Managerial Decision Making Action Making Process

Question: Describe about the Managerial Decision Making of Action Making Process. Answer: Introduction: Managerial decision making is the process of selection by an authoritative person from various sets of alternatives, outputs or ideas, and taking suitable action. The 'action making' process consists of four steps, which are, identifying the problem, generating solutions for the problem, analyzing and choosing among the available solutions, monitoring the selected solution. The managerial decision making process revolves around four tasks, which are, planning, organization, leading and controlling. It centers on the problems like Crisis, Non-crisis, and Opportunity problems. The crisis problem refers to the serious challenges which require immediate attention (Bauer et al. 2013). A non-crisis problem claims resolution but does not have the immediacy components of a crisis. Opportunity problems are related to those circumstances which offer a strong potential for important organizational gain if proper actions are taken. The decision making process is divided into two ways, programmed and non-programmed (Tengblad 2012). Programmed decisions are taken under planned decision rules, and non-programmed decision making happens when the circumstance is comparatively ill-structured. The organization and its problem: The organization chosen here is Woolworths Limited. It is a major Australian company, having a massive share in Australia and New Zealand's retail markets. After Wesfarmers, which is a Peru-based retail focused conglomerate, Woolworths is the second largest company in both Australia and New Zealand, by revenue. It had opened its first store in Sydney in the year 1924. In the year 1985 Woolworths took over 126 Safeway stores in Eastern Australia. It made the organization the largest food retailer in the country. Since then, the organization spread its branches all over Australia, New Zealand, and now introduced its stores in India. The primary services by the organization include supermarkets under the organization's brand, liquor retailing, hotels and pubs, and discount departments. It is a public firm, with most of its shares distributed among the citizens of Australia (Arli 2013). The organization is facing some serious problems currently like a damaged public image and loss in revenue due to the lack of foreseeing, in the market demand scenario. It has triggered a chain of other issues like firing employees and incurring losses in both monetary terms and human resource. The organization is already looking for answers and taking measures to get out of this situation. The managerial decision making is playing a huge role in this situation. The authorities are addressing the problems at a time. As the problems are inter related, it is expected that solving the primary problem will have a trickledown effect on the other disturbed scenarios of the company. Although this process is time consuming, the authorities have seeing the urgency the situation demands. If the organization takes too much time in clearing these back logs, the future holds more thorny ways for it (Guerrero 2013). Problem definition: list of the symptoms: The organization is facing problems followed by the milk crisis in Australia. These problems came through a series of international choices made by the governments while facing some international difficulties. Australia has a large exporting milk industry. One of the major importing countries of the milk products sold by Australia was Russia. The sudden change of plans in international scenario led to a series of crisis in the domestic market of Australia affecting the organization, as it was operating in the local market at a large scale. Russia in August of 2014 announced a full trade embargo on agricultural imports. It includes dairy products as well. The reason behind this decision was related to the sanctions referred to the Ukraine conflict. It had a large impact on Australia's export market. Before the ban, Australia exported more than 600,000 tons of dairy products to Russia. This caused a series of problematic symptoms of oversupply in the domestic market, making the price o f milk products sold by the Woolworth go down by a huge margin (Lawrence Richards and Lyons 2013). This situation, in turn, took effect on the farmers operating in the domestic market (Buonanno and Nugent 2013). The company came in a war with the local farmers to survive in the market by slashing its prices. It caused damage to the Woolworths Limiteds public image. The oversupply of milk got worsened by the major decision taken by European Union in the form of removed Quota on milk production (Beetham and Lord 2014). This made the market faced by Woolworths more competitive. The issue the organization is facing thus is pointed towards the forecasting department of Woolworths (Besley et al. 2013). Solution generation: Woolworths now can address these issues both externally and internally. Externally, the higher authorities of the organization can approach the Government of Australia to create a price floor for the dairy products, under which there will be no selling of those products. This will save both the organization and the local farmers, who are in grave danger due to this crisis. Internally the firm has to build a stronger forecasting group which will act faster when crises like this appears. To get this strong forecasting group, the organization has to change its hiring policy. More personnel from economics background with sufficient experience are needed to fill up the gaps in the forecasting group. They will understand the international as well as the domestic relations faster, giving the firm ample time to rethink its strategies and address the customers. Moreover, a damaged public image has a negative correlation with the demand a firm faces in the market. Therefore, new personnel for public relation are also needed in the Human Resource department, who can handle the pressure that had built up in the market. A new market research team has to be appointed as soon as possible to evaluate the situation properly and get the data needed to make improvements in this situation (Moore 2015). The new research team, along with the old ones has to be linked with the forecasting group to assure better results. The research and development team of the firm should look for other opportunities to use the oversupply of milk. New dairy products hitting the market will clear up more inventories of the firm, keeping the market imbalances at a new equilibrium. The Woolworths workers who were employed in exporting dairy products is facing hug challenges in keeping their job in the company. The organization must look for other positions within the company to absorb these people and engage them in a productive market system (Gouran 2015). Solution evaluation: The forecasting team will give support to the production houses in understanding present and future market demand, as the production process and the revenue related to it depends on them significantly. The hiring team should keep in mind the opportunity of engaging efficient personnel in all the fields of production in the organization. More efficient worker will produce more effective results in the retail market as well as in other scenarios where public image plays a vital part. The research team will help the forecasting team and the team handling the companys public image. Data collected by the market research team along with the forecasters utility will tell the organization what to produce, how much to produce and to what quantity (Png 2013). This new research team can also extend its support to the research and development team as well. The excess supply of milk can be converted into many other products. The both these teams together can find out the market demand for the new products the domestic and international market holds. The company can share this information with the local farmers for betterment of the supply sources outside the companys raw material supplier circle. This will help the organization as well as the farmers. It will, in turn, improve the public image of the company. The employees who were previously engaged in the export of the dairy products in Europe and Russia have to be employed in a productive process of the company. This will save their jobs as well as reduce the cost of future employee searching operation. By hoarding these skilled workers the company will gain a competitive edge against the rival firms. The external solution needs the higher authorities to take the initiative (Matthews 2013). The government policy makers are looking for answers to solve the present milk crises problem. A price floor will save the farmers who are still fighting in the market for survival. This process will directly and indirectly help the o rganization to increase its revenue in the near future (Fletcher 2013). Implementation and action plan: The proposal for price floor to the government hast to be given by the authorities as soon as possible. The matter has urgency due to the large set of population involved in the primary sector of the country. Thus, hiring professionals has to be started immediately. Along with the new faces joining in Woolworths the market research will hit the system (Berglund and Sandstrm 2013). It will reveal the efficient paths of production for the organization. In the mean time, during the first month the workers who were working in the exporting area of the company will be moving to other productive sources. The whole process of workers mobility process should be done by the end of the seventh month. This way the company will achieve efficient allocation of resources. The forecasting team will start working from the 5th month with the help of the market research team to assess the future possibilities as well as find solutions for the present situations. The following table shows the action pl an for next 10 months. Sl no. List of actions 1st and 2nd weeks 1st and 2nd months 3rd and 4th months 5th, 6th and 7th months 8th month 9th and 10th months 1 Price floor proposal 2 Hiring new personnel 3 Market Research 4 Forecasting by the team 5 Worker mobility 6 Product innovation Table 1. Action plan for the managers of Woolworths. Source: As created by the author. The table above shows the six plans which are available for the next ten months to the organization. The total time needed by the company to run the whole process is 10 months. The actions on price floor proposal to the government and the new personnel hiring policy should be taken at first. The next policies will be moving smoothly through the planned path. The whole recovery of the organization and the local farmers are depending on the following 10 months. If everything goes according to the plan, the eighth month will be the ideal month for the research and development team to start the innovation process (Clampitt 2012). The knowledge acquired by the market research team will be helpful in this process. The innovation process will help the company to survive through the coming tough times and stay ahead of the competitors. The innovations will absorb the excess supply by the local farmers (Johansson and Fransson 2012). Absorbing the products of the local farmers will help the fa rmers as well. The manager and the authorities have to keep their eyes on the whole process throughout these 10 months to yield the optimal outputs. Conclusion: Woolworths Limited along with other retailers and local farmers is facing a downfall in the domestic and international market of dairy products. The government has to be included in order to come out this trapping situation. The organization can play a vital role in this process by being the first mover. The internal strategies are needed to help the company survive through this tough time. The organization can take the above mentioned plans to keep the company afloat. Price floor proposal, Hiring new personnel, Market Research, Forecasting and Worker mobility are the only current available options for the organization to keep a floating production process and a healthy public image. The product innovation is recommended to stay ahead of the competitors both in present and in future. The Human Resource department of the organization is going to play a crucial role in the coming days, as the process of hiring efficient personnel will keep going for next 10 months. The market research team also has an important place in the planning. The mobility of workers has to be done by the end of the seventh month of the planned period, which gives a small time period to the production process to absorb the new system. References: Arli, V., Dylke, S., Burgess, R., Campus, R. and Soldo, E., 2013. Woolworths Australia and Walmart US: Best practices in supply chain collaboration. Journal of Economics, Business, and Accountancy| Ventura, 16(1), pp.27-46. Bauer, J.C., Schmitt, P., Morwitz, V.G. and Winer, R.S., 2013. Managerial decision making in customer management: adaptive, fast and frugal?. Journal of the Academy of Marketing Science, 41(4), pp.436-455. 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