StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

How to Make Important Business Decisions - Essay Example

Cite this document
Summary
The author of the paper "How to Make Important Business Decisions?" argues in a well-organized manner that to make a good decision it is necessary to decide what more information should be collected in order to increase one's understanding of the situation…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER91.3% of users find it useful
How to Make Important Business Decisions
Read Text Preview

Extract of sample "How to Make Important Business Decisions"

It is time to find out the people or place from where the information can be collected. Thereafter, the information can be collected. At the next stage, the fears, expectations, merits, and limits in each point of view are analyzed (Stages in decision making).

An assumption can be considered as a statement that one considers as true but without any concrete evidence to support it. In the business world, it is necessary for companies to make assumptions in a number of different situations. For example, companies will make assumptions on the amount of pension that will be paid to the retirees in the future as a part of making financial statements. In addition, we make many assumptions in everyday life too. For example, one driving on the road assumes that all other drivers will obey traffic rules and that all will stop at a red light. As Adamson (2010) points out, there are many other common assumptions made by companies in their day-to-day functioning. For example, one company assumes that the economic situation will be back to normal soon. Another might assume that the changes in the market are temporary. In addition, another company assumes that what their clients want is product A. Another assumption is that the company has to invest in the field. Also, one can see many companies boasting that no other company can beat them in product Y (Adamson, 2010).

However, the fact is that these assumptions are not absolute and in case of their failure, they will have a huge impact on the future of any company. For example, these primary assumptions will be followed by a number of secondary assumptions that will move further away from reality. So, it is necessary to have an assumption testing system in the company. Some common methods that can be used to verify the validity of an assumption are communication with the customers or prospects, formal market research, internal surveys, competitive research, secret observation, and consulting experts. In fact, the importance of communicating with experts is identified by Janis (2011, p. 24)  in an analysis of the failure of the Bay of Pigs invasion. 

As far as the first assumption that the demand for SUVs would continue as the gas price would continue to rise, it is necessary to analyze the situation. First of all, through stakeholders, one should identify the possible change in the price of gas, and if using SUV is economically more viable than using gas. For the purpose, it is necessary to identify the various stakeholders involved. Their opinions should be collected individually and can be collated. In case of different opinions, it is necessary to have a debate on the issue (Strategic Assumption Testing).

In the second example, in order to check if people would love an airline that provides no added amenities, it is necessary to identify the stakeholders, that is, passengers of various economic levels, and identify their preferences. Thus, one can say that it is necessary to identify and analyze stakeholder opinion to scrutinize the credibility of assumptions

Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“IP 2 Essay Example | Topics and Well Written Essays - 500 words”, n.d.)
Retrieved from https://studentshare.org/other/1426123-ip
(IP 2 Essay Example | Topics and Well Written Essays - 500 Words)
https://studentshare.org/other/1426123-ip.
“IP 2 Essay Example | Topics and Well Written Essays - 500 Words”, n.d. https://studentshare.org/other/1426123-ip.
  • Cited: 0 times

CHECK THESE SAMPLES OF How to Make Important Business Decisions

The Good, the Bad, and Your Business

he pressure to make the correct business decisions is often unbearable to many managers.... The primary goal of business entities is to make profits for their shareholders.... But should the urge to make huge profits outweigh the urge to reward employees fairly Should managers risk to be entangled in defamation suits by telling their employees why they fired them These are some of the ethical decisions that business professionals have to deal with every day. ...
13 Pages (3250 words) Essay

Information for Decision-Making

The first part explains what decision-making is, its importance in organisations, and common techniques of making decisions.... The fourth part looks at the consequences when the connection between information and decision-making breaks down, citing two related examples based on Making decisions is an intelligent action that any normal human being performs several times each day, starting from the time one decides to get up out of bed and ending with what one decides to think about as one falls asleep at the end of the day....
13 Pages (3250 words) Essay

How to Make Good Decisions in Business

owever, business decisions are frequently made on input information that are either biased or manipulated.... While researchers note that the quality of a decision is often "positively related" to the quantity of the inputs used to make that decision, the relationship between input quantity and output quality is not automatic.... The success or failure of a business relies on the value of decisions made or not made.... ) Recent Effects: Making decisions based on recently seen information....
10 Pages (2500 words) Essay

Statistics in Business Decision Making

imilarly, average values are also calculated for studying the costs also as concepts such as average cost, average variable costs, average fixed costs are important concepts to understand in order to make important business decisions because controlling costs is one of the fundamental responsibilities of the managers.... This paper "Statistics in business Decision Making" investigates the importance of statistics in business.... Statistics provides a clear advantage in conducting the research and deal with day to day business problems in more objective as well as rational manner....
6 Pages (1500 words) Term Paper

How to Make Right Business Decisions for Senior Managers

The author of the paper explains how to make the right business decisions for senior managers.... This, therefore, calls for senior managers to make decisions that serve the uniqueness of each situation.... The author also analyzes the criteria to determine whether a manager is making good decisions and gives detailed information about the assumptions in decision making.... Lack of tailoring in making decisions is tantamount to absent mindedness thus bad decisions made....
3 Pages (750 words) Assignment

BBC Documentary Critique: How to Make Better Decisions

The paper 'BBC Documentary Critique: how to make Better Decisions' states that 'how to make Better Decisions' is a BBC Horizon documentary that highlights some of the common decision making tendencies in human beings as individuals.... The documentary goes on to boldly assert that most of the decisions arrived at are always bad (wrong) decisions.... It claims that while making a decision, one is fooled to assume that they have full understanding of the circumstances that lead to their decisions....
4 Pages (1000 words) Assignment

Business Decisions of SimVenture Software and their significance in a Real Business

A discussion of business decisions and their significance in a real business is explained.... This paper gives a summary of experiences gained when managing a simulated business with SimVenture Software which provides a business simulation that facilitates entrepreneurs to learn how to go about business.... SimVenture simulation created awareness of the significant decisions in a business.... Decision faced included: strategic, tactical, operational, micro, financial, structure, human resource, company, marketing and work schedule decisions....
8 Pages (2000 words) Essay

The Importance of Ethical, Legally Sound Decisions and Effective Communication in Business

The purpose of running a business is not to make a profit alone but also to meet the needs of all its stakeholders.... Therefore, it is important for the management of an organization to make ethical, legal, and fair decisions that are stakeholder-centered.... Understanding what is required in regards to ethics and legality helps the employees to make decisions that are fair to all.... n the other hand, I believe that it is always possible to make a fair decision based on the necessary ethical and legal implications....
2 Pages (500 words) Essay
sponsored ads
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.
Contact Us