6 Steps to Decision-Making Process - Assignment Example

1. Identify and describe each of the six steps you should navigate through when making a decision. Describe a situation in which you personally ignored the first step in the six-step process. What were the consequences of you ignoring the first step? The six steps of the decision making process are define the problem, develop alternatives, evaluate alternatives, make decision, implement solution, and monitor your solution (Buzzle). Last summer I made a decision without considering the first step. The consequence was that it took longer to complete the decision making process because by not identifying the problem properly I came up with some solutions that did not solve the issue. 2. Give an example of a poor decision that you made because of a decision shortcut or bias. What did you learn as a result of this poor decision? In hindsight what steps could you have taken that would have ensured a more positive outcome for this situation? Last year at school I was given a chance to choose a team. I made the poor decision of not considering two cheerleaders to be a part of my team because of bias. The teams composed of these cheerleaders received the only two A the professor gave. In the future I will not prejudge people. 3. You are currently working with a group of your classmates on a team project where you have been asked to research an Indiana-based, public company: a) Briefly describe the key stages of your team’s development. The stages of team development are forming, storming, norming, performing, and adjourning. During the forming stage people get to know each other. In the storming stage the group deals with tensions and defines group tasks. The norming stage has the teammates working together and building relationships. In the performing stage there is maturation in relationships and task performance. Adjourning involves disbanding and celebrating accomplishments (Schermerhorn & Hunt & Osborn). b) What is the difference in managing vs. leading when it comes to teamwork? Which did you find more effective and why? Managing and leading are two distinct concepts when it comes to teamwork. When a person is managing in a team the person gives orders to others on what to do. Leading involves guiding the team in the right path. c) What are some characteristics of an effective team? What steps can you take to ensure your team will receive the desired outcome of an “A” on the research paper? Some of the characteristics of an effective team are good communication, existence of teamwork, delivering tasks on time, and performance. To have a better chance to receive an A on a research paper the team must perform good research and dissect information properly. d) What is ‘Groupthink” How can it impede your team and keep you from the end goal of positive results? Groupthink is the tendency of cohesive group members to lose their critical evaluative capabilities (Schermerhorn, et al.). It can impede a team from accomplishing its goals by delaying the process. 4. What does the concept of ‘participation in decision making’ mean to you? What are the key features of the concept? Participating in the decision making process means to use the input from the entire team prior to making a decision. A key feature of this concept is collaboration between the teammates. 5. Do you agree with the statement, “Group decision making is usually superior to individual decision making?” Why or why not? I do not agree that group decision is better than individual decision making. One of the cons of group decision is that it takes longer for a group to reach a decision than an individual. 6. How is the decision-making risk affected by having or not having intelligent information? Compare and contrast data, information, and intelligence in the context of decision-making. Not having intelligent information affects the process adversely and can lead to making bad decisions. Using information from credited sources such as Plunkett Research, Dun & Bradstreet, and peer reviewed journals can help the decision making process. 7. Why is it important for a business firm to have its financial information collected, analyzed, and reported accurately? What regulations are in place that affects the accounting industry and the way businesses report financial information? It is important to have financial information collected, analyzed, and reported accurately to ensure accountability. A regulation that is in place that affects the accounting industry is the Sarbanes Oxley Act of 2002. 8. Provide an example of a corporation that ‘cooked their books.’ Why would they do this? What were the ramifications of their mistakes and questionable accounting practices? An example of a company that cooked the books was Enron Corporation. The reason that the executives of this company cooked the books was to gain massive bonuses and to inflate the value of its stock. The ramification of the action was that Enron file the largest bankruptcy in the United States at the time. 9. List four groups that use accounting information and briefly explain how each group uses the information. Lenders, employees, government and investors are four groups that use accounting information. Lenders use accounting information to determine whether to lend money to a company. Investors use this information to make or sell decisions in the stock market. Accounting information is used by the government for taxing purposes. Employees use accounting information to determine if the company can afford to give a raise or to evaluate if the company is financially sound. 10. What does GAAP stand for? What is the purpose of having GAAP in place? Identify and describe at least three underlying principles required by GAAP. GAAP stands for generally accepted accounting principles. The purpose of GAAP is to provide a framework for all accountants to follow. Three principles of GAAP are going concern, matching principle, and conservatism. Going concern assumes that an enterprise will continue in operations over the long run. The matching principle states that in every journal entry a debit will be matched by a credit. Conservatism says that when in doubt choose the method that will be least likely to overstate assets and income. 11. What are the various organizations that affect GAAP? How does each organization specifically affect GAAP? Two organizations that affect GAAP are the FASB and the AICPA. GAAP are created by the FASB. The AICPA created GAAP until 1973 when the FASB was created. 12. You are a CPA and you have been asked to audit a business that has applied for a loan. What financial statements will you need to examine in order to perform the audit? Please describe the purpose of each financial statement you will use and describe how you will use the information contained in it to perform your audit. For the audit I will examine the income statement, balance sheet and statement of cash flow. The income statement has information regarding revenues and expenses. The balance informs over assets, liabilities, and equity. Cash is the most liquid assets thus it has its own statement which provides information over operating, investing, and financing activities. 13. Besides the income statement, balance sheet, and statement of cash flows, what other information would you as a stockholder like to examine? Where would you find this information? Why is it smart to invest for your retirement? A piece of information to examine is the price of the common stocks of the company. That information is available on the internet at Yahoo Finance. It is smart to invest for retirement because social security alone will be sufficient to retirees to cover living expenses. 14. State the accounting equation and describe why it is important. List two specific examples of each term in the equation. The accounting equation states that assets equal liabilities plus stockholders equity. The balance sheet is an example of the usage of the accounting equation. In top of the balance total assets will equal the total at the bottom of the statement of liabilities plus stockholders equity. Cash and account receivables are examples of assets. Bank loans and account payables are two examples of liability. 15. As the private accountant for a medium-sized firm, what steps will you follow to transform raw data into financial statements? What key financial statements will be a result of your work? The step that I will follow to turn raw data into financial statements is the accounting cycle. The financial statements that are going to be prepared upon completion of the accounting cycle are income statement, balance sheet, statement of retained earnings and statement of cash flow. 16. The Zimmer Holdings 2006 annual report contains significant information regarding its background, business segments, financials, and trends. Please look over the annual report and answer the following questions. a) Company Profile: What do they do or what do they make? Zimmer is a worldwide leader in musculoskeletal health care. b) What is the fiscal year? The fiscal year of Zimmer is the natural year which starts December 1, 2006 and ends December 31, 2006. c) What financial statements are presented? The four major financial statements which are the income statement, balance sheet, statement of retained earnings and statement of cash flow are presented in the annual report. d) What are the basic earnings per share? The basic earnings per share of Zimmer in 2006 was $3.43. 17. For the year ending 2006: a) Was Zimmer more or less profitable in 2005? By how much? Zimmer was more profitable in 2006 than in 2005. In 2006 its net profit was $834.5 million which is higher than its 2005 result of $732.5 million. b) Did Zimmer have a net cash inflow or outflow? Zimmer had a cash inflow of $33.5 million 18. Who was Zimmer’s auditor? Were there any exceptions listed in the opinion? Please be specific. The auditor of Zimmer in 2006 was PricewaterhouseCoopers. The consolidated financial statements are presented fairly in all material respects. Works Cited Buzzle.com. 2014. “6 Steps to Decision-making process.” 25 March 2014. Schermerhorn, John, and James Hunt, and Richard Osborn. Organizational Behavior (8th ed.). New York: John Wiley & Sons. 2003. Print. Read More