HR DECISION MAKING

by seema
(Pakistan)

How should we do HR decision making involving no financial costs but high reputational/ behavioral implications?


Answer

Your question is basically how do you make a qualitative decision versus a quantitative decision. If you check out the Decision Matrix page on this website, it gives an example of making largely qualitative decisions. You essentially make small non-financial decisions in order to make larger decisions.

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Organizational Decision Making Models

by Ces
(Tabaco City, Philippines)

What are garbage can and process models of decision making and their details?

Comments for Organizational Decision Making Models

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Dec 22, 2009
Garbage Can Decision Making and Process Decision Making
by: Dee Reavis

Garbage can decision making is a phenomenon of big organizations. Big organizations are often very efficient at developing solutions. There are often solutions in search of a problem. So as the analogy goes, all you have to do when you have a problem to be solved or a decision to be made is to look in the garbage can where all of the excess solutions have been discarded.

Process decision making is somewhat similar to garbage can decision making. In large organizations, there are usually policies and procedures for almost everything. When making a decision, it is first necessary to consult the company policy manual to see if the decision has already been made for you.

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Working Capital Requirements

by Nozithelo
(Bulawayo, Zimbabwe)

Is profit more important than cash?

Answer

What the question is really about is working capital requirements. Almost every business requires a certain level of cash to keep operating. If that cash is used up then the business can go broke. Let's look at a simple example:

Suppose that you have a business that makes pizzas. You know that the ingredients cost $2.00 and the labor costs $1.50. You also know that you can sell the pizzas for $8.00. That gives you a profit of $4.50 per pizza. You are making a profit. The problem is, especially with a start up business, you need to establish a presence in the market place before you can make that $4.50 profit per pizza. You may have to have your business running for several weeks or months before you have enough customers to make a consistent profit. That means that you have to have a certain amount of working capital to get your business started. Enough to get you over the start up phase.

Even after the business is established there is still a requirement for working capital or cash. For example, you might know that you can make a lot of money when the local college is in session. Actually enough in 9 months to make you profitable for the whole year. The problem is that you need to keep your store open for the whole year. That means that for 3 months you must operate your business at a loss, which requires cash working capital.

So the answer is that working capital or cash can be more important than profit, if it is necessary to keep a profitable business running. However, no sufficient working capital requirement to make an unprofitable business succeed.

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IT Decision

by JB
(Costa Rica)

If I as a BA have to take a decision regarding if a field in a system should has a particular behavior, e.g. a date field to display a calendar for easily enter of a particular date, what should I decide if I know that adding the calendar to that field will cost many hours of working for the developers. Should I ask for the calendar to be added instead of the extra work or should I let the field just as a date box?

Answer

Making an IT decision should be based on your goals and the financial facts. Is your goal to have a date input that will impress your customer? or Is your goal to have a date input box that is available, but won't be used much? If your goal is the former, then you have put a value on the impression that you want to leave. Is that value greater than the cost of the programmer to create it? If so then full speed ahead. That is a simple approach to ROI.

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