The Business Value Of Improved Decision Making

The business value of improving decision making is the ultimate goal of every business, but how does it relate to an organization? A) How does decision making affect the organization? B) How does decision making impact the current strategic business objectives? C) How does decision making relate to your organization’s future? I’ll discuss these topics in this article. A) Improved decision making produces better goods or services. B) Reduced decision-making costs produce increased product or service value. C) Increased productivity due to better and/or reduced errors or the absence of mistakes leads to a large monetary return to the firm. D) Enhanced managerial effectiveness leads to an increase in the Firm’s competitive advantage, leading to higher profits and market share. E) A superior quality of product or service enhances customer satisfaction and extends the life-cycle of the products or services. F) A superior quality of or service leads to customer loyalty, increasing company profits and market share. A) In the production situation, improves the throughput of raw materials and supplies, produces more efficient, more versatile products or services, increases the speed of the production process and reduces costs. B) In the sales situation, increases the number of transactions made per transaction, increases the number of sales, increases the amount of cash collected from customers, increases the level of customer loyalty and leads to customer retention and increased profitability over time. A) In the marketing situation, an organization’s strategic positioning in relation to competitors, the mix of channels, the mix of products and services offered, and the amount and price of advertising and promotional funds are all important factors that drive the competitive landscape. In this regards, an organization has an opportunity to enhance its competitive advantage by undertaking the development of better decision makers. Such enhanced decision makers can be comprised of senior executives, or people who possess strategic management skills, or hired as part of a larger team that includes marketing, sales, technical and manufacturing personnel. A better strategic positioning can give senior executives the ability to make better decisions, which leads to improved overall company performance. B) In the sales and marketing situation, a better decision maker is one who can make decisions quickly and who can make those decisions well. This is the essence of unstructured decision making. With unstructured decision making, senior executives are forced to rely on memory, intuition and other forms of “clicking.” This “clicking” process is especially problematic for those who are not strong in verbal and written communication skills. Thus, such individuals may also end up being unable to understand the full implications of their own decisions, resulting in poor financial outcomes for the organization. C) Finally, improved decision making enables senior executives to take actions that bring about long-term organizational success. It does so by increasing the productivity, reducing cost, increasing profit, and increasing the net worth of the firm. In the end, this translates into increased market share, higher gross margins, more revenue, and higher competitive leverage. These additional benefits are realized through the creation of new markets, new business processes, and new sales channels. These additional benefits also translate into job creation, and the creation of new career paths in various areas such as human resources, marketing, sales, and accounting. Finally, improved decision making allows senior management to meet the challenges of the modern organization.