Bauer, T., & Erdogan, B. (2012), Organizational behavior (1.1 ed.). Nyack, NY: Flat World Knowledge.
In addition, you need to read chapters 8, 9, 10 and 11 in Accounting in a Nutshell.
Please refer to the bottom of page 287 in Accounting in a Nutshell. Read Self Test Question 4. I would
like you to use the information from this question to respond to the following:
�What decision making model would you use to make this decision?
�Are any of the decision-making traps discussed in our text in danger of clouding your judgement?
�Would any of the tools and techniques for making better decisions assist us in this decision?
�What is your final decision and why?
Please be aware that I am not asking you to provide the calculations for this problem. While I would like
you to understand how the problem is solved, the solutions are at the end of the section, so you should
have the accurate information to make your final decision. The point of this paper is for you to apply the
decision making techniques to the area of managerial accounting. In addition, use the above bullets as a
guide for your paper…I do not want to see these listed as individual sections within your paper.
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This paper should include 3-5 pages of content with an additional cover and reference page. This is a
total of 5-7 pages.
Your paper should be written in proper APA format. This link will take you to the section of the APUS
library that can assist you with your formatting apus.campusguides.com/content.php.
Effective management requires that leaders adopt suitable models that are in line with
their short and long-term goals (Walker, 2009). The consideration of this aspect is often
significant when it comes to the making of decision affecting organization’s operations. Since
leaders are always involved in the establishment of decisions that possess significant impacts on
their firms, they should ensure that they comprehend the various decision-making frameworks
alongside what it required for efficient decision-making (Bauer & Erdogan, 2012). One of the
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significant aspects that should be taken into consideration during decision-making is critical
Pareto Analysis and SWOT Analysis
Taking into consideration the issue facing BSE Veterinary Services, rational decision-
making should be adopted in this organization. This BSE’s management is faced with the
problem of selecting a suitable method that can be employed in the realization of maximum
gains within the shortest time possible. The firm is required to increase its output to 18,000
laboratory tests so that it can manage to respond effectively to the increasing the demands
resulting from the problems experienced with the beef herd. However, the firm’s current output
is 12,000 laboratory tests. As such, the organization requires the addition of another shift on its
schedule to address this problem. Being that this problem will impact significantly on the
organization’s resources, its management should employ a rational-decision making model using
tools such as SWOT analysis to accomplish its objectives. Rational decision making takes into
consideration the aspect of following a rational four-step pattern when making decisions (Bauer
& Erdogan, 2012). These steps include identification of a problem, generation of solutions,
selection of solutions and implementation and evaluation of the solution. This framework is
founded on the cognitive assessment of cons and pros. Moreover, it is structured around
choosing the most sensible and logical alternative, which can yield the required outcomes. As
such, it involves a detailed evaluation of options and a comparative analysis of benefits of each
alternative with the aim of picking the most appropriate one.
Some factors that might lead to the clouding of efficient decision-making in relation to
the problem facing BSE are unrealistic search for silver-bullet remedies, failure to consider
options in an explicit manner and failure to embrace opportunity cost. Searching for silver-bullet
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may involve looking for complex alternative with minimal effects/results (Walker, 2009).
Moreover, the firm’s management may fail to focus on various solutions that can impact
positively on the decision-making process, thereby leading to an inefficient decision-making
process. The failure to consider the aspect of opportunity may arise from the company’s
management disregarding the costs involved in other alternatives, which might be inexpensive.
As a decision-making technique, the SWOT analysis can be employed in making
appropriate decisions concerning the problem facing BSE. SWOT analysis takes into
consideration aspects of weaknesses and strengths associated with an organization alongside the
threats and opportunities to which the firm is exposed. These four aspects are often drawn in 2-
by-2 matrix with the aim of making the model read like a series of disadvantages and
advantages. This framework is often employed together with other models in handling
management issues facing organizations (Bauer & Erdogan, 2012). Focusing on BSE’s
weaknesses and strengths in relation to its assets, inventories, staff, financial position and
equipment will help the firm’s management in identifying suitable measures of handling the
problems. On the other hand, focusing on the opportunities and threats to which the company is
exposed will help the management in adopting efficient strategies of addressing the problem. For
instance, the company’s management can decide whether to employ new workers or outsource
the contract. Besides, the firm’s management can also decide whether to increase its inventories
BSE’s management can also employing feasibility study in determining the level of
profitability associated with the new demand or undertaking. For example, the company’s
management can decide to perform a study on the effect of increasing the prices of its services
on the level of demand or profits. Furthermore, the Pareto Analysis can also be employed in
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solving the company’s problem. This model often operates on the principle of 80:20, when
organizations need to initiate several changes (Walker, 2009). This framework is vital in pointing
out areas where initial alterations/changes should be made to be enable firms obtain maximum
benefits/gains as early as possible.
Apart from increasing the firm’s output to 18,000 laboratory tests, the firm can also focus
on increasing the prices of its services in order to raise its profit margins. Taking into
consideration the fact that the demand for the veterinary services is high, the firm’s management
should employ the principle of demand and supply in its operations. Increasing the prices of the
firm’s services will help the firm realize its objectives in an easier way than when it focuses on
increasing its outputs. Therefore, BSE’s management should embrace the idea of increasing the
prices of its services or charges/fees of laboratory tests.
In conclusion, selecting an appropriate solution for problems experienced by a company
is significant in ensuring that its objectives are met in an effective manner. Therefore, leaders
should ensure that they employ decision-making models that are in line with their goals and
Bauer, T & Erdogan, B. (2012). Organization Behavior. Nyack, New York: Flat World
Walker, J. (2009). Accounting in a Nutshell : Accounting for the Non-specialist. Amsterdam: