Business Decision Making

for HND in BM

By: Rajitha Ranaweera

BSc (Industrial Management)

Learning Outcomes
Uses variety of sources for the collection
of both Primary and Secondary data
Apply a range of techniques to analyze
data effectively for business purpose
Produce information in an appropriate
formats for decision making in an
organizational context
Use software generated information to
make strategic, tactical and operational
decisions

An Organization
An organization is a social
arrangement which pursues
collective goals, which controls its
own performance, and which has a
boundary separating it from its
environment. The word itself is
derived from the Greek word
(organon) meaning tool.

Organizational Environment &

Stake holders

Organizational Environment &

Stake holders (cont.)

Effects of Stake holders on an

Organization
Customers =>
Organization
Frequency of buying
Buying patters
Buying preference trends
(Weekly, annually, upward,
downward, etc.)
Requirement demanded on
new products, product mixes

 Supplier => Organization

Lead time and its deviations
Cost variation
Transportation damage and cost
estimations
Quality assurance of row material
Inventory management

 Competitor => Organization

Re-engineering
Substitutes
Factors creating competitive advantages
Bench marking

VS.

Toyot
a

Cadillac

 Regulators => Organization

Testing to certify quality
Inspecting to maintain sustainability of quality

 Owner => Organization

Future profit potential of investments
Current financial performance
Stability and the strength of the capital
structure

 Managers => Organization

Efficiency level trends
Cost maintenance
Work force management

 Worker => Organization

Targets
Performance
Efficiency

 Conclusion
Every stake holder needs different kinds of
information to take decisions
Information regarding stake holders and
their behaviors are critical for the effective
and efficient management of a firm

How information will be

achieved..
Process

Dat
a
Feed
back

Informatio
n

Informatio
n
inventory

Problem solving overview

Real world
problem

Real world
interpretation

Convert real
world terms in
to theoretical
terms

Convert
theoretical
solutions to
real world
solutions

Theoretically
defined problem

Find the
solutions using
theories

Problem solving Process

Define the
Problem

Identify
the
alternative
s

Determine
the criteria

Collect
data

Structuri
ng

Decisio
n

Evaluate

Implement

Analyzin
g

Chose an
alternative

Analyze
data

Evaluate
the
alternative
s

Data types
Primary vs. Secondary
Primary data
is a term for unprocessed data, it is also
known as row data. Raw data can be
input to a computer program or used in
manual analysis procedures such as
gathering statistics from a survey.
it may have the following attributes:

possibly containing errors

not validated
in several different (colloquial) formats
uncoded or unformatted
suspect, requiring confirmation or citation

 Secondary data
Secondary data is collecting and
possibly processing data by people
other than the researcher in question.
Common sources of secondary data for
social science include censuses, large
surveys, and organizational records
In sociology primary data is data you
have collected yourself and secondary
data is data you have gathered from
primary sources to create new research

Continuous vs. Discreet

Continuous data
If any value within a defined range
calculates

Discreet data
Only some values will be taken

Qualitative vs. Quantitative

Quantitative
Data which can be measured by a value
Ex / length, height, distance

Qualitative
Data which cant be measured by a
value
Ex / taste, feelings

Cross section vs. Time

series
Cross section

Data collected at a particular time

Ex / speed of a car in a 4th minute (field
surveys)

Time series
Data collected through a period of time
Ex / most secondary data

According to the scale of

measurement
Nominal
Names or categories (frequency is
important)

Ordinal
Ranked data where order is important

Interval
Ratio

Data collection planning

Pre collection activity Agree goals,
target data, definitions, methods
Collection data collection
Post collection activity - Present
findings, usually involves some form of
sorting analysis and/or presentation.

Detailed Data collection

Planning steps

Define objectives of the survey

Define population to be covered
Define the frame for the data
Divide up the population into sampling
units
Determine the sampling parameters:
size, manner of selecting, estimation of
population characteristics, margin of
uncertainty allowed, estimated cost

 Define information to be collected:

relevance, completeness
Define method of collecting data [and
calculating its actual cost]
Specify survey time scale, completion
dates of steps [Gantt Chart, Critical Path
analysis]
Construct questionnaire or schedule
Train interviewers and establish supervision

 Design procedure for inspecting raw

results and editing
Define how to handle non
respondents
Analyze the data
[Present results to decision makers]

Data collection methods

Direct observation
Experiment
Survey
Personal interviews
Telephone interviews
Self administered surveys (most online surveys)

 Type of survey
Statistical survey
a collection of quantitative information
about members of a population

Census
a collection of information about every
member of a population

Sampling (statistics)
collecting information on only a sample of a
population

Factors to consider when

deciding the data collection
method
Importance of the data accuracy
Resources availability
Time availability
Ability to reach (how difficult to reach
the origin of data)
Legal aspect (is it legal to collect
data in this manner)

Designing Questioners
Factors to be considered when
designing questioners
Length of the questioner:
Should be short as possible, so respondents
may not get boarded and less enthusiastic

Length and content of the questions

Short, simple and clear questions which can
be answered quickly, correctly and with out
ambiguity are the best

 Begin with simple demographic questions to

allow the responder to adopt
Dichotomous (questions which have only
two possible answers) and multiple choice
are popular and some times better [answer
for a dichotomous question may be based on
assumptions which are foreign to responder,
then it can create confusion. / some times
responders feel that all any of the choices
given do not represent the correct respond]
Open ended questions provides an
opportunity to get an insight from the
responder

 Avoid using leading questions

Allocate sufficient time to prepare a
reasonable respond
Prepare the questions according to the
plan you have created to analyze the
data in later stage

Cases
Want to reduce the traffic within the
Kandy city limits
Wants to develop a apartment
building complex in central province.
Director operations asked to find a
method to reduce the inventory levels
in your (manufacturing) company
Want to develop a computer system
for your business.

 Need to prepare a data collection

plan should justify the selections
you have taken.