3.4 How do businesses operate1 Unit 4.3 What Aids Decision Making?

By the end of the lesson, you will understand How information helps decision making That there are different types of information How to give examples of information helping in decision making What is a simple decision making model What are the stages in a complex decision making model 3.4 How do businesses operate2

How Information helps Decision Making How will Helen decide whether to open on Sundays? How will Asda decide whether to open a new store in Tobermory? Information used to decisions like the above must be ACCURATE and UP-TO-DATE. 3.4 How do businesses operate3

Information helps decision- making Information can be accessed from a variety of sources: Internal computer files www Newspapers/Books Letters CD-ROM People TV

Different Types of Information There are 4 main types of information that you must be aware of:  Primary  Secondary  Internal  External 3.4 How do businesses operate5

Primary Information This is information gathered by the organisation for a specific purpose. For example, getting feedback from staff or customers by using a survey observing interviewing questionnaires surveys 3.4 How do businesses operate6

Secondary Information This is information gathered from published sources outside the organisation. It may not be used for the purpose for which it was gathered. For example, Asda may look at published population figures to decide whether to locate a new store in a particular area Firm ’ s own reports Government statistics Libraries Internet 3.4 How do businesses operate7

Internal Information Gathered from within the organisation. For example the company sales figures for the last 3 years final accounts sales statistics staff turnover training costs 3.4 How do businesses operate8

External Information Gathered from outwith the organisation. For example newspaper articles. population census information competitors ’ company reports buying habits of yr olds new employment regulations 3.4 How do businesses operate9

Quick Quiz 3.4 How do businesses operate10 Primary or Secondary?

3.4 How do businesses operate11 Internal or External

Simple Decision Making Model Define the problem Collect relevant information Develop alternative solutions Assess different outcomes Select the best solution Implement the solution Measure results Start

Complex Decision Making Model (POCGADSCIE) Identify the Problem Identify the Objectives of the solution (what is the outcome to be) Identify the Constraints (what problems may be encountered) Gather information Analyse information Devise possible solutions Select the best possible solution Communicate the decision Plan and Implement the solution (put the solution into practice) Evaluate the effectiveness of the solution (how successful was it)

Qualities of Good Information FeatureDescriptionExplanation Timely Information should be available when required Eg Business final accounts must be prepared in time for shareholders meeting Accurate Information should be correct Eg accurate market research (field) required to make decisions on new products Relevant Information should relate to the decision being made Eg Prices of similar products may be used to help pricing decisions Complete All the information should be available to allow decision to be made Eg Information on all systems on the market should be available when deciding which new computers to buy Up-to- date Most recent information should be used Eg using up-to-date ferry timetables when planning business trip Cost Effective Information should not cost too much to gather Field research may be expensive. Desk research cheaper.