Prior Decisions Made
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You have just been promoted from front-line supervisor to be one of the firm's senior managers. During your business education, you learned that the primary role of a manager is to make good decisions. As a supervisor, you had frequently been making routine decisions, but you realize that decision making for the overall company can and will have far greater impact on the company and its employees.
Your boss, the chief executive officer (CEO), realizes that you do not have much practice in this higher level, decision-making process and has asked you to write a memo describing your understanding of how to make important decisions.
Your memo should address the following questions:
Describe at least 3 criteria that would determine whether the manager is making good decisions. What should be done to better assure that you are making a good decision?
In the realm of decision making, what are assumptions? Rather than use a dictionary definition, cite several specific assumptions that would go with any real-life decision you have made or have seen made at a company at which you have worked.
Given the importance of proper assumptions, your boss asked you to assess the accuracy of certain business assumptions and what could you do to test or confirm the credibility of them. The following were major assumptions for each firm:
An automobile manufacturer's assumption that the demand for SUVs would continue because gas prices would continue to rise
An airline's assumption that there was a need for an airline that provided no added amenitie
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Solution Summary
The response addresses the queries posted in 1063 words with references.
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The response addresses the queries posted in 1063 words with references.
//In this paper, the decision making criteria to determine whether the manager is making good decision has been explained. These criteria are helpful for the manager to make out the relevance of the decision. //
Decision making is the result of the psychological and intellectual progression, which leads to the selection of a course of action between some of the alternatives. A final choice is produced by every decision making process. The result can either be an action or an opinion of choice. A certain degree of risk is involved in every decision made. With total surety, only a few decisions are made. So, in accordance with desires and completion of goals, choosing a solution, with the maximum possibility of achievement will be a good decision. The criteria for making good decisions can be summarized below.
One of the major features for good management accounting information is relevance, which means that for each manager, the information raised in the management accounting information should relate to the decisions, the manager have to make. The 'Relevant costs' can be defined as the costs that cope up with the need of good management accounting information.
They can be further defined as the costs that are suitable for a particular decision in management.
The relevant benefits are due to the direct outcome of the particular decision, which decreases the costs and the benefits are increased (Haffezrm, 2012).
Before making a decision in management of an enterprise, the manager has to make an informed decision on any of the subject; all the relevant costs should be incorporated to a specific applicable decision, in the decision making process. Mislead information and poor decision may arise if any non-relevant costs are included, ...
Education
- MBA (IP), International Center for Internationa Business
- BBA, University of Rajasthan
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