Decision making and strategic planning in companyTsering Dhondup LamaBUS 345 : Fundamental of Decision MakingProfessor ; Prateek NeupaneJune 7, 2021Westcliff University
Company failureA company's market share is the percentage of total revenues in an industry that itgenerates, itis measured by dividing the company's sales for a certain time period by theindustry's total sales for the same time period(Hayes, 2021).This approach helps the company inknowing its worth, valuation andsize in relation to its market and rivals. Companies frequentlybattle for market share, which refers to how large a portion of a given market a company's salesrepresent. When a company's market share is taken away by a rival, it employs a variety ofmeasures to reclaim it, through reducing the cost, prices, increasing target markets, andinnovation. The losing of the market share in the company occurs due to changes in customerspreferences, lack of marketing, rapid challenges from other competitors. Market share loss andchanges leads the company to downfall, loss or even out of market for some business.The reason for the market falling and losses of the company is also due to poor managingstrategy, lack of employees motivation and poor operational planning. These problems are highlyaffected and impacted by poor decision making. Managers need to have proper knowledge whilemaking decisions as the whole strategic and operational approach depends on the managersdecision. Thus, the market failure and downward trend occurs with poor strategic managementand planning.Decision making in business is affected by many other factors like bias,rationality, motivation, marketing and management. The occurrences of various biases, anderrors can create barriers and problems in decision making. We mostly focus on ourselves andjust wonder how am i going to do better or how am i going to make it work but we tend to forgetour stakeholders or employees. We just go with ideas that support our own views and try solvingthe problems by ourselves even when we have other colleagues, thus, the different basis are
occured. Sometimes when we are making the decision we ignore small details which leads tounknowing biases and errors.Biases stop us from rational thinking. Biases can be mainlycategorized into two types ; cognitive and emotional. Cognitive biases are referred to as thesystematic cognitive dispositions or tendencies in human thinking and reasoning that frequentlyviolate the rules of logic, probability reasoning, and plausibility and human judgment, decision-making, and resultant behavior are all based on these intuitive and subconsciousinclinations((Hans) Korteling & Toet, 2020). Some of the most common cognitive biases that canoccur in organization decision making are confirmation bias, anchoring bias, availability bias,planning fallacy and overconfidence bias. If such biases are not closely observed then it can leadbusiness to downfall. Such as the managers encountering confirmative and anchoring bias wherethey strongly support their personal opinions and ideas highly that results in demotivation of
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