Management: Decision Making and Case Study

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Faculty of Business, Economics & Accounting Department of Business Studies

HELP Bachelor of Business Year 1 (HONS) – HUBBU

CASE STUDIES Semester 1, 2011

Subject:

MGT 101 Principles of Management

Subject Lecturer/ Tutor(s):

Puan Norzan Abdullah

ANALYZING A CASE STUDY STAGE 1: QUICKLY GO THROUGH THE GENERAL SCENARIO PRESENTED TO GAIN A GENERAL UNDERSTANDING OF THE SITUATION.  Underline/highlight information which may indicate problems exist STAGE 2: EXAMINE THE QUESTIONS CAREFULLY  Read the questions several times-work out what is asking of you STAGE 3: READ THE CASE AGAIN VERY THOROUGHLY  Look for evidence STAGE 4: PLAN YOUR ANSWER-SOME GUIDELINES     You must be able to cite evidence (s) to support your arguments Apply your knowledge of theories to evidence assembled Draw legitimate inferences about matters not explicitly stated Make concrete recommendations- avoid vague conclusions

STAGE 5: WRITE YOUR FINAL ANSWER  Express your ideas in your OWN words – do not simply paraphrase what you read; be selective in what you quote from the case.

CASE STUDY 1 : DECISION MAKING PROCESSES AT STEEL INC. John Pieterson and Jack Gack are both employees at Steel Incorporated. The company counts more than 5,000 employees and has a presence in almost all European countries. Steel Inc. transforms bulk steel into smaller components, ready to be used in consumer products. Products range from toy parts to food cans. Like most steel companies, Steel Inc. is a traditional company characterized by a low level of flexibility and high levels of bureaucracy. The company has several branches and subsidiaries located all over Europe in order to stay close to its customers. The decision-making processes at Steel Inc. are crucial to the company’s operations. Once a customer (new or existing) approaches the firm, decision making has to happen at a quick pace. Obviously, decisions with regard to level of customization, speed of manufacturing, and prices determine which of the competing companies gets the order. When making a proposal, a huge of factors must be considered. Not only does all internal information have to be considered, but external information have to be considered, but external information such as competitors’ proposals also must be taken into account. If Steel Inc. takes too long to deliver a clear proposal, cannot deliver the demanded products fast enough, or bids too high, competitors will seal the deal. Although Steel Inc. has gone through some changes, the bureaucratic structure still has a big impact on the jobs of both Pieterson and Gack. John Pieterson is a manager at a subsidiary in The Netherlands. In formulating a proposal or bid for a customer’s order, he can be characterized as a very rational person. Although he takes somewhat longer than his colleagues to do similar work, he has always secured a lot of customer orders and is therefore considered a very successful manager within the company. However, Steel Inc.’s success in recent years has affected his decision making. He now drafts a proposal faster, but he also considers less information. In some cases, he even takes competitor prices as a starting point and simply adapts those a little. Still, the change does not seem to harm his performance, and orders keep coming in. Jack Gack, located at a branch in Finland, performs the same job as Pieterson. However, Gack is very unsuccessful lately. Of course he makes rational decisions, but he also includes a fair share of intuition. Although often criticized, Gack is not willing to go of his intuition. He truly believes that external factors contributed to his bad performance. Subordinates have also started to talk about Gack’s possible incompetence. Top management has looked at Pieterson’s success and now wonders whether to impose that style on Jack.

QUESTIONS 1. Which biases in decision making can be identified in the performances of both Pieterson and Gack? How can the identified biases...
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