DECISION MAKING
Decision-making can be regarded as a problem-solving activity terminated by a solution deemed to be satisfactory. It is, therefore, a process which can be more or less rational or irrational irrational and and can be based on explicit knowledge or knowledge or tacit knowledge.
According to Lopez,
“A decision represents a udgment! a final resolution of a conflict of needs, means, or goals! and a commitment to action made in face of uncertainty, complexity, and even irrationality"
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Case-1 THE !"ST!ATED #LANT MANAGE!
#emant $ha, the plant manager of a manufacturing company, attended a seminar of four weeks duration, conducted by a reputed university. %he seminar was devoted largely to the topic of executive decision making. During the seminar, $ha was particularly impressed by &rofessor %ripathi's (ectures on )roup discussion * )roup decision making. &rofessor %ripathi was convinced that employee, if given the opportunities, could intelligently consider, and then formulate +uality decision. eturning to the plant at the conclusion of the seminar, $ha decided to practice some of the the prin princi cipl ples es that that he had had lear learne ned. d. #e call called ed toge togeth ther er the the empl employ oyee eess of his his department and told them that the production standard established several years ago were now too low in the view of the recent installation of automated e+uipment. #e wanted the employees to decide among themselves, as a group, what the new standard should be. $ha believed that employees would doubtlessly establish much higher standards than the existing ones. /ut he was ama0ed when he came to know that contrary to his belief, the 2
group considered the existing standards as already too high. And therefore decided to reduce them by 123. %hese standards, $ha knew, were far too low to provide a fair profit on the owner's investments. 4et it was cleared that his refusal to accept the group decision would be disastrous. /efore taking a course of action, $ha called professor %ripathi at the 5niversity for his 6pinion.
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S$%%ar&
%his case is about a plant manager of a manufacturing company, 7r. #emant $ha who attends a seminar for a month which was conducted by a reputed university. %he topic was based on “8xecutive Decision-7aking". 7r. #emant liked the topic of groupdecision and decision-making so much9 %hat he thought to apply the same formula with his employee of his department. #e wanted his employee to work as a group and execute the work with a innovative standards giving a new outlook towards work. /ut, unfortunately on contrary to his belief, the group considered the existing standard as too high and thus they want to reduce it by 123. %hese standards, $ha knew, were far too low to provide a fair profit on the owner's investment. And if he try to refuse the group's decision a huge disaster would occur so before taking any action he decides to revisit the university and asks them about an opinion to solve his problem.
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'(1 Ho) co$*d +a ae aoided te present di..ic$*ties/
7r. $ha may have avoided the present obstacles by assisting the employees to work in the existing standards without reducing it to 123. 7aking them reali0e about the company's investments loss so that they won't reduce and try to work like in previous method.
'(0 I. &o$ )ere a %anage%ent cons$*tant, )at adice )o$*d &o$ gie to +a/
If I were the management consultant I would have advised 7r. $ha to observe the employee's work standards and understand as to why they are not able to cope up with new innovative standards. :irst to identify the problem related to employee's paradigm towards work then only i can able to suggest them a new outlook which will satisfy them and of course 7r.$ha too.....
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Conc*$sion
;o here we conclude that at times the manager should even as an employee must understand the core value of the standards been given to employee. If the standards are too high a proper training should be given to them so that they'll be much active and dynamic to work on new standards without refusing it.. ather consulting directly to the third-party the manager must first recognise the problem then only he should seek advise regarding to his company.
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CASE -0 INTE!NATIONAL CASE CA!!EO"! 2 3HICH 3A4 TO GO/
arrefour, a firm that has hypermarkets, big stores offering a variety of goods. It has made large investments around the globe in (atin America and >hina. /ut not all is well as competitors taking market share it its home market, for instance. %here has been even speculation of a takeover by arrefour also had problems competing with %esco in ;lovakia and the >0ech epublic. In )erman, the company faced tough completion from Aldi and (idle@two successful discounters. 6n the other hand, it bought stores in &oland, Italy %urkey, and opened new stores in >hina, ;outh orea, and >olumbia, >arrefour has become more careful in selecting markets. %he company is eager to enter the Indian market but found in late 22B that
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In :rance, where >arrefour is well established, the company made the big mistake in its pricing policy. It probably started with the 1??? merger with &romodes CA :rench discount chain. >arrefour confused the :rench clientele by losing its low-cost image! whether the image can be changed remains to be seen. 7r. Duran, the new >86 since 22, embarked on the new strategy by offering 13 new products in its hypermarkets and 123 in its supermarkets. 7oreover, he wants to employ more staff, extend the operating hours in certain hypermarkets, cut prices, try small stores, and push down decision-making. 7r. Duran aims to stay only in countries where >arrefour is among the top retailers. '$estions
1. #ow should 7r. Duran assess the opportunities in various countries around the worldE . ;hould >arrefour adopt arrefour differentiate itself from
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S$%%ar&
%his case is all about >arrefour a :rench multinational retailer founded in $anuary 1, 1?H which is head+uartered in, :rance. It's a firm that has hypermarkets, big stores offering a variety of goods. It is one of the largest hypermarket chains in the world, the fourth largest retail group in the world in terms of revenue Cafter ostco, and the third in profit Cafter hina. %here has been a rumour of a takeover by arrefour. 7r. /arnard who was controlling the company for 1 years was expelled and was replaced by $ose (uis Duran, arrefour also had problems competing with %esco in ;lovakia and the >0ech epublic. In )erman, the company faced tough completion from Aldi and (idle@two successful discounter retail stores. 6n the other side, it bought stores in &oland, Italy %urkey, and opened new stores in >hina, ;outh orea, and >olumbia! >arrefour has become more alert in selecting markets. %he company is eager to enter the Indian market but found in late 22B that arrefour is well established in :rance, but the company made the big mistake in its pricing policy. It probably started with the 1??? merger with &romodes a former :rench group of retailers, one of its maor competitors in the :rench market. >arrefour confused the :rench customers by losing its low-cost image. 7r. Duran, the new >86 since 22, started on the new strategy by offering 13 new products in its hypermarkets and 123 in its supermarket. And he wants to employ more staff, extend the operating hours in certain hypermarkets, cut prices, try small stores, and push down decision-making. 7r. Duran targets to stay only in countries where >arrefour is among the top retailers.
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'(1 Ho) so$*d Mr( D$ran assess te opport$nities in ario$s co$ntries aro$nd te )or*d/5 7r. Duran should assess the opportunities in various countries by De.ining 6$siness p*an .or accessing g*o6a* %ar7ets International business plan is important in order to define your company=s present status and internal goals and commitment, but it=s also necessary if you plan to measure your results. Cond$ct %ar7et researc to identi.& &o$r pri%e target %ar7ets( 4ou want to find out where in the world your product will be in greatest demand. 7arket research is a powerful tool for exploring and identifying the fastest-growing, most penetrable market for your product. Searc o$t te data &o$ need to predict o) &o$r prod$ct )i** se** in a speci.ic geograpic *ocation &repare pricing and determine your landed costs /e ready to test out your price on your customer. ;ee what reaction you get and then negotiate from there. •
I%p*e%ent an e8traordinar& a.ter-sa*es serice p*an . %he relationship between your company and your overseas customer shouldn=t end when a sales is made. If anything, it should be ust the start of a long relationship which re+uires more of your attention. %he care and feeding of your customers will determine if they keep coming back for more.
7ake personal contact with your new targets, armed with culture-specific information and courtesies, professionalism and consistency 4our goal should be to enter a different culture, adapt to it and make it your own. Deter%ine o) %$c &o$ can a..ord to inest in &o$r internationa* e8pansion e..orts(
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'(0 So$*d Carre.o$r adopt 3a*-Mart9s strateg& o. :*o) prices eer&da&:/ 3at )o$*d 6e te adantage or disadantage o. s$c a strateg&/ In our view >arrefour adopting
(ow pricing results in higher revenues people tend to purchase more when low pricing
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strategies are executed. C8D(& everyday low prices strategies generally result in lower fixed costs, since they re+uire
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less advertising for promotional prices, less labour to execute price changes. Advertising is less expensive with an everyday low pricing approach because a retailer does not need to promote each individual sale item. >ompetitive advantage in the retail market competition and leads more and more competitors to imitate.
DISAD;ANTAGES •
Always being the lowest-priced supplier sometimes creates the perception that your product
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+uality is lower than that of the competition. ;ome consumers might assume that renovated products are the means by which you maintain your low prices. Juality-conscious customers may avoid stores with everyday low pricing strategies. Insufficient profit margin for discounting- If you struggle to have the lowest prices at all times, you may not have sufficient profit margin to offer further low prices for promotions or discounts.
'(< Ho) co$*d Carre.o$r di..erentiate itse*. .ro% 3a*-Mart/ 11
3a*-%art
Carre.o$r
%he second largest retailer in the world after arrefour had humble beginning in the summer of 1?B2
evolutioni0ed discount retailing, with the result that by 1?H?
It was an initial test of the on-stop shop formula whereconsumers could get almost all of their shopping needssatisfied at one location #roposition )as si%p*e Deliver a wide 1=>= array of merchandiseat discount prices 7ove into topped up by a friendly service /elgium, began its internationali0ation 1???K 7erger with &romodes :irst ity store in ogers, Arkansas
%he stores were located mostly in :rance but also throughout 8urope, Asia, and (atin America
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Invented “hypermarket concept" 5sually located within a commercial center
Discount >ity store concept consisted of servicing small andmiddle si0ed towns at prices e+ual to or lower than prices innearby cities
Location strateg& -&lace stores outside towns in areas where highways provided easyaccess and land could be ac+uired inexpensively
1=?0 /uild a warehouse that allowed him to buy largevolumes of merchandise at lower prices.
#igh degree of consumer acceptance -L fuelled >arrefour's growthstemmed
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;trategy of covering small towns, virtually #rod$ct strateg&ignored by other competitors, the expansion Any product a consumer could think of progressed rapidly without anysubstantive purchasing more than once a year could be direct competition until the mid 1?H2s. bought at >arrefour store
1==<. traditional outlets &enney, for which the established players were ill prepared
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'(@ Identi.& c$*t$res in se*ected co$ntries tat need to 6e considered in order to 6e s$ccess.$*/ )ermany and &oland both countries are successful with respect to their cultures. Ger%an&
>ultural awareness or cultural knowledge is becoming increasingly important in today=s global economy. )ermans place a high priority on structure, privacy and punctuality. %he )erman people embrace the values of economy, hard work and industriousness and there is great emphasis on making sure that the trains run on time. )ermans are stoic people who struggle for perfectionism and accuracy in all aspects of their lives. %hey do not admit faults, even okingly, and rarely hand out compliments. In many aspects )ermans can be considered the masters of planning. )ermans believe that maintain clear lines of demarcation between people, place and things is the surest way to lead a structured and ordered life. )ermany is heavily regulated and extremely bureaucratic. %hey prefer to get down to business and only engage in the briefest of small talk. %hey are detail-oriented and want to understand every statement before coming to an agreement. %hey do not need a personal relationship in order to do business.
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#o*and
&oland's strategic position in the heart of 8urope and its strong and still-growing economy has made it an attractive destination for foreign businesses. %he &olish population generally has a strong work ethic and is well educated, and business culture in &oland is not that different to what expats may experience in other 8uropean countries. /usiness culture in &oland is formal.
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CONCL"SION :rom this case we conclude that >arrefour is one of the biggest retailer company in :rance. %hey invest lot in market share and also earn large amount of profit. /ut they made one big mistake that is they adopting low price policy like 86 that is 7r. Duran, he decided to adopt new strategy and decide to offer 13 in hypermarket and 123 in supermarket. :or this he re+uires more man power e+uipment and working hour. #e also decides to do business in only those countries where >arrefour is or will bea success.
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ST!ATEGIC #LANNING
Strategic p*anning is an organi0ation=s process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy
Strategic p*anning is an organi0ation=s process of defining its strateg&, or direction, and making decisions on allocating its resources to pursue this strateg&. It may also extend to control mechanisms for guiding the implementation of the strateg&.
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CASE-< GOAL SETTING
/harat 8ngineering works (imited is a maor manufacturer of industrial machineries besides other engineering products.it has enoyed considerable market preference for its machineries because of limited competition in the field. 5sually there have been more orders than what the company could supply. #owever, the scenario changed +uickly because of the entry of two new competitors in the field with foreign technological collaboration. :or the first time, the company faced problem in marketing its products with usual profit margin. ;ensing the likely problem, the chief executive appointed 7r. Arvind umar as general manager to direct the operations of industrial machinery division. 7r. umar has similar assignment abroad before coming back to India. 7r. umar had a discussion with the chief executive about the nature of the problem being faced by the company so that he could fix up his priority. %he executive advised him to consult various heads of department to have first hand information. #owever, he emphasised that the company locked an integrated planning system while members of the board of Directors insisted on introducing this in several meetings both formally and informally. After oining as general manager, 7r.umar got briefings from the heads of all departments. #e asked all heads to identify maor problems and issues concerning them. %he marketing manager indicated that in order to achieve higher sales, he needed more sales support. ;ales people had no control organi0ation to provide sales support nor was 18
there a generous budget for demonstration teams which could be sent to customers to win business. %he production manager complained about the old machines and e+uipments used in manufacturing. %herefore, cost of production was high but without corresponding +uality.
Discussion +uestions 1. Discuss the nature and characteristics of the problems in this case. .
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S"MMA!4
%his case study all about the /harat 8ngineering works (imited is a maor manufacturer of industrial machineries besides other engineering products. %he company was only single in the market. #owever, the scenario changed +uickly because of the entry of two new competitors in the field with foreign technological collaboration. :irst time company was faced the problem with them product and marketing. ;ensing the likely problem, the chief executive appointed 7r. Arvind umar as general manager to direct the operations of industrial machinery division. 7r.umar has similar assignment abroad before coming back to India. %he executive advised him to consult various heads of department to have firsthand information. %he board of Directors insisted on introducing this in several meetings both formally and informally. After oining as a general manager 7r.umartold to the all heads to identify maor problems and issues concerning them. %he marketing manager indicated that in order to achieve higher sales, he needed more sales support. %he production manager complained about the old machine and technology. cost of production was high but without corresponding +uality. Director of research and development did not have specific problem and, therefore, did not indicate for any change.
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'(1 Disc$sses Te Nat$re And Caracteristics O. Te #ro6*e%s In Tis Case(
/harat engineering company only one company in the market for the industrial machineries and other engineering product. It has enoyed considerable market preference because of limited competition in field. ;uddenly two competitors enters in the field thus, the company faces competitive factors as problem in marketing its products with usual profit margin. %he >ompany has lacked integrated planning system. %he general manager asks all the departmental heads to identify problems and issues. %he >ompany is facing both the internal and external environmental obstacles. • •
>ompany has two competitors %he >ompany had lack of sales support and lack of budget for demonstration teams.
7oreover the production department has old machines and e+uipments. esearch and development department did not emphasise on short term &roects which can easily increase efficiency. %hus, the company is suffering from both the internal and external factors %his leads company to live in usual profit margins.
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' 0 )at steps so$*d 6e ta7en 6& Mr( K$%ar to oerco%e tese pro6*e%s/
1K %o overcome these problems 7r.umar should apply and implement ;hort run planning and proect which can improve productive efficiency At least 23 with out any maor capital outlay.
K 7r. umar should identify the company's strenghs and weakness and 8valuate them.
FK 7r. umar should try to give more better services , products with good Juality. And build up strategies for a short period of time.
GKwith the strategic planning 7r. umar should built up co-ordination among All the departments.
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CONCL"SION
%he company should format strategic planning for short term period to over >ome managerial problems and should necessary steps for raising or improving %echnical and productive efficiencies and also establish another alternatives If one alternative cannot success.
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