___ to provide effective ways of making about business decision problems
Answers
Answer:The decisions regarding these require careful analysis of the demand for its product and costs of its production. The other important decision-making problems facing business firms relate to what methods or techniques of production are to be used in the production of commodities, and how much advertisement expenditure is to be incurred for promoting the sales of their products. In deciding about all these problems, a firm has to decide how it can use its limited resources to achieve its objective most efficiently.
The science of economics is concerned with the allocation of scarce resources to alternative uses so as to achieve maximum possible satisfaction of the people. Thus, Lord Robins defines economics as a “Science which studies human behaviour as a relationship between ends and scarce means which have alternative uses”. The type of decision-making by managers of business firms also usually involves question of resource allocation within a firm or organisation.
The resources at the disposal of a firm are scarce or limited. What product to be produced, what price should be fixed, how much quantity of it should be produced, and what factor combination or production technique be used for the production of goods involve resource allocation by a firm. It is the task of a manager of a firm that it should take decisions regarding these resource allocation problems in a way that ensure most efficient use of resources. Only this will enable the firm to achieve the goal of maximisation of profits.
Thus, management science is concerned with the allocation of scarce resources at the disposable of the firm. While economics is primarily concerned with the allocation of scarce resources so as to achieve maximum social welfare management science deals particularly with organising and allocating a firm’s scarce resources so as to achieve the objective of the individual firm which generally happens to be maximisation of its profits. Therefore, management science’s is intimately related to economics.
Explanation:Decision-making process
Define and clarify the issue - does it warrant action? If so, now? Is the matter urgent, important or both. See the Pareto Principle.
Gather all the facts and understand their causes.
Think about or brainstorm possible options and solutions. (See brainstorming process)
Consider and compare the 'pros and cons' of each option - consult others if necessary or useful - and for bigger complex decisions where there are several options, create a template which enables measurements according to different strategic factors (see SWOT, PEST, Porter).
Select the best option - avoid vagueness and weak compromises in trying to please everyone.
Explain your decision to those involved and affected, and follow up to ensure proper and effective implementation.
Decision-making maxims will help to reinforce the above decision-making process whether related to problem-solving or not, for example:
"We know what happens to people who stay in the middle of the road. They get run down." (Aneurin Bevan)
"In any moment of decision the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing." (attributed to Theodore Roosevelt - more maxims on the quotes page)
There is often more than one good answers when you are faced with a complex decision. When you've found the best solution you can find, involve others in making it work, and it probably will.