Swift Connect Ltd Observation Review - Case Study Example

Observation Review Student’s Name: Instructor’s Name: Course Code: Date of Submission: Observation Review 1.0 The Decision Swift connect Ltd is a small firm in Brisbane with 9 employees. The head of production department is tasked with the duty of not only ensuring quality and production of captivating advertisement, but also making decision on how to produce advertisements that are captivating and competitive based on the overall business strategy of cost leadership. Based on this overall mission, the strategy that is devised by head of production department and the general manager is to be an advertising agency specialising in the creation and production of television commercials of usually 15 to 30 seconds duration. This would take two weeks for the advertisement to be availed to the client. Thus, the firm was known for offering its clients simple commercials, at a low cost and with short production times instead of more sophisticated, innovative commercials specifically tailored to client’s requirements. The aspect of low cost meant that the organisation rarely produced more than two revisions even if the customer is satisfied or not , partly because the commercials were usually very simple, and relatively short, but also because Swift connect charged clients for any revisions after the second version. Since the clients are traditionally budget conscious, they hardly requested more than two revisions. This is contrary to other advertising agencies which often accommodated several revisions, but charged higher amount as compared to Swift Connect Ltd. However, with time, Swift Connect started losing business. After thorough investigation, it was established that small business that used to be the principal customers of the company had expanded and thus, required complex adverts as opposed to simple ones. Apart from this, online advertising has tremendously grown and thus, offers lower advertising cost as compared to Swift Connect. This implies the lower budget companies are shifting away from the company. 2.0 The Decision in the Context of Bounded Rationality According to Hodgkinson and Starbuck (2008, p.457), in the context of bounded rationality, rational human beings are conceptualised as being goal driven. In this context, it is assumed that people make decisions so as to attain certain goals and objectives by evaluating various alternatives and choosing the most viable course of action. Jones (1999, p. 297) notes in this context, the decision makers are goal oriented. The decision made by the head of production department and the general manager of focusing on short ads can be explained in the context of bounded rational from two perspectives. They being rational and objective driven and they not being goal oriented. This can be best explained through optimising strategy. Tarter and Hoy (1998, p.212) provides six sequential steps that should be followed in optimising strategy. These include problem identification, problem diagnosis, alternative course of action evaluation, interrogation of possible impacts, picking the right alternative and implementation of the chosen strategy. In the first perspective, it clearly evident that the two were goal oriented in their decision. Apart from this, they displayed high understanding of economic theories of choice by deciding to be utilitarian. First, to arrive at the strategy of focusing on small firms and short adverts, they had analysed the existing competitive environment and chose the correct path. This is because in the short run it served the organisation well. For instance, in the earlier phases, the business was flourishing because the market segment the firm targeted proved to be a lucrative one. Moreover, the customers were satisfied with these simple ads as they are what they could afford. This kind of thinking and decision made by the two officers is anchored from the approach that a company gain market leadership through understanding the needs of consumers and executing strategies that generate superior quality, value and service (Moorman & Rust, 1999 p.180). The basis of saying they were goal oriented can be explained through non-consequentialism theories like utilitarian approach (Sunita, 2005, p.112). In this context, they managed to gain satisfaction albeit in short term basis. However, the challenge is that theirs was a short term, but in a normative point of view a strategic position should target long term. Contextualising this observation with Tarter and Hoy (1998, p.212) observation, it is evident that the production manager and the general manager conducted the first two steps (problem identification and problem diagnosis). However, from the problems that afflicted the organisation, it seems they ignored the immediate two steps (define alternatives and outlines possible consequence) and went straight to the two last ones (decision making and implementation). The rationale behind this argument is tied to the fact that had they developed various alternatives, when the business was declining they would have had alternatives as informed by possible consequences. To substantiate this view, Hodgkinson and Starbuck (2008, p.457) indicates that a rational approach to decision making involves having sets of alternatives. Such options allow individuals to formulate possibilities which can be analysed based on individual preferences. In a nutshell, it is these traits that were missing in the decision made. If the decision made were done within the context of bounded rationality, there would have been a fall back plan. However, since they didn’t consider various variabilities, their decision is not a rational one. Thus, this decision can be best explained from the context of muddling through or incremental reasoning rather than bounded rationality. Under the context of incremental reasoning, Tarter and Hoy (1998, p.215) notes that when possibilities are unclear people make small changes depending on the situation. This non guided judgment does not offer fixed goals, but one with shifting goal post. The reason behind this argument is based on the fact that the initial decision does not meet the expectations of optimising strategy (bounded rationality). Nevertheless, it highly displays intuitive mode of reasoning and decision making. Intuitive approach to decision making is based on a more subjective criteria (Gustafsson, 2006, p. 21). This is because intuitive approach to decision making involves a combination of judgements, intuition, tacit knowledge acquired over time, as well as heuristics which are approximate and simple rules in decision making. Reflection: What I would have done differently Hebert Simon (1993 cited in Tarter and Hoy, 1997, p.213) notes that “decisions are rational if they are appropriate to the accomplishment of specific objectives”. Rational decision making is viewed by Robbins and his colleagues (2009, p.124) as an economist approach to the process of decision making. This is due to the fact that the decision maker begins by deciding on the objective of the process which then follows a predetermined sequence. The best option if I would have been the one making the decision would be to follow the 7 step decision making approach. from the analysis, it is evident, that the production manager and the general manager followed the first two step sonly. In this approach, Swansburg (1996, p. 278) orders the steps systematically as follows: ‘identify a problem or opportunity, gather information, analyse the situation, develop options, evaluate options, select a preferred alternative and lastly, act on the decision’. The first step in this series of steps that I would make in the marketing strategy formulation is the identification of an opportunity or a problem. In this stage, I inquire whether there is an opportunity or a problem and whether or not the opportunity or problem is worthwhile. In this context, the problem is identification of appropriate market segment and the product to offer. This kind of approach to decision making is suitable in situations where decision makers have to make relatively complex decision. Secondly, as the production managers I would have gathered relevant information to the decision to be made on segmentation. Thirdly, I would have analysed the situation at hand that is the market opportunities in both low end and high end segments. At this point, I would have evaluated alternative courses of action which may be available to the firm and the different interpretation of data at my disposal by generating expected values for investing in different market segments. In the fourth stage, I would have generated a number of possible and viable options through being positive and highly creative. In the specific example above, as a production manager, I’ll have three viable options. These include: increasing focusing on short ads for low end customers, but with enhanced capability, focusing on high end market with complex ads at a higher cost and lastly, having a mixture of the two. In the fifth, I would have evaluated the generated alternatives or options. In this context I would explore the desirability, acceptability and feasibility so as to determine which of the options or the alternatives above will best enhance the achievement of the objectives. In the sixth stage, I would have selected the preferred alternative or option. Lastly, a plan must be put in place in order to implement the decision and resources are allocated for implementation. In this context, I would examine the level of support of the decision by colleagues and determines whether or not they are committed to the success of the decision. References Gustafsson, V 2006, Entrepreneurial Decision making: Individual, Tasks and Cognitions, Cheltenham, Edward Elgar Publishing Limited. Hodgkinson, G. P. & Starbuck, W 2008, The Oxford handbook of Organizational Decision Making, Oxford, Oxford University Press. Jones, B 1999, Bounded Rationality, Annual Review of Political Science, 2, p. 297-321. Moorman, C. & Rust, T. R 1999, The Role of Marketing. Journal of Marketing Vol. 63, No. 4, pp. 180-197. Robbins, S. P. et al. 2009, Organizational Behaviour: Global and Southern African Perspectives, Cape Town, Pearson Education South Africa (Pty) Ltd. Sunita 2005, Politics, Ethics and Social Responsibility of Business, New Delhi, Paragon Books. Swansburg, R 1996, Management and leadership for Nurse Managers, Sudburry, Jones and Bartlett publishers, LLC. Tarter, C .J. & Hoy, W. K. 1998, Toward a contingency theory of decision making, Journal of Educational Administration, Vol. 36, No. 3, pp.212-228. Read More