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Analytical Thinking and Decision Making

University: University of Chester

  • Unit No: 16
  • Level: Undergraduate/College
  • Pages: 20 / Words 3500
  • Paper Type: Assignment
  • Course Code:

    BUSN11079

  • Downloads: 0
Answer :

INTRODUCTION

Analytical thinking is a skill which is very important for a business. It is an ability which is used for thinking critically and solving all the problems effectively along with that finding a complete solution that can provide desirable results. It includes the capability of a person for analysing , visualising, articulation and conceptualising the scenario in order to search for a direction on which a person can work to get the efficient output (Al-Aomar and Chaudhry, 2017). This skill is used for taking various decisions which are important for the organisation.

In the following report importance of decision making and its application has been discussed. Apart from this identification and outlining of a decision problem has been provided which is related to selecting best package of software among provided choices with focusing on associated aspects which must be suitable for business. Along with this implementation of multi attribute rating technique is descripted for outlining the decision problem and all those stages which are involved are asserted in a proper manner.

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TASK

1. Importance of decision making and the application of decision analysis.

Decision making is regarded as the backbone of management of every business as a wrong decision can lead to serve many disadvantages. Therefore for provide an effective performance it is very necessary to take right step. Importance of decision making is discussed as below:

Proper utilisation of available Resources- Every company requires inputs such as money, men, materials , machine, information, market etc. These should be utilised without any kind of wastage and leakage which can only be possible through a right decision. This results in minimising the operation cost.

Selection of best alternative- Every problem is known to have many solutions. With the right choice one can have the best alternative by analysing all available option with respect to statistical, financial or accounting techniques.

Achievement of objectives-For achieving desired goal it is very important to take the right step which will lead to a correct direction for performing every task in order to get the results for achieving the ultimate goal.

Identification of problem- The initial step of decision making is identifying all problems. These can occur due to many reasons but the major one can be the gap between what has been thought and implemented in real scenario (Aziz, Sorooshian and Mahmud, 2016). The reason can be external or internal factors. Hence, after the identification the individuals works for eradication of them for effective progress.

Evaluation of alternative actions- After the development of all possible alternatives , the individual should be able to perform the evaluation of every options for a better settlement of problems.

Decision making can be dependent on some theories which are discussed as below:

Normative Theory-

This theory depicts that for making an effective decision one requires a guidance from an expert who enlightens to develop an ability for taking the right decision which is logically accurate.

Descriptive Theory-

It involves observing the activities of real scenario and noticing their every aspect, which is used as the basis for effective decision making.

Probability Theory-

It include those rules which are required for deciding the correct step which shall be equivalent to the rules of Bayesian along with considering some functions for utility and associated distribution.

Decision Analysis is performed in such situations where there are uncertain decisions and consequences which are related to objectives and their preferences. There are many aspects which can uncertainly occurs and has the potential for affecting the complete working structure of any organisation that is regarded as a serious concern which is required to get solved and also avoided for implementing several decisions effectively (Benaka and et.al., 2016). It assist in making many strategies which are required for formulating tactics that are considered to be necessary for handling all impacts that leads to creation or generation of disadvantages on implication of project in real scenario, that will provide a competitive advantage for the organisation to get high preferences among competitors by the potential customers. Decision-analysis is performed for making the project viable in every aspects. Its feasibility must be counted in terms of technological, financial and other terms that are considered as important for any project The perfect analysis of any decision derives an effective result which are associated with any kind of proposal for project.

The analysis is done by evaluating all the external and internal factors which is mostly performed through Porter's Five Forces and Value chain analysis. These factors are bargaining power of customer, and suppliers which involves the cost which is related to switching factor of consumers for availing any product or services and supplying power of suppliers respectively. The threat of substitute and new entrants can be another concern which can affect an organisation, apart from this presence of competitors also influences their functionality. On the other side value chain analysis comprises of all operations such as installation, development that can be required for accessing all software packages which were presented for solving the problem of a company. Also, decision maker has to perform SWOT analysis in order to determine the strength, weakness, opportunities and threats which can be associated with selection and implementation of decision which is required for company to provide web based and mobile based platform to the users in an effective manner while keeping the control on all cost factors (Christmann and et.al., 2017). These factors guides every decision maker who can lead to analyse every aspect which can facilitate for effective decision making which can be beneficial for them in many ways and has lead to accomplish the goals and objective within provided time period.

2. Identification and outlining of the problem associated with the work

There are various obstacles that affects performance of a company , requiring an effective solutions implemented by managers for enhancing efficiency of business. There is a need of analysing actual problems which are associated with all those packages which are provided by software agency to the firm as per requirements of them. There can be many reasons for creating inefficiency of software in practical implementations such as many bugs in the programmer which is developed, there can be a gap between developer and client that as lead to poor output which does not satisfies them in either way; another one can be the use of obsolete technology which has failed to cope up with the present scenario and demands associated with technological aspects .

Apart from this there were several other challenges which were faced by the agency of technical services in order to develop a software packages that can satisfy the client and also to be made on low cost factors, both of these combination was very hard to implement. The major responsibility which came after their selection for providing the services was to take a correct decision which was potentially confusing with respect to concentrating on the development of an effective project plan that fulfils all their requirements (Demesouka, Vavatsikos and Anagnostopoulos, 2016). Another problem was they were not aware about their competitors in order to analyse their strength and weakness that could be used for making an effective plan which can provide them an advantage over other. They were not having any idea regarding what other rival can serve for solving problem and on the other hand providing an opportunity to provide an effective plan that can fulfil all their criteria such as having low development and maintenance cost while also providing access to huge amount of uses through web and mobile based platforms. With the aspect of not knowing other agency there was a fifty percent chance of winning that provides them vague idea for their strategies that could be made for proposing a particular plan as per the requirements; there were some chances that the formulation of the solution can be similar which can be disadvantage to them. It was considered to be very important for that agency to create such kind of strategy that should be different and much better than their rivals in order to get selected and experience more benefits for future purpose. There were many aspects such as involving of low maintenance and development cost which must be compilable with portable devices and their functionalities which would be used for running those applications provided by the company.

Apart from these all the departments of a company must be figured out in order to know its feasibility according to them such as finance department could provide the idea for the effective budget that should be involved for implementing those ideas in business , apart from that marketing and sales department can determine the probability of the sales and effective strategies that can provide them a distinction in the market, human resource department could analyse the demand of employees according to their skills in order to maintain the project effectively without any problem. All the decisions from various expert of these departments must be taken so that the plan which will be formed shall be able to fulfil every criteria and is completely feasible to adopt.

These applications has some requirements such as cost related to investment and apart from this it was not easy to control the maintenance cost as their criteria cannot be fulfilled with low cost. The estimation which was provided, regarded to be not achievable but in order to take an opportunity for getting selected they have to formulate such plan by accepting all the challenges which are associated with it. To overcome these they conducted a meeting with their client for successful implementation of projects(Farhadinia, 2016).All the doubts were cleared out and also gained necessary facts and data which could be beneficial for them. Keeping all these things in concern they decide to make four types of packages that leads to create several possibilities and should lead to provide accomplishment of goals and their objectives. The objectives which are marked by other specialist has lead to provide a specific designing of all the software for implementation.

There are four packages which has certain criteria that are from highest package for development to the lowest with associated efficacy which is very important for get achieved.The range of packages were from £100,000 to £50,000 along with this the proposed a back up plan which could be required when crisis occurs. The deal is known to be very beneficial for the agency as the cost of making the project would be lesser as compared to the amount which the cli9ent company is proposing to pay. Therefore, it is know to be an advantageous deal and a regular customer who will provide many chances for earning well. Hence all the problems which were associated should be eradicated in order to provide an effective project that satisfy their clients in an effective manner.

3. Multi-attribute rating technique (SMART) for outlining decision problem.

For solving the issues and overcoming all the factors that can influence the decision making process of any business , there is an urgent requirement of analysing the market a d internal efficacy of firm for meeting the challenges. There fore there is a need to use multiple attribute rating technique that can solve the problem in an effective manner.

Simple multiple Attribute Rating Techniques:

This is the method which is used by very business to make the decision to be perfect for incrementing the operational ability of business. The technique consist of various steps which are completely relevant for the identification of problems and their effective solutions that can be used and formulated by managers for solving all those problems. It facilitates to present the in depth analysis and finding the alternatives for overcoming all problems (Groesser and Jovy, 2016). There can be several steps which are performed by companies to assess the effective solution to settling down all the demands. In order to know the effective package among the available options one has to judge its every criteria that should match with requirements. Following are the stages which are involved in following ways:

Stage 1-The initials needs of the business is to identify the appropriate decision maker. This includes that conduction of proper research is required in the company for identifying the individual who has the ability to analyse and take smart decisions. For improving the performance of the business and along with that generating the required amount of returns. With the help of an expert the business will be taken forward in an accurate, effective and suitable direction by complete rectification of problems. In the case scenario the major problem was the lack of all the particular aspects which can be used for effective formulation of strategies. Thus to make the strategies to be more efficient it was very important to know all the factors.

Stage 2-This step involves the identification of all the problems that are involved in formulating the plan in an effective manner. There is a neds for having correct measurement of all issues and the related strategies for overcoming all these problems. The major issues which were invoked in the business were cost related to maintenance and development which was demanded to be kept low which was not possible in the real scenario.

Stage 3- This includes that individual should identify all the alternative solutions for solving the problem and to make the plan according to the requirements therefore the service providing agency focused on providing the four types of software packages (Huang,Huang and Tzeng, 2016). Alternate solutions are very important in order to maintain the variability factor that is required for deciding the best factor.

PARTICULARS

COST OF DEVELOPMENT

SOFTWARE A

£100,000

SOFTWARE B

£80,000

SOFTWARE C

£60,000

SOFTWARE D

£50,000

Stage 4- The process includes the identification of all the issues which leads to consider several attributes and associated decision making. With the help of this particular technique the agency will be getting benefit for implementing the appropriate changes in the formulation of various packages with the data that is been provided by the experts which are related to investment.

Stage 5 - This step provides effective assigning of values of every aspect of software packages. It helps in measuring the level of customer satisfaction and effective ranking of all these criteria. With the analysis of all rankings according to the attributes one gets to acknowledged related to effective solutions and to provide an idea for which package to be adopted.

In the below mentioned table ranks are assigned to each criteria or location availa (1 = highly preferred, 5=least preferred)

Factors resleated to Softwares

Efficiency

Maintenance

Development

Accuracy

Reliability

SOFTWARE A

2

1

3

4

5

SOFTWARE B

2

5

1

4

3

SOFTWARE C

4

1

5

1

1

SOFTWARE D

4

3

2

1

3

Stage 6- This stage is regarded as very fruitful for assigning the weight for each aspect which would be used for getting measured before implementation. It would completely help to analyse the cost require for all these factors which would lead the expert for taking an effective result.

Weight of criteria

Attributes of Sourcing software

Attributes

Weight

SOFTWARE A

SOFTWARE B

SOFTWARE C

SOFTWARE D

Efficiency

12

20

20

40

40

Maintenance

15

10

50

10

30

Development

18

30

10

50

20

Accuracy

21

40

40

10

10

Reliability

24

50

30

10

30

Aggregate

18

30

30

24

26

Attributes

Original Weights

Normalise Weights

Efficiency

20

12

Maintenance

50

15

Development

100

18

Accuracy

60

21

Reliability

70

24

300

90

Stage 7-In this stage the measurement and comparison of all the weight takes place for providing an appropriate ranking in accordance to the low cost for development and maintenance while providing a great reliability and results. Thus, the performance of analysis would lead to provide many benefits.

Stage 8- After the completion of the analysis of weight criteria , there is a definite requirement for analysing other attributes which contributes in determining the suitable package for the client company (McCabe and Chen, 2016). The effective decision would be taken by the managers of the project that would assess all the aspects which are required to focus before choosing any package.

Stage 9-This is known to be the last stage for decision making process which includes the sensitive analysis where the individual who takes the decision for all the changes that could lead to influence the making of settlement.

Weight of criteria

Attributes of Sourcing software

Attributes

Weight

SOFTWARE A

SOFTWARE B

SOFTWARE C

SOFTWARE D

Efficiency

12

20

20

40

40

Maintenance

15

10

50

10

30

Development

18

30

10

50

20

Accuracy

21

40

40

10

10

Reliability

24

50

30

10

30

Aggregate

18

30

30

24

26

4. the strengths and limitations of analysis

There are various factors of the analysis that leads to define its strength and weakness that provides an idea of which strategy is to be implemented and how efficient it would be in decision making. From the following assessment it has been concluded that the client company who wanted to serve a new technology to the users which was web and mobile based platforms while concerning on low development and maintenance cost (Nahavandi and Chesteen, 2017). Thus to meet the demand company used the SMART approach to acknowledge whether which software package was more suitable. Therefore sensitive analysis lead to determine that which software package must be implemented for enhancing the business.

Strength and weakness of smart technique

The theory of multi attribute utility is known to be based on two kinds of assumptions which are preferential independence and normal independence. With the effective evaluation, it has been discovered that the structure of this approach is highly in a line with the traditional analysis known to be CBA. Therefore like CBS, in the method the value is lead to be determined through weighted sum of all impacted scores. This, leads to score the weight which helps all business unit for taking appropriate decisions according to the situation (Ranjan and Tewari, 2016). Apart from this , it leads to develop a relation for making the use and relative understanding of the main strength of the approach. In the context of the scenario the problem which was faced by client company was to select the appropriate package which should be effective and reliable and along with this requisites less maintenance and development cost. For this the sensitive analysis under the SMART approach helps to assess which software package is effective by assigning them related weights and providing them ranking accordingly. With the evaluation all the important criteria fro determining the best software package was assesses that leads the company to choose the most appropriate one that can be very beneficial for the company. Along with the strength here are many weaknesses of this method which can lead to derive the negative impact on the business therefore it is very important to cover all the aspect which are related to it. In this technique under he phase where screening is conducted analysts tends to reject all the alternatives that can have poor performance. Therefore, this method leads to leave a kind set of alternatives which is considered to be in effective for the purpose of evaluation. SMART technique is not considered as the right and effective choice for every decision. Also, those alternatives which are not included may have certain other factors that can lead to provide the effective results which the other sets of attributes might not provide. In this technique those attributes are usually picked which are ranked the highest regardless of any knowledge for its practical implementation (Sodenkamp, Tavana and Di Caprio, 2016). Also the client firm has taken only 5 attributes for the selection of the software which is not necessarily known to be effective while providing the results which are desirable by them and can leads to provide the effective transformation of business.

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CONCLUSION

From the above report, it has been effectively concluded that the role of analytical thinking is known to be very essential in order to take right decisions and corrective measures for eradication of all the problems which can lead to create many disadvantages to the business. Therefore, it is very necessary in order to engage the business by providing various solutions by following certain methodologies in order to select the most appropriate decisions among the available options. Decision making leads to an important aspect for every organisation as it provide benefits in many ways such as identification of the problems and most important to accomplish the goal of an org

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