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Influencing and Making Decision | Woolsworth Case Study

Introduction

In the given report, I would be discussing the significance of decision making in an organisation and its business operations. The success and progress of the enterprise is based on the various strategies developed by its managers and decisions undertaken. The fundamental function of the management is to make sound and rational decisions that define the course of activities to be performed for accomplishing the defined goals. As a Marketing Manager at Woolworths Supermarket, I have duties and responsibilities imposed upon me, which involve continuous decisions being made, both consciously and subconsciously.

In the given assignment, I will be focusing on the various aspects of the decision- making process, the different kinds of decision-making tools and their utility and the tool used by me, differing on the prevailing situation. The impact of my decisions with reference to the organisational goals and business activities has also been discussed in the report. Woolworths Supermarket is a chain of grocery and supermarket stores based in Australia, operating through its 1000 stores comprising of 968 supermarkets and 19 convenience stores. The core function of the company is to offer groceries and few additional items like DVDs, magazines, household products, beauty products, stationery items, baby supplies, pet supplies and health and beauty products.

 

 

Concept of decision-making

The term “decision-making” has been defined as the procedure of selecting a specific action or course of actions from a group of two or more available options with the purpose to identify a solution for the known problem (Ford & Richardson, 2013).  Among the various options available, an ........

ction of the management is to make sound and rational decisions that define the course of activities to be performed for accomplishing the defined goals. As a Marketing Manager at Woolworths Supermarket, I have duties and responsibilities imposed upon me, which involve continuous decisions being made, both consciously and subconsciously.

In the given assignment, I will be focusing on the various aspects of the decision- making process, the different kinds of decision-making tools and their utility and the tool used by me, differing on the prevailing situation. The impact of my decisions with reference to the organisational goals and business activities has also been discussed in the report. Woolworths Supermarket is a chain of grocery and supermarket stores based in Australia, operating through its 1000 stores comprising of 968 supermarkets and 19 convenience stores. The core function of the company is to offer groceries and few additional items like DVDs, magazines, household products, beauty products, stationery items, baby supplies, pet supplies and health and beauty products.

 

 

Concept of decision-making

The term “decision-making” has been defined as the procedure of selecting a specific action or course of actions from a group of two or more available options with the purpose to identify a solution for the known problem (Ford & Richardson, 2013).  Among the various options available, an option is selected after analysing the positive and negative aspect of each alternative, measuring their impact, logically judging them and forecasting the result of every option (Mihart, 2012). My job as the marketing manager demands me to undertake decisions that contribute in the optimal growth of Woolworths Supermarket and derive highest value from it products and services offered by the company.

Before taking the final decisions, I often consult my team members and the junior employees operating in my department. In addition, assistance from other professionals like the Finance manager and the Sales manager is also taken to understand every aspect of the business function; the problems faced and provide optimum solutions. To execute the process of decision making effectively, one requires combination of in-depth scientific knowledge, skills and experience. 

Decision-making focuses on the accomplishment of organisational goals and objectives in coordination with the mission and vision of the company. While performing my duties as the marketing manager, I have to monitor the effectiveness of my decisions and maintain the balance to ensure that Woolworths is growing in both linear and vertical directions. To a conduct a comprehensive decision making procedure, I follow the following steps:

  1. Define the issue
  2. Collect necessary information and data related to the problem
  3. Formulate various option and evaluate them individually
  4. Selection of the most favourable alternative
  5. Planning and execution of the selected option
  6. Initiating the planned course of actions

 

 

 

 

Importance of decision-making

The function of decision-making forms the spine of business management, as it is essential to take appropriate decisions at the right time for the functioning of the company (Hwang & Masud, 2012). As the marketing manager, I have to take decisions related to the marketing strategies of Woolworths, the various marketing and advertisement activities, promotion techniques to be used and various discounting offers to be provided to the customers. Failure on my part has a direct influence on the sales and revenue of the organisation. To give an example, Woolworths requires new marketing strategies to sustain its loyal customers and to attract new customers. In case my subordinates have developed a new marketing strategy and are waiting for my approval for its execution but I delay the decision process, then entire organisational process is delayed and adversely affected. Hence, decision-making is highly important due to the following reasons:

  • Optimum utilisation of resources- It ensures that the resources of the company namely money, labour, material, methods, machines, data are used in an optimum manner with minimum wastage and maximum utility at lowest costs (Sharma, Mithas & Kankanhalli, 2014). To ensure the effectiveness of every marketing strategy decision making process is highly useful for me so that business goals are accomplished without wastage of resources.
  • Selection of most favourable alternative- It helps in selecting most favourable alternative among various options after analysing them with use of accounting, statistical, financial and accounting tools. To give an example, in order to resolve the problem of customer retention, my marketing team developed two business strategies. One was to offer 25% discount and the other was to offer loyalty points, which would be redeemable. The decision making process helped+ me select the strategy to be used after analysing the after effects of each strategy, resources required and use of tools.
  • Analysis of managerial performance- It helps in assessing the performance of the managers as more appropriate is their selection and more beneficial to the company, it reflects their efficiency and contribution towards the company. Hence, the effectiveness of my decisions will show the senior managers my efficiency and efforts, based on which they analyse my performance. 
  • Encouraging the employees- Decision-making offers a proper guideline to the employees and the activities to be performed. A direction towards the execution of business operations helps me in encouraging employees and ensures completion of work within dedicated time span.
  • Essential element of business function- It is an integral part of the business function, as operations cannot be executed and organisation cannot progress without implementation of correct decisions. Therefore, to ensure that business operations are executed within the desired time span, I implement the decision making process.
  • Accomplishment of business goals- To perform within the given time and defined budget, I have to undertake decision making as selection of strategy ensures that resources are not wasted, keeps the employees satisfied and motivated and achieves the desired output.
  • Pervasive function- It is a persistent function as it always focused on accomplishment of organisational goals. All the managerial functions namely, “planning, organizing, motivating, directing and controlling” involve decisions to help the marketing, production, finance, research and development and personnel departments execute their functions (Orquin & Loose, 2013). Being the marketing manager I have to collaborate with different departments and decision making helps me in this.

 

 

 

 

 

Types of decision-making tools and their uses

In order to undertake effective decisions for the company, various tools of decision-making are available that help the managers in formulating strategic plans and selecting the right business strategy.  Before selecting a specific tool, various factors need to be taken into consideration, like utility of the tool, demand of the situation, effectiveness of the tool, to name a few. Few of the decision-making tools used by me in Woolworths have been discussed below:

  • Market Research – This tool of decision-making involves collection of necessary information before taking the final call. Information related to the potential customers, market condition, competitors operating in the market and others (Babin & Zikmund, 2015). It is a strategic tool and is essential as it gives me an insight of the customers, helps in developing strategies and taking decisions that fulfil customer needs.
  • Decision Matrix- This tool of decision-making is used for critically analysing the different alternatives present for taking a necessary business decision. The technique takes into consideration different factors affecting the business decisions. A table is created where all the available alternatives are written in the first column and factors affecting them in the next column (Perera et al., 2013). Each of the options is then scored and weighed reveal the most appropriate strategy. I use this tool in majority of the cases as it helps me identify the efficiency of various marketing strategies and selecting the most viable one.

Table 1- Decision Matrix

(Source: Perera et al., 2013)

  • Cost Benefit Analysis- This tool presents all the costs that will be incurred in the decision and the benefit offered by it to the company. As per this decision, rationally a manager would select that alternative that offers more net profit to the company. It focuses on the profit making aspect of business decisions (Boardman et al., 2017). This tool compares various business decisions from an economic perspective. Suppose, I have the option of two projects, one costing AUD 100,000 and incurring profit of AUD 105,000 whereas second costing AUD 85,000 and incurring profit of AUD 100,000, I would definitely select the second option as it is producing higher benefits.

Table 2- Cost Benefit Analysis Example

(Source: Boardman et al., 2017)

  • T-chart- Another tool for comparison to alternatives, a T-chart assesses the positive and negative aspects of every option and helps the managers in taking appropriate decisions.
  • SWOT Analysis- Sound decisions are made with the help of SWOT analysis tool. An abbreviation of strengths, weaknesses, opportunities and threats, this tool focuses on maximising the strengths of a strategy and elimination of weaknesses (Yavuz & Baycan, 2013). During the strategic planning process, this tool is highly preferred as it analyses the alternatives from different angles including opportunities and threats possessed. SWOT analysis tool helps me deal with the stiff competitors in the market and comply with government regulations while implementing various marketing strategies and plans.

Table 3- SWOT Analysis

(Source: Yavuz & Baycan, 2013)

  • Pareto Analysis- Also known as, the Pareto principle, the tool comes into use during big decisions being taken. According to this principle, 20 percent of the factors that contribute 80 per cent in the growth of the company are given highest priority (Kaliszewski, 2012). It helps in taking decisions based on the highest impact of the factors and offers huge benefits to the company.
  • Feasibility Study- The tool involves creation of a specific project and analysing it to judge whether it incurs profits or not. Feasibility study helps in identifying whether an particular project will help in accomplishing the business goals and objective, rationality of the business idea, profits to be incurred by the project and other prospects of the opportunity (Popovi? et al., 2012). The main use of this tool is during the introduction of a new service or product being offered in the market. To give an example, when Woolworths decided to offer online grocery shopping facility, an effective marketing strategy was required to generate awareness among the customers about its new business function, thereby ensuring that the company does not incur losses, if not profit at the initial stage. I used this tool to analyse the aspects of this business idea and develop a marketing strategy for the company to meet its objectives.
  • Stepladder Technique- This tool is used for deciding the entry of members in the decision making group. The main purpose of the tool is to motivate members take active part in presenting new ideas for the company (Watson, 2014). Since Woolworths is large scale company, the marketing department is also huge and comprises of large number of employees. Hence, it is not possible for me to consult every member for every decision, as it would only create confusion and delay the process.  As a result, I use this tool in selecting individuals for different situations and different business decisions.

Table 4- Stepladder Technique

(Source: Watson, 2014)

  • Starbursting- This tool helps in acquiring new ideas by conducting a brainstorming session with its focus on the questions, instead of the answers. I initiate brainstorming sessions within the department to identify new marketing strategies and to enhance the creative thinking skills of the employees.
  • PMI- An abbreviation for “Plus, Minuses and Interesting Points”, it helps in taking quick decisions, in case of issues that do not have major problems.
  • Paired Comparison Analysis- This tool is used to identify the relative importance and possibility of different alternatives, based on which decisions are taken.
  • Decision Trees- The tool of decision tree allows the managers to select a specific alternative after predicting the favourable course of actions of different alternatives. The course of actions and statistical probability is represented in the form of tree-shaped diagram with each branch of the tree depicting a probable business decision or incidence. According to the tree diagram, one selection results in another selection and so on and so forth. The branches are used to represent the mutually exclusive relation between various alternatives. The decision tree is a graphical model primarily used to contemplate the outcomes of different options (Ferrell & Fraedrich, 2015).

Table 5- Decision Trees Example

(Source: Ferrell & Fraedrich, 2015)

  • Six Thinking Hats- It is a highly powerful decision-making tool that helps an individual to judge decisions from different perceptions by going beyond the conventional thinking process by encouraging divergent thinking. While developing marketing strategies and selecting the most appropriate one, I use this tool. Majority of the marketing strategies are customer oriented, as the prime focus of every business strategy is to fulfil the demands of the customers and derive utmost satisfaction. Higher is the satisfaction of the customer, higher is their loyalty, high are the sales figures, higher revenue is generated and higher is the net profit (Kivunja, 2015). As every customer has its own perception and specific needs, I have to ensure that my marketing strategies are able to influence a mass number of customers in the same manner, being unaffected by the differences in their thought process.

Table 6- Six Thinking Hats

(Source: Kivunja, 2015)

  • 5 Why’s Techniques- This tool helps in recognising the core problem by asking various questions like “Why, what is the reason behind it,” and so on. The “Why” question is asked five times in a row, hence it is called five Why’s technique.
  • Delphi Technique- This tool is used to assess the favourability and result of the future events. It is unique in comparison to other techniques as it is a group activity where response is derived through questionnaires being given to individual members instead of conducting a physical group meeting. The developed questionnaires are based on the data acquired from previous questions and after reaching a consensus, the procedure ends (Hacklin & Wallnöfer, 2012). Despite the fact that it is a time consuming procedure, I use this tool when I found to understand the perception of all the employees of the marketing department regarding the proposed business idea.
  • Payback Analysis- This tool of decision-making is primarily used by financial managers. According to this tool, the a specific time span is needed for earning the funds invested in a business idea or to reach the “break-even point” (Ingram et al., 2012). The financial managers use this tool for evaluating the alternatives to capital purchases by ranking the time taken by every investment for paying back the initial cost. With the use of this tool, the fastest alternative can be selected. Based on this evaluation of the financial manager, I am able to identify the economic benefits of different marketing decisions.  
  • Simulations- The purpose of this tool is to replace and strengthen real experiences with directed techniques and is mainly used by operation managers. The tool helps in analysing the impact of individual elements in a given system. By studying the interaction between different variables and elements, the tool generates practical variability of different methods (Jonassen, 2012). Woolworths uses this tool in the area of logistics and supply chain and improvement and business processes.
  • Multivoting- In situations when the decisions are undertaken by a large group of people, this tool is used by shaping out a list of choices to derive a smaller list and finally making a final call. 
  • PEST Analysis- It stands for “political, economic, social and technological” factors that can help in enhancing the decision making process after understanding the impact external environment. The tool takes into consideration the current trends and help in identifying the future trends as well.
  • Conjoint Analysis- This tool is used by me for determining the preferences of the customers regarding a certain decision, strategy or activity performed by the company. A conjoint analysis is of important use to me as it helps study customer  behaviour and attitude, thereby help in developing effective and influential marketing strategies.

As the Marketing Manager at Woolworths Supermarket, it is my duty to conduct a market research for the organisation, formulate an effective marketing strategy, build customer relationship, build brand value, engage employees, recognise business opportunities and potential markets, coordinate the various business activities, introduce new services and products, to name a few. While performing these duties, I make use of various decision-making tools that have already been mentioned above. In some cases, I one specific tool is used whereas in some cases merger of different tools is used, based on the situation and demands, rationality and my personal intuition.

To give few examples, in order to build customer relationship, I make use of market research, six thinking hats, conjoint analysis and Delphi techniques.  Market research helps in gather reviews of the customers regarding Woolworths and its stores, goods and services and offers whereas six thinking hats and conjoint analysis helps me perceive customer behaviour. In addition,  the Delphi techniques are helpful to collect reviews of the employees towards the identified problem and their solutions. The results derived from these marketing strategies help me in formulating effective marketing strategy that resolves the identified customer problems, thereby builds customer relationship, encourages employee involvement and generate brand value.

In addition, the tool of stepladder technique is highly preferred by me when I require consultation form my team members for certain business activity. It highlights the efficiency of my team members as well as helps me in screening out the most favourable options. The decision making process also becomes faster with this tool. The feasibility study, decision matrix, SWOT analysis, PEST analysis, cost-benefit analysis and PMI tools are used when I have to take decisions regarding selection of strategy to be used. Based on the market research analysis, various strategies are developed for resolving the identified issue but not all the market plans can be implemented. To resolve an issue like increasing the social media presence of Woolworths, we can adopt strategies like more social media activities, giving discount and promotional codes on social media platforms, conducting surveys, make use of Google ads or continuously update the website. Each of these strategies have different outcomes and costs related to them, but the use of the above tools helps in resolving this issue and deriving to an appropriate decision.

 

 

Conclusion

The given report has presented the significant role of decision-making process in an organisation from the perspective of a marketing manager. In this report I have explained the concepts of decision-making, identified the various steps involved in the process and discussed about various tools and techniques used for undertaking decisions. In addition, I have given examples to offer an understanding of the manner in which a specific tool is used by me while conducting my duties as a marketing manager at Woolworths Supermarket.  In most of the situations, I use the tool of feasibility study, decision matrix, market research and six thinking hats to conclude to rational decisions.