching the workforce has the power to break or make a company. In this endeavor, the productivity of the firm may be impacted through loss of morale, loss of chemistry within the members of staff and retention of poor employees. Based on the analysis conducted, AMCOM Communications Limited should pursue the decision to retrench 50% of its workers. Even though this move is associated with financial, ethical, and legal consequences; it is more likely to become beneficial to the company in the long run. The following measures should be adopted during the retrenchment exercise
The SEU theory in Decision Making
The SEU theory’s development was a main achievement in terms of intellect within the first half of this century. For the very first time, it gave a maximized statement of what it meant for agents to act in a certain rational and consistent manner. This theory assumes that every decision maker possesses utility functions. In this theory, an objective or subjective probability distribution of effects is associated with every alternative. This theory opens a way to fuse subjective opinion with objective information an approach that applies in every type of business. The theory accounts for new information and the manner one should respond to incomplete data. In this model, the manager of a business is expected to liaise closely with all departments and employees. Therefore, implementation of the decisions and the evaluation of all alternatives yield the best probable outcomes for a business. In the role of a manger, workforce decisions need a good model for decision making. This is because such decisions affect the performance of the firm both in the short run and in the long term. Therefore as a manger, I would choose the SEU theory model for implementation of decisions in my firm (PETKOVA et al, 2014). This is because of the rationality and consciousness involved when coming up with the firm decisions.
Conclusion
The quality of decision making is critical to an organization. Decisions made not only affect the results but also the overall image of the firm in the long run. Good decisions are essential in order to minimize operational costs and promote responsiveness from employees, recognize, train, and motivate the remaining staff members, improvement on the level of product quality and service provision and an increase in the utilization of the strong resource factors from the company. Additionally, Decisions such as beginning programs on customer loyalty and coming up with employee cutbacks need a rational process of decision making. When poor decisions are made, a company may crash from losses and subsequent effects. Loss of potential revenue is dangerous to a firm as it may not only collapse but also dissolve. The SEU theory model is essential in making day to day decisions in the firm due to the process it includes in the criteria for decision making. This paper recommends that the model be used in companies for effective processes in decision making.
Reference List
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