Politics Of Organizational Decisions Making - Myassignmenthelp.Com

Question: Discuss about the Politics Of Organizational Decision-Making. Answer: Introduction: Decision-making is one of the integral part of the modern management system. Making of a rational and sound decision is one of the significant responsibilities of a consultant or a manger (Hwang and Masud 2012). The decisions make up as one of vital roles since it is fundamental in the determination of the operational and the managerial activities of an organization. It can also be defined as a course of actions that has been purposely selected to help an organization achieve its objectives and goals. Decision-making is a continuous and never-ending process that constantly works to manage the organizational activities (Zsambok 2014). This report deals with a case study to help understand and analyze the methods of decision making as well as the considerations that can be taken to make the relevant and rational decisions that can positively affect the performance and the operations of the organization. This report analyses about an industrial [product manufacturing company and its motive to introduce a new product along with the possibilities and certainties that can be considered to make the essential decisions related to its business and the operations. The purpose of this report is to help understand and analyze the crucial factors that need to be considered to make the significant and vital decisions in terms of managing the performance, productivity and the operations of the organization. Overview of the company and the situation analysis This case study revolves around the Conroy manufacturing Company, which was founded in the year of 1960, where it was established on a stagnant army base near Frankston, southeast of Melbourne. Initially the company was into the production of small-scale machinery and tools for the industry but it gradually shifted its operations to produced industrial paints, pre-fabricated garages and building materials, which gradually expanded in the 70s and the early 80s. the company consequently moved its head office in Dandenong, with the other established new operational units in Dandenong, Ballarat and west Sydney. However, the paint manufacturing department and the pre-fabricated unites have been ceased due to bad performance in the production. Finally, a new management team have been deployed that helped the company to adopt the Big data strategy and gradually started manufacturing consumer goods to keep up with the operations of the company, which included and electrical drill and car eng ine tuner. These were sold through do it yourself chains and hardware stores (Sethi and Zhang 2012). The statement of assumptions about the analysis Since the products, which have been manufactured previously had been successful in making its mark though the sales are comparatively smaller than in comparison to the other companies dealing with the same kind of product, the company grew confident enough and wishes to enter the market with a new product (Pettigrew 2014). The company decides to manufacture a new kind of advanced lawnmower with voice recognition system to alert and update the users. The estimated cost of research and development has been estimated to around $8 million and previously the market research and development of the design has already cost an amount of $2.5 million. Within the process, the company has decided to change the location of the production facility for the production of the lawnmower. The sites of production have been reduced to two. One of them is an old aerodrome and another one is an old textile mill that has been closed for two years. The textile mill would cost about $ 6 million for an immedia te purchase although the possession is a factor of probability in a couple of years, further more the mill requires further renovation, which would cost another $ 4 million. Since the mill requires a renovation, it is expected that the production would commence a year later. Therefore, if it is assumed that the product has been developed within the year of 2017, combining with possession and renovation, the production is likely to start in the year of 2019. However, if the development takes two years then the final production would carry out in the year of 2020. The probable factor that the estimated production in the Laverton site would cost about $ 24 million but the decision would be depended on the progress of the development (Zimmermann 2012). The key factors along with the approach The key factors that revolve around the case study have been briefly described. First, the both sites along with the investment that needs to be done as per the time being, including the facilities that would probably come along with the possession (Goodwin and Wright 2014). Second, the external factors that plays the significant role along with the incurring cost and the investment. The third factor is related to the investment and the time regarding the development of the product. The fourth factor is the concern of probability regarding the outcomes of the entire product development including the sales, the reimbursement of the investment that has been done as well as the prospect of the product in comparison to the competitors (Snyder and Diesing 2015). Fifth, in case the product does not meets the respective and the desired profitability what can be considered to recover the investment. The final and the most important factor that needs to be considered is the measurement of the entire flow of cash related to the entire project, including the success and the profitability that comes from entire project as well as the market response to the innovation (Yu 2013). The potential decisions, which will be taken based on the SMART analysis (Probabilities, Net value calculations and expected values) Scenario 1: Period Particulars 0 1 2 3 4 (in $ million) (in $ million) (in $ million) (in $ million) (in $ million) Initial Investment: Research Development Cost 8 Modification of Prototype 0 Purchase of Campbellfield Site 6 Mill Equipping Cost 4 Conversion of Laverton Site 0 Total Initial Investment 18 Market Condition Normal Normal Normal Normal Net Cash Flow from Operation 16 16 16 16 Total Net Cash Flow -18 16 16 16 16 Cost of Capital 10% 10% 10% 10% 10% Discounted Cash Flow -18.00 14.55 13.22 12.02 10.93 Net Present Value 32.72 Table 1: Net Present Value Sensitivity Analysis: Expected Values Cost of Capital Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5 Scenario 6 (in $ million) (in $ million) (in $ million) (in $ million) (in $ million) (in $ million) 5.00% 14.53 4.04 13.94 -0.41 2.34 -0.75 6.00% 14.04 3.88 13.43 -0.48 2.24 -0.80 7.00% 13.57 3.72 12.94 -0.55 2.14 -0.85 8.00% 13.12 3.57 12.47 -0.62 2.05 -0.89 9.00% 12.69 3.43 12.01 -0.68 1.97 -0.94 10% 12.27 3.29 11.57 -0.75 1.88 -0.98 11.00% 11.86 3.15 11.15 -0.81 1.80 -1.02 12.00% 11.47 3.02 10.74 -0.87 1.72 -1.06 13.00% 11.10 2.90 10.34 -0.92 1.65 -1.10 14.00% 10.73 2.78 9.96 -0.98 1.58 -1.13 15.00% 10.38 2.66 9.59 -1.03 1.51 -1.17 Fig2: Sensitivity Analysis Normal Scenario - 100% Site: Production from Expected Value: Probability 50% Campberfield Jan'18 $12.27M Cost $10M Good - 70% Completion Expected Value: Dec-17 $11.57M Probability 75% Cost $8M Probability 50% Site: New Product Development Laverton Production from Poor - 30% Cost $24M Jan'19 Expected Value: (-$0.75M) Site: Normal Scenario - 100% Probability 25% Completion Probability 50% Campberfield Production from Expected Value: Dec-18 Cost $10M Jan'19 $3.29M Cost $14.4M Good - 40% Probability 50% Site: Expected Value: Laverton Production from $1.88M Cost $24M Jan'20 Expected Value: (-$0.98M) Based on the facts and information as provided in the case study, the assumptions have been made accordingly to the SMART (Specific, Measurable, Achievable, Relevant and Time-oriented) method of analysis. The first scenario indicates the product development of Campbellfield site within December 2017. In this first scenario, initial investment needs $ 8 million and for purchasing Campbellfield site, the cost requires $ 6 million. Moreover, mill equipment cost was $ 4 million. However, for modifying prototype and for Laverton Site conversion, estimated costs were zero (Anderson et al. 2015). Hence, total amount of investment requires $ 18 million for initial level. Within this scenario1, the market condition is normal and the net present value is $ 32.72 million (Kacprzyk and Fedrizzi 2012). The probability to complete the product development of Campbellfield site is 75%, under scenario 1. Moreover, the probability to select the site is 50%. The cost for choosing this site is $10 million. Hence, expected value is $ 12.27 million. However, a project can continue for next year if it is not completed in the first year. For the second year, the research and development cost will be $ 8 mill ion. However, in the next year, the cost for modifying prototype will be $ 6.4 million. However, the cost for purchasing Campbellfirld Site and for conversing Laverton Site will remain same (Wild 2017). In the second year, the market conditions will remain normal. In the third scenario, product development of Laverton site is analyzed. The probability to complete the new product development of Laverton, within December 2017, is 75%. In this year, the initial amount of investment is $ 8 million. The conversion cost of this Laverton Site, is $ 24 million. However, other costs are zero. These other costs are modification of prototype; mill equipping cost and purchase of site are zero (Hwang and Lin 2012). These cost structure is equal for both good and poor market conditions (Xu 2015). However, for December 2018, the probability to develop new product is 25% for Laverton Site. In this year, the cost for research and development is $ 8 million. For modifying the prototype, the cost is $ 6.4 million. Moreover, the conversion of Laverton Site is $ 24 million. Here, the market condition is good. However, in the same year the market condition can be poor (Shields et al. 2015). The cost structure will remain same. From table 3, it can be said that, the totl probability of production is divided between two years. For the year 2017, the probability of completion is 75% and for the year 2018, the probability is 25%. Under 2017, the probability for site Campberfield is 50% and for LAverton, this probability is 50%. In this context, the probability to start production from the year 2018 is 100%. Here the expected values is $ 12.27 million. Based on the principles of SMART, the objectives have been clearly and briefly stated with the help of a chart. Specific Complete assurance regarding the successful completion of the prototype Complete reformation of the organizational operations related to the internal management such a strategic management, managing big data, understanding the flow of cash Identification and management of the flow of cash to manage and control the return of interest and the prospect of the company Understanding the liabilities of the failures, such as in case the product fails, what can be the necessary steps taken to mitigate the crisis, as well as the retrieval or the recovery of the invested capital Measurable The specific goal or the objectives related to the development of the product and the successful manufacturing can be measure with the month or yearly production report The sales and the further investigation of the product can be measure with the respective feedbacks and the sales report The objectives related to the return of the investment can be measured with the help of the yearly financial report and cash flow statement Achievable The achievable goals are to be attained using the marketing plan which is subjected to change over time depending on the effectiveness and the efficiency, based on the results The proper utilization of data for the progressive growth in the sales with help of effective planning also motivate the employees by using the methods of incentives and rewards Relevant The effective management of the staffs and the skilled workforce to help the in the production of the mower as well as proper utilization of the resources in the organization Proper understanding of the manufacturing expectations which does not exceeds the historical average and the ales coverage Time bound Calculation of the exact time of successfully creating the prototype of the mower as well as the managing of the extended research and synchronizing the time duration with the purchase of the other resources Effectively utilization and management of the time duration to prevent extensions and delays in the production due to last minute delays and rush Detailed discussions of the strengths and limitations of the analysis Based on the detailed analysis of Conroy manufacturing company the concern has been identified as well as the relevant suggestions have been provided. However, based on the analysis, there are certain strengths and limitations that can be defined and could delay the problem in actual application. First, the business plan is totally based on perception only the certainties of the issues that can possibly rise. Secondly, every complication is subjected to and highly dependent on the development of the product, such as the time divisions as well as the time taken for the development of the product, which is unpredictable and subject to a mere hypothetical calculation. Therefore, based on the circumstantial evidence, which is a possibility, the solution related to both the situations, is a considerable strength with limitation. Thirdly, even though the suggestions have been given in favor of the first site, based on the theories of management, the performance of the company in terms of p roduction is subjected to the activeness of the employees and the staffs (Hitt, Ireland and Hoskisson 2012). Fourthly, all the predictions that has been provided as an evidence are subject to changes depending on the effort of the company and its employees, including the management and the strategies. Fifth, the analysis that has been provided is a basic outline of the methods and the suggestions that can be used in the primary stage. However, this is subject to change based on the upcoming situations and scenarios, which the company might come across in the future. The limitation or potential bias One of significant limitation or a potential bias that the company has committed is the incorrect selections of the business that resulted in the blunder or the failure. The company did not engage in sufficient market research based on the requirements or the demands of the customers as well as the analysis of the competitors in the similar commercial activity. Some of the business like the manufacturing of paint and the pre-fabricated garage might have been successful but was completely subjected to the consumer demand (Solomon 2014). However, the diversification or the adoption of Big data was a limitation in terms of making an important decision but in the wrong phrase. Recommendations The suggestions can be given based on effectiveness and the practical management actions that can be taken at times of any crisis. The analysis have been done using the SMART method of analysis, which is one of the most crucial methods of evaluating the actions that can be taken by an organization to successfully mitigate any crisis as well as predict the possibilities of the desired outcomes. The practical recommendation that can be imparted to the company for the better performance is the careful selection of the product to amplify the sales and the business. The diversification or the adoption of Big data is certainly one of the vital methods to help a company generate financial gains over multiple business strategies but the relevancy of the business methodology needs to be precise and interrelated with each other (Marz and Warren 2015). The better performance and the productivity of the organization can be ensure of by the well management of the company and its managerial strate gies, since workforce or the staffs are one of the crucial factors that influences the prospects of the same (Goetsch and Davis 2014). Conclusion With the help of this report along with the analysis of the case study, it can be concluded that the Conroy manufacturing company has made good business and certain blunders due to the lesser and un-improvised methods of management. Even though certain strategies have been taken, that immensely helped the company to gather higher benefits in terms of financial gains. 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