DECISION MAKING

Decision-making can be regarded as a problem-solving activity terminated by a solution

deemed to be satisfactory. It is, therefore, a process which can be more or less rational
or irrational and can be based on explicit knowledge or tacit knowledge.

According to Lopez,
A decision represents a judgment; a final resolution of a conflict of needs, means, or
goals; and a commitment to action made in face of uncertainty, complexity, and even
irrationality

Case-1
THE FRUSTRATED PLANT MANAGER

Hemant Jha, the plant manager of a manufacturing company, attended a seminar of four
weeks duration, conducted by a reputed university. The seminar was devoted largely to
the topic of executive decision making.
During the seminar, Jha was particularly impressed by Professor Tripathis Lectures on
Group discussion & Group decision making. Professor Tripathi was convinced that
employee, if given the opportunities, could intelligently consider, and then formulate
quality decision.
Returning to the plant at the conclusion of the seminar, Jha decided to practice some of
the principles that he had learned. He called together the 25 employees of his
department and told them that the production standard established several years ago
were now too low in the view of the recent installation of automated equipment. He
wanted the employees to decide among themselves, as a group, what the new standard
should be.
Jha believed that employees would doubtlessly establish much higher standards than the
existing ones. But he was amazed when he came to know that contrary to his belief, the
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group considered the existing standards as already too high. And therefore decided to
reduce them by 10%. These standards, Jha knew, were far too low to provide a fair
profit on the owners investments. Yet it was cleared that his refusal to accept the group
decision would be disastrous. Before taking a course of action, Jha called professor
Tripathi at the University for his Opinion.

Summary

This case is about a plant manager of a manufacturing company, Mr. Hemant Jha who
attends a seminar for a month which was conducted by a reputed university. The topic
was based on Executive Decision-Making. Mr. Hemant liked the topic of groupdecision and decision-making so much! That he thought to apply the same formula with
his employee of his department. He wanted his employee to work as a group and
execute the work with a innovative standards giving a new outlook towards work. But,
unfortunately on contrary to his belief, the group considered the existing standard as too
high and thus they want to reduce it by 10%. These standards, Jha knew, were far too
low to provide a fair profit on the owners investment. And if he try to refuse the
groups decision a huge disaster would occur so before taking any action he decides to
revisit the university and asks them about an opinion to solve his problem.

Q.1 How could Jha have avoided the present difficulties?

Mr. Jha may have avoided the present obstacles by assisting the employees to work in
the existing standards without reducing it to 10%.
Making them realize about the companys investments loss so that they wont reduce
and try to work like in previous method.

Q.2 If you were a management consultant, what advice would you give to Jha?

If I were the management consultant I would have advised Mr. Jha to observe the
employees work standards and understand as to why they are not able to cope up with
new innovative standards.
First to identify the problem related to employees paradigm towards work then only i
can able to suggest them a new outlook which will satisfy them and of course Mr.Jha
too.....

Conclusion

So here we conclude that at times the manager should even as an employee must
understand the core value of the standards been given to employee. If the
standards are too high a proper training should be given to them so that theyll be
much active and dynamic to work on new standards without refusing it.. Rather
consulting directly to the third-party the manager must first recognise the problem
then only he should seek advise regarding to his company.

CASE -2
INTERNATIONAL CASE : CARREFOUR WHICH WAY TO GO?

Wal-Mart's biggest global competitor is the big French retailer Carrefour, a firm that has
hypermarkets, big stores offering a variety of goods. It has made large investments
around the globe in Latin America and China. But not all is well as competitors taking
market share it its home market, for instance. There has been even speculation of a
takeover by Wal-Mart or Tesco, an English chain. Mr. Barnard had been ousted after
heading the company for 12 years and was replaced by Jose Luis Duran, Who is of
German-Spanish descent. Although the global expansions cited by some as success, it
may be even a big mistake. It withdrew from Japan and sold 29 hypermarkets in
Mexico. Carrefour also had problems competing with Tesco in Slovakia and the Czech
Republic. In German, the company faced tough completion from Aldi and Lidletwo
successful discounters. On the other hand, it bought stores in Poland, Italy Turkey, and
opened new stores in China, South Korea, and Columbia, Carrefour has become more
careful in selecting markets. The company is eager to enter the Indian market but found
in late 2006 that Wal-Mart will do so as well.

In France, where Carrefour is well established, the company made the big mistake in its
pricing policy. It probably started with the 1999 merger with Promodes (A French
discount chain). Carrefour confused the French clientele by losing its low-cost image;
whether the image can be changed remains to be seen. Mr. Duran, the new CEO since
2005, embarked on the new strategy by offering 15% new products in its hypermarkets
and 10% in its supermarkets. Moreover, he wants to employ more staff, extend the
operating hours in certain hypermarkets, cut prices, try small stores, and push down
decision-making. Mr. Duran aims to stay only in countries where Carrefour is among
the top retailers.
Questions
1. How should Mr. Duran assess the opportunities in various countries around the
world?
2. Should Carrefour adopt Wal-Marts strategy of low price everyday? What
would be the advantage or disadvantage of such a strategy?
3. How could Carrefour differentiate itself from Wal-Mart?
4. Identify cultures in selected countries that need to be considered in order to be
successful?

Summary
This case is all about Carrefour a French multinational retailer founded in January 1,
1958 which is headquartered in, France. Its a firm that has hypermarkets, big stores
offering a variety of goods. It is one of the largest hypermarket chains in the world, the
fourth largest retail group in the world in terms of revenue (after WalMart, Tesco and Costco), and the third in profit (after Wal-Mart and Tesco) . It had
made investments largely around world in Latin America and China. There has been a
rumour of a takeover by Wal-Mart or Tesco, who are global rivals of Carrefour.
Mr. Barnard who was controlling the company for 12 years was expelled and was
replaced by Jose Luis Duran, Who is of German-Spanish background. Even though the
global expansions cited by some as success, it can also be a big mistake. It left from
Japan and sold 29 hypermarkets in Mexico. Carrefour also had problems competing
with Tesco in Slovakia and the Czech Republic. In German, the company faced tough
completion from Aldi and Lidletwo successful discounter retail stores. On the other
side, it bought stores in Poland, Italy Turkey, and opened new stores in China, South
Korea, and Columbia; Carrefour has become more alert in selecting markets. The
company is eager to enter the Indian market but found in late 2006 that Wal-Mart will
do so as well.
Carrefour is well established in France, but the company made the big mistake in its
pricing policy. It probably started with the 1999 merger with Promodes a
former French group of retailers, one of its major competitors in the French market.
Carrefour confused the French customers by losing its low-cost image.
Mr. Duran, the new CEO since 2005, started on the new strategy by offering 15% new
products in its hypermarkets and 10% in its supermarket. And he wants to employ more
staff, extend the operating hours in certain hypermarkets, cut prices, try small stores,
and push down decision-making. Mr. Duran targets to stay only in countries where
Carrefour is among the top retailers.

Q.1 How should Mr. Duran assess the opportunities in various countries around
the world?
Mr. Duran should assess the opportunities in various countries by

Defining business plan for accessing global markets

International business plan is important in order to define your company's present status
and internal goals and commitment, but it's also necessary if you plan to measure your
results.

Conduct market research to identify your prime target markets.

You want to find out where in the world your product will be in greatest demand.
Market research is a powerful tool for exploring and identifying the fastest-growing,
most penetrable market for your product.

Search out the data you need to predict how your product will sell in a specific
geographic location
Prepare pricing and determine your landed costs
Be ready to test out your price on your customer. See what reaction you get and then
negotiate from there.

Implement an extraordinary after-sales service plan.

The relationship between your company and your overseas customer shouldn't end
when a sales is made. If anything, it should be just the start of a long relationship which
requires more of your attention. The "care and feeding" of your customers will
determine if they keep coming back for more.
Make personal contact with your new targets, armed with culture-specific information
and courtesies, professionalism and consistency
Your goal should be to enter a different culture, adapt to it and make it your own.

Determine how much you can afford to invest in your international expansion
efforts.
Will it be based on ten percent of your domestic business profits or on a pay-as-youcan-afford process?

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Q.2 Should Carrefour adopt Wal-Mart's strategy of "low prices everyday"? What
would be the advantage or disadvantage of such a strategy?
In our view Carrefour adopting Wal-Mart's strategy of "low prices everyday" will increase the
turnover. It will attract more people to visit the store frequently will result in more profit.
ADVANTAGES

Low pricing results in higher revenues people tend to purchase more when low pricing
strategies are executed.
(EDLP) everyday low prices strategies generally result in lower fixed costs, since they require
less advertising for promotional prices, less labour to execute price changes. Advertising is less
expensive with an everyday low pricing approach because a retailer does not need to promote
each individual sale item.
Competitive advantage in the retail market competition and leads more and more competitors
to imitate.
DISADVANTAGES

Always being the lowest-priced supplier sometimes creates the perception that your product
quality is lower than that of the competition. Some consumers might assume that renovated
products are the means by which you maintain your low prices. Quality-conscious customers
may avoid stores with everyday low pricing strategies.
Insufficient profit margin for discounting- If you struggle to have the lowest prices at all times,
you may not have sufficient profit margin to offer further low prices for promotions or
discounts.

Q.3 How could Carrefour differentiate itself from Wal-Mart?

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Wal-mart

Carrefour

Wal-mart was founded by Sam Walton and The second largest retailer
his brother, JamesBud Walton, in
in the world after Wal-mart,Carrefour had
1962
humble beginning in the summer of
1960
Revolutionized discount retailing, with the It was an initial test of the on-stop shop
result that by
formula whereconsumers could get almost all
1989Walmart was the worlds largest retailer of their shopping needssatisfied at one
location
Proposition was simple: Deliver a wide 1969:
array of merchandiseat discount prices Move into
topped up by a friendly service
Belgium,
began its internationalization
1999: Merger
with
Promodes
First Wal-mart Discount City store in Rogers, The stores were located mostly in
Arkansas
France
but also throughout
Europe, Asia,
and
Latin America
Waltons operated a number of franchised
stores from thechainrejected a suggestion
to open discount stores in smalltowns

Discount City store concept consisted of

servicing small andmiddle sized towns at
prices equal to or lower than prices innearby
cities

Invented hypermarket concept

Usually located within a commercial
center

Location strategy:
-Place stores outside towns in areas where
highways provided easyaccess and land
could be acquired inexpensively

1972:
High degree of consumer acceptance ->
Build a warehouse that allowed him to buy fuelled Carrefours growthstemmed
largevolumes of merchandise at lower prices.

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Strategy of covering small towns, virtually

ignored by other competitors, the expansion
progressed rapidly without anysubstantive
direct competition until the mid 1980s.

Product strategy:Any product a consumer could think of

purchasing more than once a year could be
bought at Carrefour store

1993:Wal-mart was in 47 states and its Price strategy: - Prices averaged 5 to 10

expansion
led
tocompetition
with percentage points under those of retailers in
kmart, Target,
Sears
and
J.C. traditional outlets
Penney, for which the established players
were ill prepared

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Q.4 Identify cultures in selected countries that need to be considered in order to be

successful?
Germany and Poland both countries are successful with respect to their cultures.
Germany
Cultural awareness or cultural knowledge is becoming increasingly important in today's global
economy.
Germans place a high priority on structure, privacy and punctuality. The German people embrace the
values of economy, hard work and industriousness and there is great emphasis on making sure that "the
trains run on time."
Germans are stoic people who struggle for perfectionism and accuracy in all aspects of their lives.
They do not admit faults, even jokingly, and rarely hand out compliments.
In many aspects Germans can be considered the masters of planning.
Germans believe that maintain clear lines of demarcation between people, place and things is the surest
way to lead a structured and ordered life.
Germany is heavily regulated and extremely bureaucratic.
They prefer to get down to business and only engage in the briefest of small talk.
They are detail-oriented and want to understand every statement before coming to an agreement.
They do not need a personal relationship in order to do business.

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Poland
Polands strategic position in the heart of Europe and its strong and still-growing economy has made it
an attractive destination for foreign businesses.
The Polish population generally has a strong work ethic and is well educated, and business culture in
Poland is not that different to what expats may experience in other European countries.
Business culture in Poland is formal. While Poles tend to be reserved, their communication style is
direct; eye contact should be maintained at all times as it is seen as a sign of respect and trust. People
are expected to say what they think and address matters directly.
Rules and regulations are respected, and should be followed to. Personal relationships are important
and anyone doing business in Poland should aim to build close and trusting relationships with their
Polish associates, as this is a stepping stone to building strong business relationships.
Business structures in Poland are hierarchical and the style of management requires at times been
described as authoritative; decisions are made from the top and authority is respected.

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CONCLUSION
From this case we conclude that Carrefour is one of the biggest retailer company in
France. They invest lot in market share and also earn large amount of profit.
But they made one big mistake that is they adopting low price policy like Walmart do
and due to this they lost their image and customers after company new CEO that is Mr.
Duran, he decided to adopt new strategy and decide to offer 15% in hypermarket and
10% in supermarket. For this he requires more man power equipment and working hour.
He also decides to do business in only those countries where Carrefour is or will bea
success.

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STRATEGIC PLANNING

Strategic planning is an organization's process of defining its strategy, or direction, and

making decisions on allocating its resources to pursue this strategy

Strategic planning is an organization's process of defining its strategy, or direction,

and making decisions on allocating its resources to pursue this strategy. It may also
extend to control mechanisms for guiding the implementation of the strategy.

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CASE-3
GOAL SETTING

Bharat Engineering works Limited is a major manufacturer of industrial machineries

besides other engineering products.it has enjoyed considerable market preference for its
machineries because of limited competition in the field. Usually there have been more
orders than what the company could supply. However, the scenario changed quickly
because of the entry of two new competitors in the field with foreign technological
collaboration. For the first time, the company faced problem in marketing its products
with usual profit margin. Sensing the likely problem, the chief executive appointed Mr.
Arvind Kumar as general manager to direct the operations of industrial machinery
division. Mr. Kumar has similar assignment abroad before coming back to India.
Mr.
Kumar had a discussion with the chief executive about the nature of the problem being
faced by the company so that he could fix up his priority. The executive advised him to
consult various heads of department to have first hand information. However, he
emphasised that the company locked an integrated planning system while members of
the board of Directors insisted on introducing this in several meetings both formally and
informally.
After joining as general manager, Mr.Kumar got briefings from the heads of all
departments. He asked all heads to identify major problems and issues concerning them.
The marketing manager indicated that in order to achieve higher sales, he needed more
sales support. Sales people had no control organization to provide sales support nor was
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there a generous budget for demonstration teams which could be sent to customers to
win business.
The production manager complained about the old machines and equipments
used in manufacturing. Therefore, cost of production was high but without
corresponding quality. While competitors had better equipments and machinery, Bharat
engineering had neither replaced its age old plant nor reconditioned it. Therefore to
reduce the cost, it was essential to automate production line by installing new
equipment.
Director of research and development did not have specific problem and,
therefore, did not indicate for any change. However, a principal scientist in R&D
indicated on one day that the director of R&D, though very nice in his approach, did not
emphasise on short term research projects, which could easily increase production
efficiency by at least 20per cent within a very short period without any major capital
outlay.

Discussion questions
1. Discuss the nature and characteristics of the problems in this case.
2. What steps should be taken by Mr.Kumar to overcome these problems?

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SUMMARY

This case study all about the Bharat Engineering works Limited is a major manufacturer
of industrial machineries besides other engineering products. The company was only
single in the market. However, the scenario changed quickly because of the entry of two
new competitors in the field with foreign technological collaboration. First time
company was faced the problem with them product and marketing. Sensing the likely
problem, the chief executive appointed Mr. Arvind Kumar as general manager to direct
the operations of industrial machinery division. Mr.Kumar has similar assignment
abroad before coming back to India.
The executive advised him to consult various heads of department to have firsthand
information. The board of Directors insisted on introducing this in several meetings
both formally and informally. After joining as a general manager Mr.Kumartold to the
all heads to identify major problems and issues concerning them.
The marketing manager indicated that in order to achieve higher sales, he needed more
sales support. The production manager complained about the old machine and
technology. cost of production was high but without corresponding quality. Director of
research and development did not have specific problem and, therefore, did not indicate
for any change.

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Q.1 Discusses The Nature And Characteristics Of The Problems In This Case.

Bharat engineering company only one company in the market for the industrial machineries and other
engineering product.
It has enjoyed considerable market preference because of limited competition in field.
Suddenly two competitors enters in the field thus, the company faces competitive factors as problem in
marketing its products with usual profit margin.
The Company has lacked integrated planning system. The general manager asks all the departmental
heads to identify problems and issues.
The Company is facing both the internal and external environmental obstacles.

Company has two competitors

The Company had lack of sales support and lack of budget for demonstration teams. Which
could be sent to customers to win profit.

Moreover the production department has old machines and equipments.

Research and development department did not emphasise on short term Projects which can easily
increase efficiency.
Thus, the company is suffering from both the internal and external factors
This leads company to live in usual profit margins.

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Q: 2 what steps should be taken by Mr. Kumar to overcome these problems?

1: To overcome these problems Mr.Kumar should apply and implement

Short run planning and project which can improve productive efficiency
At least 20% with out any major capital outlay.

2: Mr. Kumar should identify the companys strenghs and weakness and
Evaluate them.

3: Mr. Kumar should try to give more better services , products with good
Quality. And build up strategies for a short period of time.

4:with the strategic planning Mr. Kumar should built up co-ordination among
All the departments.

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CONCLUSION

The company should format strategic planning for short term period to over
Come managerial problems and should necessary steps for raising or improving
Technical and productive efficiencies and also establish another alternatives
If one alternative cannot success.

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