Introduction
Decision making is necessary for every organization and for proper decision making, certain things are needed such as information and knowledge, without which decisions cannot be made. Collecting information for decisions making system is not a difficult job but managing that information is considered as a tough one. Therefore, various tools are used such as IT system which helps in collecting, storing and accessing information technology and knowledge. After the collection of information, the next step is to provide that information to every department of the organization so that they can take decisions and hence for that purpose, the proper communication process is required.
As per the assignment, SPL Limited is being taken into consideration. Star Printers London Private Limited is a London based printing company that prints local magazines, business stationery (such as memos, letter heads and business cards) with a range of diversified commercial interests.
The report includes various strategies adopted by the company to survive in the competitive market. As competition is growing in the market so what step the company will take to improve communication, knowledge, information and the use of IT system within the organization. Part from that, the report also includes the strategy that the company will take to assess its internal and external information requirement and how it can be fulfilled in order to have effective decision making.
Task 1
The range of decisions
Business, in order to carry out its operation, is required to take decisions at every level of the organization. For example- as competition has increased in the market for SPL ltd, so the company is required to take some necessary decisions in order to keep its brand image in the mindset of the customers.
But in order to take appropriate and effective decisions, planning is essential as it enables the managers to make decisions in a more intelligent way. Even planning makes the decision easier by providing necessary guidance to it (Welch, 2002). Planning also provides aim to the decisions. Some benefits of planning are discussed below:-
Planning helps in transforming values into action by providing guidance to the decisions. At the time of emergency, the decision maker can take decisions by looking into the overall plan.
As resources are limited so as budget and time therefore, planning helps in utilizing the scarce resource in an effective manner thus providing more benefits to the company.
Planning can also be used as a measurement toolas it showswhether we are on the right track or not and if not then necessary actions can be taken against it.
Range of decision
The range of decisions that are needed to be taken includes strategic decisions followed by tactical decisions which later splits into operational decisions.
Strategic decision:
These decisions are long-term decisions and are taken by senior managers of the company. These decisions are made by keeping in mind about the organizational objectives. It involves large sum of money and helps the managers to solve various strategic issues thus providing growth to the business. These decisions are related to the environment in which the company exists (Nutt and Wilson, 2010).
Tactical decision:
These decisions are taken by senior or middle managers of the company and it can have medium-term impact on the business. It involves limited resources and here, the manager’s monitors, collectsand takesdecisions and administrative activities. These decisions are made taking into consideration the welfare of the employees of the company. SPL Limited can use these decisions to stop its employees from leaving the company (Nutt and Wilson, 2010).
Operational decision:
These decisions are taken by middle or first line managers of the company and it can have short-term impact on the business. It involves more limited resources and here, the managers keep a record of elementary activities and transaction which are taking place in the organization for decisions making system. These decisions are made taking into consideration the company’s production and growth.These decisions are made on a daily basis relating to its day to day operations. SPL Limited can use these decisions to adopt various strategies to get its position back in the market (Nutt and Wilson, 2010).
The information and knowledge needed for effective decision taking
In order to have effective decisions, the company requires having many things such as information and knowledge. Information is a key necessity for effective decision making and the information should be reliable and qualitative in order to have best results. Apart from this, the information and knowledge should also be up to date as the business world changes rapidly and a small change can create a big difference.
For effective decision making, the company should also know about its competitors i.e. their strategies etc. as due to heavy competition, it is assumed that SPL Limited is going to have loss both in case of profit and staff so there is a greater need for the company to know more about its competitors (Kourdi, 2003).
At last, the company should have information related to its customer and market as it is going to help in making profit. Various changes and trends occur in the market and also the demand of the consumer changes with the trend so therefore, market research is essential for effective decision m
Internal and external sources of information
There are various sources from which a company can derive information and data but the main challenge is to derive the reliable and relevant information. The sources of information that is required for decision making can be internal information and external information.
Internal information
Internal information is that information which is collected from within the company (Axelrod, 2004). The sources from where this information can be collected include the following:-
- Financial information: –It includes information related to the profit and loss of the company, cash flows, costs, investment etc. Accountant monitors this information and determines whether the company has the capability of generating profit or not. Accounting records of the company are the main source of information as it shows the company’s day to day transaction which helps in future planning.
- Marketing information:-This information is needed to evaluate which product of the company is mostly appreciated by the customers. This information can be derived from various departments such as sales. It can also be collected from external sources. This information helps in keeping the customer more satisfied and happy.
- Purchasing information: –This information is being collected by the purchasing department. The department purchases all those products which are needed by the company to carry out its day to day operation such as computers etc. The department is required to monitor the cost and quality of all purchased products to make sure that they get the best one which will help in earning profit for the company.
- Sales information: –These information are related to the performance of the company, its distribution channel etc.the sales department monitor the product that the company offers to the customer. For example- as due to excessive competition, the sale of SPL Limited is decreasing therefore; this information is required to pass to the marketing department to watch if launch of a new market campaign would have any impact on the sale of product.
- Personnel information: –This information isrelated to the employees of the company. It helps in knowing how much an employee has worked for the company. The company should have relevant information regarding the employees for health and safety reasons (Axelrod, 2004).
External information
External Information is that information which is collected from outside the company i.e. what is happening beyond the boundaries of the company. The sources from where this information can be collected include the following:-
- Government: –This information is reliable in nature as it is provided by the governing body within which the company operates. The company must collect legal information which is necessary to run the business successfully.
- Research: –The information derived from research are more valuable as those are more accurate and reliable.
- Trade groupings: –Trade group means a group of business which trade within the same sector. Therefore, trade grouping helps in deriving information which is necessary to carry out the operations (Axelrod, 2004).
Recommendations for improvement
In order to take effective decisions, the company needs to have some appropriate sources through which reliable information can be collected. Collection of internal information is not a tough job but external information needs more attention. Therefore, some sources such as market research, suppliers, customers, distributors etc. should be used by the company.
Task 2
Stakeholders
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