Thousands
of decisions are made every day in companies. Each of them is located at
different hierarchical levels – for example , a storekeeper may decide to order
new products , a general manager may decide to proceed with the purchase of a
competitor in difficulty . In addition, the decisions concern different types
of activities: commercial, administrative, financial and other decisions can be
distinguished. In fact, no decision is identical to another: every decision has
a different impact on the operation, the profitability, the performance is
sometimes even the survival of the company. In a small company, the
entrepreneur is the sole decision-maker for both the internal operation of the
company and for external relations. In large companies, on the contrary, there
is necessarily a large number of decision-making centers because it is
impossible to take all the decisions on. Delegating powers becomes necessary. When
the delegation becomes so important that it is part of the very structure of
the company, it will be called decentralization (the delegation is a “case” of
people whereas decentralization is a “matter “of structure ). In this chapter,
it is therefore necessary first to describe the different types of decisions
and then to question the nature of the decision process of a second step.
Finally, we will discuss the tools for decision support.

I – Les différents types de décisions au seins d’une organisation

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From
the point of view of the degree of risk attached to decision-making , we speak
of ” certain ” decisions , ” random ” decisions , and
uncertain decisions . For certain decisions they are characterized by a zero
risk insofar as the outcome of the decision-making is known in most cases .
Note , however , that a completely zero risks does not exist . Certain
decisions are often the least important decisions, the day-to-day management
decisions . Random decisions are a little less certain than decisions that are
certain but a little more certain than uncertain decisions . To give a slightly
clearer definition , a decision is called ” random ” when certain
variables are not completely controlled by the company but are known through
probabilities . When a variable is known in probability , it is a random
variable that is to say a variable which one knows that there is this or that
probability so that it takes such value . When variables are involved that are
not controlled by the company , or even probabilizable because of the too
complex environment and conditions of market evolution , we will speak of
” uncertain ” decisions . These are often the most important decisions
(strategic decisions).

According
to the IGOR ANSOFF model , there are traditionally three major types of
decisions in the order of importance :

– Strategic decisions . These are the most important decisions that are
those that determine the general direction of the business . They are at the
top of the hierarchy .

 – Tactical decisions . They
follow the strategic decisions and command the operational directorates .

– Operational decisions . These are the day-to-day management decisions
that correspond to the least important decisions .

Strategic
decisions are indeed the most important decisions in that they determine the
general direction of the company and sometimes even condition its survival .
These may include , for example , investment decisions that have far-reaching
consequences , or decisions to launch new products , financial decisions such
as an equity investment or the launch of a merger , absorption or other , these
are ultimately the most uncertain decisions . The main characteristics of
strategic decisions are that they are all centralized at a high level , that
they are non-repetitive and engage the company in the long term . In fact , it
is not every day that a company carries out a capital increase , an
establishment of a production unit abroad , or a new product launch . As we
have seen above , these decisions are always uncertain because external data
onto the environment are sometimes difficult to know perfectly and , most
importantly , change very often . Tactical decisions extend strategic decisions
and dictate operational decisions . These decisions are likely to be
decentralized . For example , it can be said that a decision made by a leader
in a company such as a director of human resources is a tactical decision .

 

Operational
decisions often correspond to management decisions that can sometimes be
supported by models (quantitative market research technique , BCG matrix ) . In
general these decisions engage the company in the medium term and the risk
attached to the decision making , without being negligible is never vital for
the company . These are decisions that relate to day-to-day management . In any
case , they are never vital to the future of the company . This is to ensure
the day-to-day regular and efficient operation of the organization . It may be
, for example , placing orders , establishing a workshop schedule or organizing
customer visits . These decisions are , of course , repetitive in that they
have an immediate effect and their results are known with certainty (they are
therefore ” certain ” decisions ) . In principle , they commit the
company only in the medium term

It can therefore be said that decisions affect the entire company . Depending on their nature , decisions can be quantitative or qualitative . The easiest decisions to make are those for which decision factors are both smalls and quantifiable . The choice can then be made automatically using a statistical mathematical model (this
is the case , for example , tactical decisions or steering ) . On the
contrary , when the decision factors are qualitative and numerous , the decision can not result from the simple solution to a mathematical model . The most important decisions , under the direction of senior management , involve many qualitative factors .

II  – Le processus de décision

Herbert
Simon is the author of the IMC model (Intelligence
, Modelling , Choice
) and This model shows us the complexity of the decision process that H . Simon distinguishes by the Intelligence : This is to understand by gathering all possible informations about the company and its environment . Modelling : Here , the information collected will be processed . The decision makers will then look for possible solutions . And finally the choice of the best solution given the constraints .
Moreover
, the actors often decide in favor of the framework of a ” limited
rationality ” . Herbert Simon questions the postulate of rationality of
the actor in the decision process is not always so rational as one might think
. In fact , it is usually assumed that the decision-maker having complete
information knows in advance the consequences of his decision , but in reality
it is very difficult , very long , and often very expensive to obtain complete
information . In short , the actor knows that it is irrational to look for
complete information and , as the case may be , he knows that he acts within
the framework of a limited rationality . Therefore , when making a decision ,
it is almost impossible to prove that the decision is the best ! The
decision-maker will therefore stop at a decision that seems satisfactory to him
.
The
objectives of the decisions are very variable – they can be:

economic (eg winning markets )

financial (eg increase in turnover )

social (eg staff policy )

. In any decision-making process , environmental
constraints must also be taken into account , such as : – growth rate ,
inflation , labor market , etc . ) ; – Legal environment , new laws , and new
regulations ; – Organizational and productive constraints (just-in-time
production , organizational structure of the company , existing processes ) –
Competition (number of competitors , evolution of demand , globalization . ) .
– The economic situation , globalization . 

III – Les outils d’aide à la décision

Decisions on the
certain future are not really problematic and can be described as predetermined
. Indeed , they are either applications of management rules or business models
applicable to the company . These decisions assume that decision-makers have complete
information and therefore act rationally . If the certain decisions result from
economic models , they are generally decisions that integrate variables
perfectly controlled and controlled by the company . For example , the company
can use linear programming to set an optimal production structure of
constraints or use inventory management models . Decision supports / supported
tools are numerous – we can also mention the analysis of decreasing marginal
returns (see chapter on production in general economy 1 ° year ) to determine
the optimal production threshold in the event of a price . Of sale given –
finally let us quote the models of computation for the profitability and the
choice of the investments , etc . If certain decisions result from management
rules , it will simply be a routine decision such as the establishment of a
workshop schedule or the updating of stock sheets , etc . However , we note
that the analysis of decisions on uncertain future is a little more delicate .
These decisions assume that decision-makers do not have complete information –
. So they act in a world of limited rationality . How can one , in spite of
everything , rationalize the decision-making processes / processed in this case
? This chapter does not discuss all the decision support tools that exist .
However , we will focus on explaining the operation of a fairly commonly used
and qualified model of ” the weakest maximum regret strategy ” . For
some decisions these tools are quite relevant – especially for production decisions
. However , there is no quick fix to fully rationalize the decision-making
process .

IV – les
liens entre  décision et action

 

The different decision-making models generally propose a relationship between decision and action : . The analysis of the environment and resources is mainly the phase of strategic thinking . Once this phase is completed and various solutions or opportunities are considered , the decision phase is characterized by a specific time and place (meeting
of the management committee , the board of directors , etc .
) . Once the decision is made , it is supposed to be implemented , theoretically exactly as it was intended . While this presentation is a little caricatural it is nevertheless emblematic of a large part of the research work . These sequential links have been ‘broken
‘ by several authors . The first link , between decision and action , was questioned for
example by Langley et
al . which recall that ” many questions persist in one forms
/ formed or another for a considerable time . They do not necessarily die when key decisions are made ; many remains relevant and meet other questions . In our view , research in this area would be more productive if it were designed in
terms of continuous and interacting streams of issues that lead to action , sometimes through identifiable decisions . ” Many elements of reflection can therefore exist on the organization of necessarily giving rise to a decision . Moreover , they do not disappear once the decision is made . If strategic thinking can exist on decision , the reverse is difficult to envisage , the decision phase constituting in itself a process of analysis , evaluation , comparison comparable to a process of reflection . Eisenhardt & Zbaracki defines
/ defined it as a model where ” decision-making occurs to a stochastic encounter of choice seeking problems , problems seeking choices , solutions seeking problems to answer , and decision-makers seeking something to decide .” . Bower (1970
) also showed that the investment decision on divisional managers was sometimes intuitive and not based on a prior formal analysis . A formal analysis was then done later to support the decision that had been made . Another dimension of this first link between reflection and decision deserves to be discussed : link established between the reflection and the object of the decision . Many decisions can be taken in
the light
of reflections conducted around other subjects than their main subject . A decision on a question affects future decisions on other issues three kinds of linkages between decisions that illustrate this similarity in
/ between / with supposedly independent decisions : . Reflection on strategy is not necessarily directly and instantaneously linked to a decision . Finally , the link between decision and action is further weakened in the case of what Mintzberg & . Waters (1990
) called ” emerging strategies ” . In this case , there is a decision and an action , bringing a result , but other related decisions that modify the environmental or organizational conditions and will profoundly change the result expected action initiated by the decision . More precisely , the action is transformed by these emergent phenomena and no
longer corresponds to what had been previously decided . In this case , the link between decision and action is not necessarily broken , but it is transformed . Three main reasons thus weaken the supposed link between decision and action : • there may be actions without prior decision ; • there may be decisions without actions to follow ; • the actions taken may not be in
line with those decided upon .

Les
facteurs influençant la structure de l’organisation

 

In
case of a question explicitly oriented towards the structure of the company ,
after having described it , it is quite relevant to rely on authors to
understand what elements have or could influence it . , Let’s start with the
most obvious which is that of size . Indeed , as we have already seen , the
firm in U seem essential for large companies while the firm in M is much more
relevant to smaller organizations . But the U-shaped firm often leads to
rigidity , which can lead to the loss of the company in an increasingly
unstable and competitive environment where responsiveness is clearly a key success
factor , firms are increasingly inclined to limit their size to avoid having to
adopt an U-shaped structure as described by Ernst Schumacher in Small is
beautiful (1973 ) . The environment is also a factor that must be taken into
account . Burns and Stalker , in The Management of Innovation (1961 ) argue
that if the U-shaped firm is not a problem in a stable and predictable
environment where the company is an indisputable leader , its rigidity is much
more so when the environment requires constant adaptation to survive in the
market . According to Masahiko Aoki in The cooperative game theory of the firm
(1984 ) , the nationality of the firm also influences the structure . In
particular , he notes that Japanese firms are more likely to adopt an M structure
while Westerners prefer the bureaucracy (he speaks of firm in J for the firm in
M and firm in H for the firm in U but the essential characteristics are
identical ) . Finally , according to Chandler , other factors internal to the
company can change its structure . For example , the acquisition of new
technologies can make the firm dependent on it and stiffen it . The company
culture can also more or less encourage employees to participate in the
decision-making process .2. L’incidence des decisions stratégiques sur l’offre des organisations

 

Companies offer only merchant goods and services . No strategic decision will
change this state of affairs . A strategic decision often has an impact on the
supply of products and services provided by the company . Some examples of
strategic decisions affecting the company’s offer : – the launch of a new
product and therefore an expansion of the product range . A range is the set of
products of the same category . A range is wide when it has a large number of
different products . A range is deep when , for the same product , it is
offered multiple variants (sizes , colors . ) ; – set up an associated service
. An associated service is a service complementary to the main product , which
brings complementary benefits of the customers and which makes it possible to
stand out from the competition ; – change customer segment ; – launch a new
market ; – refocus on its core business A strategic decision : – can be defined
and applied for the whole organization , it is called a strategic decision on
the global level ; – can be defined and applied for a business area of the
organization , this is referred to as a strategic decision by business area .
Public organizations and associations provide mainly non-market goods and services
. Public organizations and associations also make strategic decisions based on
strategic goals . Example : A municipality may have the strategic objective of
attracting more tourists during the summer . One of the possible decisions to
achieve this goal is the construction of a swimming pool . This decision is
strategic ..

 

The strategic process is divided into several axes
: – what the organization can do This is the purpose of the strategic diagnosis
;

 – what the
organization wants to do . This is the purpose of the strategic objectives ;

 – how she
wants to do it . This is the purpose of strategic decisions . A strategic
decision often has an impact on the supply of products and services provided by
organizations . A strategic decision can be defined and applied to the global
level or by field of activity .

Conclusion : . Companies have to face constraints .
It can be the state of competition , the market , the legal and social
environment or the quantity of factors of production . Depending on whether
these constraints are certain or not , we will talk about a certain future –
uncertain – random . But even using very sophisticated tools , the solutions
chosen are very often subjective . In most cases , models are only the starting
point of negotiations and discussions leading up to the decision that will in
fact be the result of power struggles within the company .