The importance of analysis and analitical skills to the manager making Essay - 1

The importance of analysis and analitical skills to the manager making decisions in business - Essay Example The success of organisations heavily relies on the decision making processes undertaken by managers. Organisations are complex, and thus present complex problems or contexts in which the manager makes decisions. Monahan argues that sound decision making brings positive results while poor decision making can prove deleterious to an organisation. The author also states that although management involves a variety of functions, decision making is a central managerial function as all others entail its use. A good decision making process will result in good decisions and thus success in business, while a flawed process underlying conception of decisions will have the opposite effect.The use of these decision making approaches together will be analysed in terms of how managers apply them in an integrated manner. Managerial Decision Making, Problem Solving and the Structured Analytical Approach According to Yates, a decision refers to the act of making a commitment to undertake an action that will yield satisfactory results to the beneficiaries of that action. From this definition, it is clear that a decision has three fundamental aspects. First is the resolution to execute an action, deliberateness/intention-where the manager purposefully decides so as to achieve specific objectives, and lastly, the satisfaction of those affected by the decision-the beneficiaries. Decision making, thus, implies the process used to arrive at a decision which translates to the different approaches adopted by different business managers. Russell-Jones argues for the importance of the underlying decision making process, stating that a robust, consistent and analytical approach leverages the elements of complexity, uncertainty, objectives, trade-offs., consensus and flexibility among others. This results in the making of sound decisions that can consistently bring about business success. On a c losely related note, managers increasingly find themselves having to undertake problem solving. Hicks (2004, p. 8) details the concept of problem solving, explaining that it entails the manager seeking ways to move from a present situation to a more desirable one. A problem arises when a there is a disparity between what is and what should be. It also represents a situation in which the decision making individual- manager- has alternative courses of action, all with significantly different effects and thus accompanied by doubt about the best choice (9). A number of approaches can be adopted to make managerial decisions and/or solve problems. Monahan (2001, pp. 2-3) explains the dynamics that affect decision making processes; including availability of information, scarcity of resources, and psychological factors. The author also discusses uncertainty in the process of decision making. Deterministic models of managerial decision making activities are used in the absence of uncertainty , while probabilistic models are for cases where business decisions have to be made under uncertainty. One of the most highlighted approaches to effective decision making is the structured analytical approach. Saaty and Vargas (2006, p. 258) explain that structuring the process through analogies and attribute association helps establish a new perspective to a problem and create an environment in which controllable and distinct alternatives can be generated. Gustafson (2006, p. 12) states that an analytical approach to decision making deconstructs a problem into logical, sequential and distinctive elements which can be assessed separately before recombining the components to arrive at

Introduction to Microeconomics Essay Example | Topics and Well Written Essays - 750 words

Introduction to Microeconomics - Essay Example Table 3 shows the trend in oil supply. Generally, oil supply shows an increasing trend just like price and demand, albeit at a slower pace. Supply grew by only 13.38 during the period. It should also be noted that dips in oil prices are matched by corresponding shrinks in the total supply. Oil supply also dropped during 1998, 2001, and 2002. The law of demand states that "All else equal, as price falls, the quantity of demanded rises, as price rises, the quantity demanded falls" (McConnel and Brue 2002, pp. 41). This declares that there is an inverse or negative relationship between price and demand. Tables 1 and 2 above shows the generally increasing trend in oil prices as well as oil demand which clearly violate the law of demand. In a situation where the oil price is rising, we must expect that the quantity demanded to fall as it discourages the purchases of higher priced commodities. However, the mounting demand notwithstanding the rise in prices can be explained by the factors which are exogenous or are outside the price-demand model. During the past years, there has been a boom in the automobile industry due to the increased purchases of cars and other transportation systems. The airline industry is also showing slight recovery with the proliferation of low cost carriers and the strong activity in the tourism sector. This trends and developments in the global market become the key drivers of oil demand. As the nation and the world as a whole, are becoming more and more industrialized, we also became more dependent on oil to fuel our technologically more advanced equipments. Nowadays, the importance of the oil industry can never be overstated. International demand for oil has also been increasing in order to support the growing economies of the prospective giants like China (Some factors 2005). Insufficiency in this resource will surely facilitate the spillover of negative externalities in the entire economy. Oil has become a necessity. Higher prices have not strongly hindered customers from purchasing their much needed fuel to facilitate the efficiency of their everyday activities. On the other hand, the law of supply can be stated as follows: "As price rises, the quantity supplied rises, as price falls, the quantity supplied also falls" (McConnel and Brue 2002, pp.47). This gives price and quantity supplied a positive or direct relationship. Tables 1 and 3 shows that both oil price and quantity supplied is generally in a upward trend with corresponding dips in 1998, 2001, and 2002. This shows a close positive relationship between the two variables as well as the responsiveness of quantity supplied to oil prices. The empirical evidence shows that the oil industry follows the law of supply. The oil industry has been adjusting to the higher global demand by increasing its production. Oil companies have been very keen in taking the opportunity of producing higher oil quantity in order to accommodate the expected mount in global demand. Although economies of scale must have