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Golspie High School

Business Management

Higher

Understanding Business

8 Decision Making

Decision Making 15 September 2015 2

Learners should be aware of:

strategic, tactical and operational decisions

the role of a manager in making decisions

SWOT analysis and its use as a decision making tool

factors which affect quality decisions

Types of decisions:

Strategic Tactical Operational

Long term decisions (5-10

years)

Medium term (6 months –

5 years)

Short term

Shaping the main

objectives of the

organisation – they don’t

go into great detail about

how these decisions will be

achieved

Are taken to help achieve

strategic decisions –

contain the details of how

a strategic decision will be

achieved

Day-to-day/Routine

decisions

Taken by directors/senior

managers

Made by senior and

middle managers/heads of

department

Made by all staff including

lower level managers, eg

to order supplies

Carry high levels of

financial risk – very difficult

and expensive to reverse

Carry less financial risk

than strategic decisions –

can be reversed but this is

time-consuming and

expensive

Low financial risk decision

– can be reversed easily

and with little or no cost

To expand into a foreign

country

To diversify into new

products

To merge with another

company

To increase market share

by 5%

Cut costs by finding

cheaper suppliers,

minimising overtime or

find ways to cut wages

Widen product range

Increase production by

building new premises

• Seek opportunities to sell

goods or services in

locations where they don’t

already

• Offer internet shopping

• Target new market

segments

• Training staff in new

products available

• Decisions on staff working

hours for next week


The role of a manager in making decisions

Organisations must make decisions to achieve objectives and to improve their

performance. These decisions are made by managers who have the authority to

make them. Decision making involves choosing the best option from a range of

options. Managers have various functions to carry out when making decisions.


Henri Fayol, a management theorist, identified what he called the functions of

management:

Plan Looking ahead, seeing potential opportunities or problems and devising

solutions, setting targets, and setting aims and strategies.

Organise Arranging the resources of the organisation to be there when people

need them and acquiring additional resources if required.

Commands This involves the issuing of instructions, motivating staff and displaying

leadership.

Co-ordinates Making sure everyone is working towards the same goals, that all the

work being done fits together, and people are not duplicating work or

working against each other.

Controls Looks at what is being done, checks it against what was expected, and

makes any necessary adjustments. This is the monitoring and evaluating

role of management. Modern managers are likely also to include:

Delegates Gives subordinates the authority to carry out tasks. This helps with

motivation and reduces the manager's workload. The overall

responsibility will still lie with the manager who delegated the authority.

Motivates Rather than simply telling workers to work harder, which is not likely to

be successful, you encourage them by helping to them enjoy their tasks

through team-working, participation in decision making, and by giving

them some powers.

People who are in management positions have a very important role to perform in

the organisation and will have been selected based on the skills and qualities that

they have. Managers must be able to work well with other people, review and

assess different situations and, where necessary, make decisions to ensure the

organisation meets its objectives.

Impact of managers

When employees are motivated and perform well, a great deal of this can be

attributed to positive relationships with managers/supervisors. Successful managers:

communicate effectively with staff

give appropriate guidance and encouragement

arrange necessary training and development

encourage employee participation in decision making.


SWOT analysis and its use as a decision making

tool

SWOT Analysis is a simple yet effective tool for helping to develop alternative

strategies. It is a systematic and disciplined approach which assists organisations to

predict and plan for the future rather than sit back and wait to react to changing

circumstances.

SWOT is short for:

STRENGTHS

What is the organisation doing well?

WEAKNESSES

What is the organisation not doing so

well?

OPPORTUNITIES

Where are there opportunities for the

organisation to improve its

performance and profitability?

THREATS

What factors are outwith the

organisation’s control that may impact

upon its activities?

Strengths and weaknesses are concerned with the organisation and its current

position; opportunities and threats are concerned with the external environment and

the impact it may have on the future of the organisation. An organisation wants to

build on its strengths, improve its weaknesses, take advantage of opportunities and

minimise the impact of threats.

SWOT analysis should not be seen as a one off exercise. It should be part of the

continuing process of evaluating how the organisation is doing now and what it

should be doing in the future.


STRENGTHS

The following questions should be

considered:

What advantages do you have?

What do you do well?

What relevant resources do you have

access to?

What do other people see as your

strengths?

Examples:

exceptional customer goodwill

brand loyalty

efficient technical staff

adequate financial resources

enthusiastic sales force

Strengths are the foundations on which

continued success can be built.

WEAKNESSES

These must be honestly investigated and

faced. They are negative influences on

success and growth and remedies need to

be sought to overcome them:

What could you improve?

What do you do badly?

What should you avoid?

Examples:

obsolete machinery

no provision for senior management

succession

inadequate research and development

resulting in lack of new products to

succeed present production lines

If finance is a strength then the above

problems could be sorted out. However,

if finance is also a weakness then it would

first have to be sorted out as a priority.

OPPORTUNITIES

When an opportunity does arise it is

important that it is taken up:

Where are the good opportunities facing

you?

What are the interesting trends you are

aware of?

Examples:

a new market opening up which can be

filled from already existing resources

Management must always be able to take

opportunities which coincide with the

main objectives of the firm.

THREATS

These need to be recognised and dealt

with:

What obstacles do you face?

What is your competition doing?

Are the required specifications for your

job, products or services changing?

Is changing technology threatening your

position?

Do you have bad debt or cash-fow

weaknesses?

Examples:

changing technology

economic and political uncertainty

loss of existing client group

price competition

To discover the opportunities and threats faced by the organisation a PESTEC analysis

can be done.


Drawing conclusions from SWOT analysis

The purpose of SWOT analysis is to help make decisions. These involve mainly what

needs to be done now and what is likely to happen in the future. The conclusions will

be the basis for the future of the organisation so it is important that the SWOT is

correctly interpreted.

The strengths will identify areas where the business is doing well at this present time,

and where possibilities for the future exist. For example, having new products in the

development stages ready for launch will provide a very good platform for the

business to progress.

The weaknesses will highlight the areas where attention needs to be paid now in

order to ensure survival. For example, having a high level of borrowing will make the

business vulnerable to changes in the economy. As part of the strategic plan steps

should be taken to reduce borrowing.

Opportunities have to be carefully measured to make sure that the business makes the

best of them. These opportunities could come about from any of the factors

mentioned in the PEST analysis. To take advantage of these opportunities the business

must include them in their strategic planning.

As with opportunities, threats come from the political, economic, socio-cultural,

technological, and competitive forces. It is necessary for the business to take action to

deal with these threats to ensure survival.

The SWOT analysis should not be thought of as a one-off process. Evaluation of the

conclusions drawn should take place to ensure that decisions were pertinent. Carrying

out another SWOT analysis will allow the business to see if their conclusions were

correct.


Decision Making Models

There is a number of tried and trusted ways of helping managers come to generate

new ideas, to co-operate and finally to arrive at what is hoped to be the best

decisions.

SWOT Analysis

As discussed above.

Brainstorming

Brainstorming is when a group meet to try to come up with as many alternative

solutions as possible in a short period of time.

Each member of the group comes up with as many ideas as they can, no matter how

extreme they might appear.

All the ideas are written down as they are suggested.

Once every one has finished, the group work their way through each of the ideas in

turn discussing the possibilities contained in each to identify feasible solutions. This

way they can often come up with the most creative ideas because it encourages every

one to participate in an informal setting without the members of the group feeling

that they are in some way being judged.

Benchmarking

This involves comparing what you do with what the very best organisations do. You

could for example look at what the market leader does and then try to copy them. In

this case the market leader is the 'benchmark' or ideal standard that you want to

achieve. Benchmarking is used widely in operations to ensure quality. However, it is

equally valid as a method to aid decision making in any of the organisation's

functional areas.

PESTEC Analysis

To discover the opportunities and threats faced by the organisation a PESTEC analysis

can be done, as discussed in the last unit (Exernal Factors).

Benefits of using DM Models

No rash or hasty decisions are made, as time is taken to go through the decision

making process

Better quality decisions are made, as decisions are based on gathered relevant

information

Opportunity to explore alternatives

May enhance innovation, motivation and responsiveness by allowing employees

to be involved in the decision making process.


Constraints of using DM Models

• Time consuming, may slow the decision making process

• Limited information available

• Problems of generating and choosing between alternative solutions

• Internal constraints: finance, policy, staff attitudes or resistance

• External constraints: legislation, competitors, lack of technology

• Stifles creativity

Factors which affect quality decisions

Factors affecting quality decisions

There are many factors that will affect the quality of a decision:

• The ability and skill of the manager - if the manager has not had proper training

or not skilled enough to make decisions then a poor decision may be made.

• The appropriate use of decision making models - if the SWOT analysis has been

misunderstood the decisions taken as a result will bot benefit the business.

• The quality of the information used to make the decision - if out-of-date or based

information is used the outcome will be flawed.

• The level of risk taken - the more high risk the better the information must be.

• The managers own interests - are the managers more interested in Management

by Objectives or business growth?

• Motivation of staff to properly implement the decision

• The finance available to implement the decision.

• The time available to make the decision.

Internal problems that can exist when managers try to make effective decisions:

Finance may be restricted which might mean the organisation cannot afford to

implement the best decision.

Staff may not agree with the decision and resist the change making it less effective.

The organisation may have policies in place that are restrictive and the decisions

may need to be altered to suit policies.

The decision may be constrained by the lack of technology and mean that new

technology needs to be purchased or decisions shelved.

Managers may not have the appropriate skills or initiative to make the best

decisions and may be unable to cope with complex decisions or situations, may fail

to consult or be indecisive resulting in a poor decision being made

The quality of information may not be good enough

Managers may be wary of taking decision with certain levels of risk willing


Evaluation of Decisions

An important part of decision making is finding out how well your decision making

worked. This is called evaluation.

• Were the objectives of the decision met?

• What happened that was not expected?

If things did not go to plan then some changes may be needed. All decisions may not

be successful for a number of reasons. They could be due to internal factors such as

poor employee relations, or external factors such as changes in the economy. It is

important that managers evaluate their decisions and make adjustments if necessary.

Quality decision making depends on checking at all stages, so any necessary changes

can be made and the organisation can best meet its objectives.

Assessing the effectiveness of a decision:

• Evaluate the decision with their staff to gain their views on the change and if it

has been successful

• Issue questionnaires to customers to evaluate their response

• Have sales increased? If sales have increased then it could be assumed the decision

was successful

• Have profits risen?

• Has the situation improved?

• Has absenteeism reduced amongst staff?

• Has staff morale improved?


Past Paper Questions

Question 1

(Source: 2012 SQA Section 1 Question 1)

Identify the problems faced by Peter Scott & Co. You should use the following

headings. (Please identify problems only, solutions will not be credited.)

• Marketing

• Finance

• Operations

• External Factors 10

Question 2


Describe the 3 main types of decision that an organisation could make. 3

Question 3


(a) Distinguish between a strategic decision and a tactical decision. 3

(c) Describe the role of a manager in staff appraisal. 5

Question 4

(Source: 2011 SQA Section 2 Question 1e)

(i) Explain the effects that 3 political factors could have on an organisation. (A

different effect should be explained each time.) 3

(ii) Describe 4 external factors (other than political) that could have an impact

on an organisation. 4

Question 5

(Source: 2011 SQA Section 2 Question 4b)

Explain internal problems that can exist when managers try to make effective decisions. 5

Question 6


Describe the factors that would result in a quality decision being made. 4


Question 7


Explain the reasons why some organisations produce a mission statement. 3

Question 8

(Source: 2010 SQA Section 2 Question 5a)

(i) A manager decides to grant a worker’s request to have a week’s holiday.

Identify and justify this type of decision. 2

(ii) Describe 2 other types of decisions and give an example of each. 4

Question 9


(a) Describe how a manager could assess the effectiveness of a decision. 4

(b) Explain the factors that could affect the quality of a decision made by a

manager. 4

Question 10

(Source: 2009 SQA Section 2e)

Justify why strategic decisions are made by senior managers. 3

Question 11


Lees’ Board of Directors has identified growth as a strategic objective.

(a) Explain internal factors which could be taken into account prior to an

organisation setting strategic objectives. 4

(b) Describe 3 tactical decisions that could lead to growth. 3

Question 12

(Source: 2007 SQA Section 1 Question 4b)

The local council are trying to attract tourists to Oban with worldwide marketing of the

area. They will need to consider many external factors that could influence the industry.

Describe external factors that could influence the effectiveness of a marketing campaign. 6


Question 13

(Source: 2007 SQA Section 2 Question 2bi)

Public sector organisations are owned and controlled by Central Government.

Describe 2 strategic objectives of a public sector organisation. 2

Question 14

(Source: 2007 SQA Section 2 Question 4a)

Describe internal constraints that can make decision making difficult. 6

Question 15

(Source: 2006 SQA Section 2 Question 3aii)

(ii) Describe, using examples, the 3 types of decisions taken by organisations in

order to achieve their objectives. 6


Manager’s role in decision making

Management styles

Management style also has a major impact on the success of a business and the

motivation of its employees.

Definition Advantages Disadvantages

Autho

ritaria

n/auto

cratic

Manager controls all

of the decisions based

on his/her own ideas

and judgments with

no or little input from

others

The manager closely

controls the

employees.

This style of

management is suited

to the military

services.

Decisions can be made

quickly, eg in a crisis

Manager maintains

overall control

Change is

implemented quickly

Lack of two-way

communication is

demotivating

Employees cannot use

their initiative

Increase in staff

turnover and

absenteeism

Creates a ‘them and

us’ culture

‘Whatever a manager does, he does through making decisions. These decisions may be a matter of routine. Indeed he may not even realise he is making them. Or they may affect the future existence of the enterprise and require years of systematic analysis. But management is always a decision-making process.’

Peter F Drucker, The Practice of Management


Definition Advantages Disadvantages D

em

ocratic

Manager will consult

with lower-level

managers and/or

employees when

making decisions or

will delegate the

authority to make

decisions

Employees feel

empowered, which is

motivating

Better quality decisions

are made as there is

input from more than

one person

Increase in creativity

Lower staff turnover

and absenteeism

Increased productivity

as employees have

ownership

Can take longer to

reach a decision

Management control

is reduced

Risk that employees

will not have

adequate knowledge

or expertise to made

effective decisions

Time taken for

consultation could

result in deadlines not

being met

Lais

sez-fair

e

Managers have a

‘hands-off’ approach

and allow employees

to make decisions,

although the manager

will provide the

resources needed to

make decisions

This style of

management leads to

the lowest

productivity and

would not be suitable

to most workplaces,

except those where

creativity is important,

for example designers

If employees are

highly skilled and

capable of working on

their own this style of

leadership can be

motivational

Employees will feel

empowered knowing

that they can still

consult with managers

for advice when

making decisions

Employees may lack

the knowledge and

experience to make

good-quality decisions

Employees may be

unable to meet

deadlines and solve

problems without

guidance and direction

from their manager

Risk that deadlines

will be missed as staff

have more freedom


Corporate Culture

The style of management will also contribute towards the corporate culture.

Corporate culture is the beliefs and behaviours which managers and employees adopt

to enable the business to achieve its aims. Usually it is not specifically defined but

develops organically over time and become the unwritten rules and values of the

business.

The culture will be reflected in every aspect of the business, for example dress codes,

layout and décor of premises, symbols/logos, terms and conditions of employment,

employee incentives, eg employee of the month, and customer service.

The advantages of a strong corporate culture are:

employees feel part of the business

increased staff motivation

improved employee loyalty

increased productivity

improved employee relationships.

These advantages can reduce absenteeism and

staff turnover, and will help the company in terms

of customer loyalty and recruitment.


As we discussed earlier, external influences can be grouped under the headings:

Political, Economic, Socio-cultural, Technological, Environmental, Competitive.

Looking at these areas is also known as PEST analysis which organisations often carry

out in conjunction with the SWOT analysis, as it allows for a better view of the

business environment.

Political

The major source of potential threats or opportunities politically is when the

government decides to introduce new laws, or alter taxation rates. For example,

increases in the taxation on petrol are a threat to car sales, so manufacturers produce

cars with more fuel-efficient engines. The introduction of the minimum wage was seen

as a major threat to many small businesses. However, this did not result in the large-

scale unemployment that was predicted.

Economic

How the economy is performing has a major influence on the level of success of a

business. Those organisations which are very dependant on borrowing will find their

costs rising and falling with the interest rate, and so therefore will their profits. This

makes businesses less likely to borrow money for major projects when rates are high.

Interest rate also affect consumer spending. When rates are low consumers are much

more likely to borrow and spend money. This in turn creates more sales for business.

However, it is also true that when rates are high they will borrow and spend less,

decreasing the level of sales.

The exchange rate affects the prices of imported and exported goods. When the

pound is valued highly against other currencies the price of our imports becomes

cheaper. However, our exports then become much dearer for other countries making

them less attractive and reducing sales levels.

Also, during a recession people have less money to spend on luxury goods, so

manufacturers will produce cheaper alternatives until the economy comes out of

recession.

Socio-cultural

Organisations have to take account of changes in the tastes, lifestyles and attitudes of

consumers. Tastes in fashions change from season to season and from year to year, so

clothing manufactures have to ensure that their latest products meet the consumer

tastes. More women are working than ever before, and this has had two effects.

Firstly, women themselves have a far greater influence on what is bought within the

household.


Secondly, the lifestyles of working women were changed meaning less time to spend

on shopping and preparing food, looking after children, and daily household chores.

This led to the growth in a wide variety of family convenience foods and fast food

outlets, a growth in childcare facilities and nurseries, and a growth in small house

cleaning companies and ironing services.

Consumers are far more aware of social issues such as third world poverty, health

issues, and environmental concerns. Organisations have adapted their products, their

image, and their processes to take account of consumers concerns. For example, most

supermarkets will carry a range of organic produce, a range of fair trade goods, label

the contents of their products and offer recycling facilities.

Technological

The introduction of new technologies forces change on organisations. Mass

production techniques allow capital intensive automated processes which are more

efficient than labour intensive production. Producing 'Hi-tech' consumer goods such as

computers uses very sophisticated robotics. As new developments in computer

components are introduced, this requires new automated machinery. Firms have to

keep up to date to survive. As these new computers are introduced to some

businesses, other businesses will then need to update their systems.

Environmental

Environmental factors are not usually controllable by organisations. The weather is an

example that may have an impact of business. Localised flooding or rail delays due to

snow can delay or halt the production process as businesses fail to receive stock. 24

hour news cycles and Internet stories have made consumer much more aware of

environmental issues. Protest groups such as Green Peace attract much more coverage

than in the past.

Competitive

Probably the biggest concern for most businesses is (rightly or wrongly) the actions of

their competitors. Businesses look at how their product competes in terms of what it

can do, what it looks like, what price it is or what offers are being made and what

after sales service is available.


Summary Questions

TRUE FALSE

1 To maximise sales in the next 5 years is an example of a tactical

decision.

2 To merge with a competitor is an example of a tactical decision.

3 Arranging work rotas is an example of an operational decision.

4 Strengths and weaknesses are external to the business.

5 The Role of the manager is to plan, organise and communicate.

6 Brainstorming is a suitable aid to decision making.

7 Conducting an appraisal is the managers job.

Complete the sentences using one from the following types of decision making:

A(a) tactical A(a) strategic An(an) operational

Q8: ____________________ decision is made by middle managers whereas

____________________ decision can be made by anyone in the organisation normally

lower level managers.

Q9: ____________________ decision is made daily or short term whereas

____________________ decision is a medium term decision.

Q10: ____________________ decision carries a medium amount of financial risk but

____________________ decision carries virtually no financial risk.

Q11: ____________________ decision is made to help the smooth running on a daily

basis whereas ____________________ decision is made to help implement the strategic

objectives.

Q12: A business deciding to extend weekend opening hours is an example of

____________________ decision making.


Q13: Use following meanings to match with internal constraints that make the

decision making difficult.

• Meaning implementing decisions may be difficult.

• Meaning the organisation cannot afford to implement the decision.

• Meaning that new technology needs to be purchased or decisions shelved.

• Meaning a recruitment drive may be necessary.

• Meaning a staff training programme may be necessary.

• Meaning a simpler solution may need to be found.

Managers may be unable to cope with

complex decisions.

Staff skills may make the decision difficult

to implement.

Finance may be restricted.

The decision may be constrained by the

lack of technology.

Staffing levels may be too low for the

suggested solution to be used.

Staff may be resistant to change.

TRUE FALSE

14 SWOT analysis is an example of structured decision making.

15 PEST analysis involves looking at the external factors that

influence the organisation.

16 SWOT analysis is not often used by organisations as it results

in poor decisions.

17 SWOT analysis stands for strengths, weaknesses, opportunities

and threats.

18 The use of PEST and SWOT analysis always guarantees that

the right decision will be made.

19 Opportunities and Threats are external to the organisation.

20 Strengths and Weaknesses are external to the organisation.


Here’s a couple of links that I thought you might find useful for use with Business Management pupils – useful for SWOT analysis. http://www.slideshare.net/khamarudheent/starbucks-coffee-32533485?qid=54b7529e-6cd8-4b43-9c82-2f6853785645&v=default&b=&from_search=1

What does a Manager do? A manager makes decisions – i.e. decides what to do when given a choice. He/she also: Plans (looks ahead and sets aims and strategies) Organises (ensures resources are in the right place at the right time) Commands (tells others what their responsibilities are) Coordinates (ensures resources are used to achieve overall aims) Controls (measures, evaluates and corrects work relative to plans) Delegates (gives responsibility for actions/decisions to others) Motivates (encourages others to work effectively). What Qualities or Skills make a “Good” Manager? Communication skills Leadership skills Good judgement Initiative Organisational skills Motivation and motivational skills Planning skills Innovation Personal energy Interpersonal skills Maturity Numeracy skills Adaptability Stress-handling Assertiveness.

Decision-Making What is meant by Decision-Making? Decision-making involves making a choice between alternatives in order to get you from where you are to where you want to be. Types of Decisions Strategic/policy (long-term decisions that establish aims) Tactical/management (short-term objectives to realise aims) Operational/administrative (day-to-day decisions to realise aims). Types of Decision-Makers

http://www.slideshare.net/khamarudheent/starbucks-coffee-32533485?qid=54b7529e-6cd8-4b43-9c82-2f6853785645&v=default&b=&from_search=1

http://www.slideshare.net/khamarudheent/starbucks-coffee-32533485?qid=54b7529e-6cd8-4b43-9c82-2f6853785645&v=default&b=&from_search=1


Strategic – owners or senior management team Tactical – senior management or divisional directors Operational – section managers and/or workers. Higher Still

Notes Higher Business Management Notes Unit 1 – Business Enterprise Page 2 www.hsn.uk.net HSN81300

Who Needs to Know About Decisions? Owners Managers (to ensure they are carried out) Employees (to show relevance and ensure motivation) Customers (for information which may affect their buying). Mission Statements Mission statements are used to communicate decisions to many parties. They usually contain long-term strategic decisions, reflected as a broad statement of an organisation’s aims. Why is Decision-Making Important or Necessary? To address the dynamic pressures upon businesses To allow changing objectives to be realised To prevent problems arising from unaddressed pressures To allow management to fulfil their role effectively To provide a framework to direct an organisation To allow evaluation and changed performance (if required) Effective Decision-Making using the Structured Decision-Making Model Most organisations use a decision-making model to structure and organise their decisionmaking. The structure of the commonly used “PO(C)GADSCIE” model can be seen below. Identify the problem Identify the objectives Some models include identification of constraints Gather information Analyse information Devise alternatives Select one solution from the alternatives Communicate the decision Implement the decision Evaluate the effectiveness of the decision. Other Decision-Making Models


Decision trees Linear programming Critical path analysis. Why is Evaluation of Decisions a Particularly Important Step in Structured Decision- Making? Evaluation of the success of a decision made can be performed through: Market research Comparison of accounts Comparison of budgets Comparison of sales figures Comparison of market share Comparison of employee turnover Comparison of absenteeism Comparison of quality standards. Higher Still

Notes Higher Business Management Notes Unit 1 – Business Enterprise Page 3 www.hsn.uk.net HSN81300

Evaluation is particularly important in effective decision-making to ensure that: The decision has had the desired effect The decision was therefore a “good” one Such good decision-making practice is identified Any decision-making problems are identified Problems are stopped and corrected Good/bad practice is used to improve other decisions. Benefits of a Structured Decision-Making Process Time is taken to ensure that no snap decisions are made Time is taken to fully assess alternative solutions Innovation is enhanced due to alternative solutions being devised The quality of information and therefore decisions will be good. Problems Associated with the Structured Decision-Making Process The length of time required for effective use may be too long. It is expensive and time-consuming to collect the information required. ICT and information “overload” There are internal and external constraints on alternatives There is a lack of creativity due to effort and cost. Aids to the structured decision-making process ICT and software SWOT analysis (to show internal and external strengths and constraints) PEST analysis


Brainstorming sessions. What affects the quality of decisions made? There are many decision-making constraints that will limit the decisions that can be made, and therefore the quality of these decisions. These constraints can be classified as follows: Internal constraints Availability of resources (e.g. ICT, time, money, sources of information) Existing policies and practices The quality of internal information available and used The quantity of internal information available and used Training or expertise of the decision-makers The “human” element. External constraints The quality of external information available and used The quantity of external information available and used Government and EC legislation The behaviour of competitors The economic environment that the business is currently involved in. Reasons organisations produce a mission statement:

Could be released to the press which would help market the business and its

products

Issued to all employees allowing them to see the firm’s aims and objectives linked

to their roles as employees

Shows the organisation’s plans for the future and therefore how the customers

will be treated/affected

Will detail social responsibilities of the organisation which may attract customers

to the organisation

Could be used to attract quality staff who would agree with the information

contained in the mission statement

• Improve the image of the organisation which could increase sales

Describe the role of a manager in staff appraisal:

Plan out the timing and purpose of the appraisal interview in advance to ensure

the employee is fully aware of the purpose.

Organise a suitable venue and time.

Control the meeting to allow the employee to have an input into the appraisal.

Command − may have to tell the employee that the meeting is taking place if

they are unhappy with the appraisal and against it.

Co-ordinate the appraisal meetings before and after to ensure appropriate

feedback is given.


Delegate some meetings − peer to peer appraisal − or junior managers for

experience.

Motivate the staff with suggestions during the appraisal and give praise for any

appropriate work they have carried out and targets met.

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