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Study Notes

Influences on Decision Making

AS, A-Level
AQA, Edexcel, OCR, IB, Eduqas, WJEC

Last updated 15 Apr 2017

The approach taken to making business decisions is influenced by a variety of factors, the key ones of which are outlined below:

Business Objectives / Budgets

  • Set the scene for how decisions are made
  • A culture of strong budgetary control should encourage more data & evidence-driven decisions

Organisational Structure - Who Makes the Decisions?

  • Who has authority to take decisions?
  • Are employees to empowered to take decisions to deliver more responsive customer service
  • Is decision-making centralised or decentralised?

Attitude to Risk

  • Close link to business culture
  • Is risk-taking encouraged?
  • What are the penalties for poor decisions?

Availability & Reliability of Data

  • Is the data available to support a scientific approach?
  • Are management comfortable with using scientific methods? Do they have the right skills and experience?

The External Environment

  • How fast is the external environment changing?
  • Do the uncertainties in the external environment make scientific approaches less reliable?

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