Search

# Strategic Analysis and Decision Making - Essay Example

Summary
It is safe to say that decision making is one of the most significant if not the most essential of all individual and group efforts within an organization. Traditionally, theorists have looked at decision making as the multi-step process by which a problem is recognized, solution objectives are defined, a pre-decision is made (that is, a decision concerning how to make a decision), alternatives are generated and assessed, and an alternative is selected implemented, and then followed up…

## Extract of sample "Strategic Analysis and Decision Making"

Download file to see previous pages Such an ideal model of decision making also presumes that the decision maker is aware of all possible alternatives and that he or she decides subsequent to examining them all. A modern approach recognizes that decisions are made in an automatic, instinctive fashion. Specifically, image theory claims that people will take on a course of action that best fits their individual principles, current goals, and plans for the future.
The decisions made in organizations can be distinguished as programmed -- routine decisions made according to preexisting guidelines -- or non-programmed -- decisions requiring novel and ingenious solutions. Decisions also are different with respect to the amount of risk involved, ranging from those in which the decision outcomes are moderately certain to those in which outcomes are extremely uncertain. Uncertain situations are expressed as statements of prospect based on either objective or subjective information.
For the rational decision maker, the question is "What is the best answer" Rational decision analysis provides a precise method for choosing among alternatives based on their estimated values. The rational model requires the overt specification of the probabilities associated with choices and chances, as well as quantified payoffs for outcomes. For instance, consider the stock option decision tree given in figure 1.1.

Here, an investor is considering buying an option on a stock with a current price of \$100. The option itself has a price OP. There is a 50% chance that the stock's price will raise to \$110, and a 50% chance that the price will fall to \$95:

- Current Stock Price = \$100
- Option Price = OP
- With P = .5, S = \$110
- With P=.5, S = \$95
The investor has two alternatives: Do not purchase the option (choice I), or purchase the option (choice II). Given the above assumptions concerning probabilities and payoffs, rational decision theory gives an exact method for ranking the alternatives. We calculate the expected value of an alternative as the product of its possibility and its payoff value. For the stock option case, we arrive at the following expected values.
EV (I) = P (A) * V (A)
= 1.0 * 0
= 0
EV (II) = P (B) * V (B) + P(C) * V(C) - OP
= .5 * 10 + .5 * 0 - OP
= 5 - OP

The rational choice is to purchase the option if Option Price, OP, \$5.We note that this approach formalizes just one aspect of the decision task, that is, choosing among the alternatives. The pattern does not provide exact methods for identifying problems or alternatives, nor for estimating those alternatives. The rationalization that results from this process is always the same: The choice has the highest estimated value. The rational decision maker does not abandon the trouble even if all outcomes have negative expected values. In that case, the decision maker selects for the "best worst" case. The model does not address the matter of generating additional alternatives. Still, rational ...Download file to see next pagesRead More
Cite this document
• APA
• MLA
• CHICAGO
(“Strategic Analysis and Decision Making Essay Example | Topics and Well Written Essays - 2750 words”, n.d.)
(Strategic Analysis and Decision Making Essay Example | Topics and Well Written Essays - 2750 Words)
https://studentshare.org/miscellaneous/1511626-strategic-analysis-and-decision-making.
“Strategic Analysis and Decision Making Essay Example | Topics and Well Written Essays - 2750 Words”, n.d. https://studentshare.org/miscellaneous/1511626-strategic-analysis-and-decision-making.
Click to create a comment or rate a document

## CHECK THESE SAMPLES OF Strategic Analysis and Decision Making

### Decision Making Self-Analysis

...? Decision Making Self-Analysis Insert Insert Grade Insert Decision-Making Models There are several decisionmaking models, which facilitate the comprehensive task of decision-making. Basically, models play a guiding role in the vast process through setting the platform for the various phases of decision making. In essence, decision making is a process through which several courses are evaluated in the consideration of the best way forward. Hence, at the tail end of the process a definite course of action is selected. There are various models but for the...
5 Pages(1250 words)Assignment

### Strategic Investment Decision Making

...) suggests that strategic investment decision making involves the process of identifying, evaluating, and selecting projects that are likely to have a big impact on a company's competitive advantage. Strategic investment decisions influence what the company is doing, that is, the set of products and services as well as their attributes that it offers to customers. These decisions also influence where the company offers these products and services and how it offers them. (Adler, 2000). It is therefore very essential to ensure that the right decision is made as regards the products and services on offer, where such products...
11 Pages(2750 words)Case Study

### Strategic Decision Making

...COMFORT HOMES - CASE STUDY Strategic Analysis and Choice Strategic decision making process is defined as either a content approach that necessarily identifies content in the strategy or a process which identifies strategic processes associated with the decision making process (Simon, 1993). Such strategic decision making involves not only implications but also independent and dependent factors that impact on the outcomes. Thus the new Chief Executive Officer's (CEO) decision to present himself in a prime-time TV interview is of strategic significance for a number of reasons. In the first instance Bamford's decision is based on the premise that with the death of the old CEO things are bound to change at Comfort Homes... in the...
10 Pages(2500 words)Case Study

### Compensation decision making analysis

...Chapter 10 Explain why an organization must relate to a variety of labor markets when conducting a compensation survey. In setting pay, it is important that it is competitive, meaning that pay must help the organization attract and keep the employees it needs. Because of this, the organization must determine which organizations hire similar employees to perform similar jobs. Usually there are organizations in several different labor markets which are competing with us for the same type of employee. Quite diverse organizations can have the need for the same type of employee with a specific skill set. If we also have a need for such an employee to fill a job, we cannot effectively set pay for that job unless we survey... 10 Explain why an...
2 Pages(500 words)Essay

### Strategic Decision Making (Team)

...Strategic Decision Making Future scenarios are very important for the forecasting of management activities to ensure they met the future needs of a sector or an industry and tackle its challenges. They stimulate systematic thinking that focuses on the future of the sector and help to identify the factors that shape the future of the industry. This paper presents four future scenarios for tertiary education in the function and context of learning society five years or so from now. The approach used to develop the future scenarios is the functionalist approach where scenarios are extracted from possibilities. The four provocative scenarios identified for tertiary education are traditional,...
3 Pages(750 words)Essay

### : Judicial Decision Making Analysis

...Judicial Decision Making Analysis In The Case Of Roe v. Wade (Complainant and Texas District Attorney The decision arose from a constitutional challenge to the Texas legislation banning all abortions except where the mothers’ life is clearly threatened. In 1973 the US Supreme Court decided by a majority that such a law was too broad and unjustifiably infringed on Roe’s Ninth and Fourteenth Amendment rights containing the Bill of Rights and the concept of liberty guaranteed, respectively. (US Supreme Court VIII) The Court ruled that while medical risks of late term abortions justified states...
1 Pages(250 words)Essay

### Strategic Planning & Decision Making (SWOT Analysis) PART ONE

...Strategic Planning & Decision Making (SWOT Analysis) PART ONE Strategic Planning & Decision Making (SWOT Analysis) PART ONE11 1. Sources: a) Kneer, C. (2009).The Wal-Mart Success Story. Munich: GRIN Verlag     b) Quality-Assurance-Solutions.com. (2013). SWOT Analysis of Wal Mart. Retrieved on 20 Jan 2012 fromanalysis-of-wal-mart.html>  c) MarketingTeacher.com. (2013). SWOT Analysis Wal-Mart. Retrieved on 20 Jan 2012 from   d) MBA lecutures. (2010). SWOT Analysis Wal-Mart. Retrieved on 20 Jan 2012 from analysis-marketing/1051/swot-analysis-of-wal-mart.html>  e) Wendel C. (2012... that it is a book, reviewed keenly by numerous scholars before being published; thus, it has an attribute of reliability and accuracy. The second source to be preferred is MBA lecutures (2010), since it belongs to a group of lectures who are...
1 Pages(250 words)Assignment

### Strategic Planning & Decision Making (SWOT Analysis) PART TWO

...shaped the company policies. This is because the company has focused on cost reduction in order to ensure price leadership (Kneer 2009). The company targets the medium income earners with an average annual income of \$35000. The company has also focused on implementing new technology as a way of keeping it ahead of its competitors and ensuing that it delivers quality products and services to its consumers. Wal-Mart SWOT Analysis Strengths One of the main strengths that Wal-Mart has is that they are able to offer a wide array of goods in one store. Moreover, because of its large scale of economies, the company is able to offer competitive prices which are highly discounted with make them offer the best...
5 Pages(1250 words)Assignment

### Strategic Decision Making

...Strategic Decision Making The contribution of scenario analysis to the front-end of new product development Summary of the article Postma, Broekhuizen, and Bosh (2012) have published an article named “The contribution of scenario analysis to the front-end of new development”. In this article the authors have addressed important challenges and difficulties that companies face while developing, introducing, and implementing product innovations. The process of new product development process can be divided into three stages: the front-end, the development, and commercialization (Postma, Broekhuizen, and Bosh, 2012: 642). The frond-end phase is recognized to...
12 Pages(3000 words)Assignment

### Strategic Decision Making

...prospective of the company has been assessed in this paper based on the current position of the company and structure of the industry. It highlights the prospective directions that the company can move based on its current infrastructure and the future scenario of the market. Table of Contents Introduction 4 Current operations 4 Market Scenario 6 Financials of Securetech 8 Existing strategy 10 Operational Activities 12 Analysis of competitive forces 15 PESTLE analysis 18 Prospective position in next 20 years 19 Reference List 22 Introduction The strategic analysis of a firm regarding its future position is depends on several factors. The future analysis...
22 Pages(5500 words)Assignment
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

## Let us find you another Essay on topic Strategic Analysis and Decision Making for FREE!

This Website is owned and operated by Studentshare Ltd (HE364715) , having its registered office at Aglantzias , 21, COMPLEX 21B, Floor 2, Flat/Office 1, Aglantzia , Cyprus.
• FAQ
• Blog
• New Essays
• Essays
• Miscellaneous