Behavioral Model Of The Decision Making
It is a connected report of the previous assignment one, which described the external environment and competitive analysis of the company John Lewis Ltd. It is a famous retailing company in the United Kingdom and deals with various ranges of products like beauty and baby products, kitchen appliances, clothing and leisure, electrical goods, home, lighting and garden products. This company has high end chains of the departmental stores all over the United Kingdom. As it is a strategic corporate management report, this assignment describes some practical strategic processes to cope up the situations, which arises after the external and competitive environmental analysis. The task represents different strategic decisions based on different models, theories and concepts. Moreover, some recommendations are given here to cope up the extremely competitive market based on the above-listed shortcomings.
Every company takes their strategic decision based on theirorganisationalgoals, objectives, values and the respective mission statements. Being a Corporate Strategy Management report, the individual report on John Lewis, United Kingdom, discusses the appropriate and available strategic decisions for the company. As addressed by Course(2015), strategic choices help the managers in setting the goals effectively by meeting the higher generation of revenues and sales targets. The company needs to take some decisions, which are related to the concerned environment in which it operates total resources, the peoples and the interferences between the two units. The company should take the strategic decisions in the context of the propositions of the funds.........
Every company takes their strategic decision based on theirorganisationalgoals, objectives, values and the respective mission statements. Being a Corporate Strategy Management report, the individual report on John Lewis, United Kingdom, discusses the appropriate and available strategic decisions for the company. As addressed by Course(2015), strategic choices help the managers in setting the goals effectively by meeting the higher generation of revenues and sales targets. The company needs to take some decisions, which are related to the concerned environment in which it operates total resources, the peoples and the interferences between the two units. The company should take the strategic decisions in the context of the propositions of the funds.
Figure 1: Logo of John Lewis Ltd.
(Source: Johnlewispartnership.co.uk 2018)
From the above analysis, this can be concluded that being a reputed company in the United Kingdom, the company has many weakness or deformities, which are needed to be sorted as correctly as possible. The company doesn’t have any international experiences, which harms international operations whereas, companies like Tesco, Asdahas a loyal customer base outside the United Kingdom (Johnlewispartnership.co.uk 2018). This factor gives a facility to respected organisationsby increasing their customer base as well as market share. Moreover, being a reputable one, the company should not be impacted by the inadequate internal security system that invites the problems like information hacking, money theft and security-related difficulties of night workers.As justified by Salamanand Storey (2016), this problem impacted the goodwill of the company; customers are feared to deal with the company that their personal information can be hacked by the frauds. On the other hand, the brand mainly popular among the old people who are ranges between 35 to 50 years but the large sector of the United Kingdom’s population comprises of youth. As commented by Ramanathanet al. (2014), this situation can impact the business of the John Lewis's products as people tend to look younger than their ages so they might not prefer the company’s brand in future. The company needs to take serious decisions to modify its products and services with modern apparels that can cope up the choices of the customers.
Figure 2: Comparison of growth of the retailing companies in the United Kingdom
(Source:Ramanathanet al. 2014)
The company should adopt some strategic decisions which will increase persistence with the processing of the available resources, relocating and organising others. As commented by Wheelenet al. (2017), the decisions should deal with the harmonising the threats and capabilities of the organisational resources. As per the theory of strategic choice, every critical resolutionshould be adopted by identifying uncertainties, values and other related things that can influence the business of the company.This decision making system is divided into parts like normative and descriptive, which comprises of the process by which decisions are needed to be taken and decisions are taken presently respectively. On the other hand, theCasual Decision theory decides the several principles of the rational choice that considers,outcomes are the consequences of the judgment of the organisation.As criticised by Kudyba (2014), evidential decision theory ensures the choosing of the best option depends upon the best outcome whereas, the Game theory decides the mathematical solutionsof the strategic making of decisions and the cooperation and conflict between the decision makers. Bayesian approach or a probability theory and an extension of the logic enablesreasoning of the prepositions with a true or false state. The leaders of the company can utilise any of the ideas to analyse the procedure and approach in making the strategic decisions.
The company also can follow the models of the strategic decisions making skills to cope up the changes in the recent world business. Moreover, to stay ahead in the competition in this fiercely competitive retailing market, the John Lewis Ltd. company should follow the models of strategy making decisions. Rational Decision Making model gives the concept of the economic approaches that deal with the resulted goals of any changes and the action (Judge and Talaulicar2017). It also works in maximising the efficiency of essential criteria with the help of choosing best options. The above model works on six steps which comprise of the defining of the goals, recognising of the alternatives, examining of the useful results of each other options etc. Furthermore, the making of the decisions depended on the unique criteriamonitoring of the implementations and based on feedback modifying of the first decisions are the sectors, which also covered by the above model.
Garbage Can Modeldeals with the managers and organisations,whichhave many inconsistent, dynamic and ill-defined preferences and the companies that are running by trial and error method (Alkhuraijiet al. 2016). This model used in the highly unclear environment and here, the decision maker identify their goals through the actions. As commented by Goetsch and Davis (2014), participative Decision Making works with all workers who are directly or indirectly affected by the decisions. Moreover, choices in this model welcome the information and ideas from the person, who don't have any real power of the decision making.
Lastly, the Bargain Model applies in the respective situations where two or more parties are engaged in the decision making procedures, and there is an interest in the conflicts. The negotiators or the leaders seek shared interests and mutual benefits in maximising the chance of the achieving the concerned goals(Judge and Talaulicar2017).
Figure 3: Behavioural Model of decision making
(Source:Ibrahimet al. 2015)
Above all the theories and models the company John Lewis Ltd. can use the behavioural model of strategic decision making due to its effectiveness in this particular sector. According to the Behavioural model, managers cannot take entirely rational decisions because they can consider and approach the minimum amount of data at the given time. Moreover, time, information, expertise is limited in each situation, so the comprehensive analysis is almost impossible or very hard in many cases. As justified by Ibrahimet al. (2015), the human cannot recognise and consider all limitations or constraints thus, the all the effective alternatives will not be analysed in the decision making procedures.Unlike the rational model, this behaviour one doesn't provide only one best solution to the problem. Decisions based on this model comprises of the organisation's situations, manger's characteristics and other primary factors, which is very much necessary in this situation.
Assignment one covers the competitive analysis of the company John Lewis Ltd. through the tools of Porter's Five Forces. That assignment provides an overall aspect of the competitive environment and the company's weaknesses and strengths to cope up the tough retailing market.After discussing the global situations, this assignment is going to address the growth platforms and appropriate strategies that the company required to adapt to minimise the issues. The company recently defences its charging suppliers of the new policy with a rebate to increase the sales through the stores. As commented by Bansal and Sharma (2015), by adopting this method, suppliers make the big retailers like John Lewis more powerful, and now the company can dominate over the retailing business. In other words, the bargaining power of the distributors is increasing, and it makes harder for the suppliers to earn a profit from this deal. Moreover, this deal also affected the new entrants in the retailing market as; new entities in this market need firm order of products, suitable and established relationships with the supply chain initiators to make a place in the market.
Figure 4: Dropping of sales of John Lewis
(Source:Morganet al. 2017)
Furthermore, the company also needs to make up a committee with a set of individuals, who are affected by the issues or problems and the other people who will be there to address the issues appropriately. Moreover, the identification of the new cooperatives and invite them to the strategic decision making procedures are also very much relevant at thisorganisational level. As commented by Morganet al. (2017), description of the vision for the concerned activities and initiate them in a proper and adequate time are also a significant part of the strategic progress. Moreover, the company also requiresimproving its international standards of business and operations with modern and new outlooks that can attract the young members; it also can improve the situation regarding the bargaining power of the buyers.
Every organisation has some futuristic objectives, goals of development while doing the strategic planning for its operations. Likewise, the company John Lewis is working on its weaknesses to overcome the situation and make a profit, huge customer base and market share in near future. The company has an excellent reputation and loyal customer base in the United Kingdom but presence some issues makes it backlasher day by day. Effective and immediate measures are must need to take by the companyto fight against the situations and rejuvenate the market correctly. As criticised by Cathcart (2014), despite conquering the financial crisis in the late 2000s, the company faces the slowed growth rate due to many issues. As the spending power of the customer's decreases, they are most likely to buy quality products at lower price. Though the company has so much potential to maintain its market place in the United Kingdom, it should be more aware of the negative publicity, which can destroy their brand values. Not only this, but the company also needs to maintain the relationships with the investors and reforms its executive management system for improving the corporate image.As described by Smith (2014), online sales and development in the other markets will also give the company a golden opportunity. Proper research and development team with improved and efficient technology and personnel can make profit for the company by addressing the recent choices and wants of the consumers.
Figure 5: An estimated growth of John Lewis Ltd.
It’s good news that the company is responding significantly to the changing dynamics of the customers and markets. However, the changing pattern of the choices of the consumers in the United Kingdom will make the situation more competitive day by day in the retail market. Recently, the company is also taking some internal approach of evaluating the competencies and essential resources within the business. As commented by Pollaneet al. (2017), companies have more control in their internal resources than the outer one, so a thorough approach of the regular assessment can help the company in address the continuously changing nature of the market. It also helps in the creation of the changes in the broader environments and improvements in the value chain. By using this method, the company John Lewis also can expand their business as well customers into other areas with the help of credit and other online facilities.
The above report describes the different strategic recommendations to the company John Lewis Ltd. based on the weaknesses, which are listed in the previous assignment. It is a famous company in the United Kingdom and has an enormous range of customers and chain of departmental stores in the United Kingdom. The above task described the strategic decisions by some theories, models and concepts of the decision making skill. It can be concluded from the above writing that the company must need to secure its places in the global market by introducing new and modern levels of brands and internal view of operations. Moreover, the behavioural model of the decisions making is the most appropriate one, which the company can follow to build up a strong management team to achieve the future goals.