The decision making process is a number of steps that require management to recognize and define the nature of the decision situation, then identifying the possible alternatives from which the best alternative will be chosen. After this, the company must then discuss and decide how the alternative will be implemented within the company. The conditions in which these are made are under certainty, risk and uncertainty

The process in which decisions are made on the SBP board resembles that of the classical model. After a suggestion is mentioned, the members of the SBP board attempt to gather and examine all information possible. With almost perfect information the group of members on the board examines all other alternatives and endeavor to eliminate uncertainty by considering the possible outcomes weather they be positive or negative in a rational manner. Although some aspects simulate the rational model in relation to the research and the way the decision is rationalized, the decision process at SBP in majority classical and also group orientated.

There are three decision models, they are classical, administrative and rational and they serve as a guide making decisions for mangers both individual and group orientated. The classical decision model is a rigid approach to decision making and assumes managers are logical and rational and will make decisions in the best interest of the organization. Administrative, however, argues against classical saying that imperfect facts are provided and decision makers are constrained by bounded rationality and tends to satisfice when making decisions. The rational model simulates to both classical and administrative in rational thinking, yet the process is quite different. Decision makers are asked to follow a series of rational guides in order to result in the best alternative. These guidelines are; recognizing and defining the decision situation, identifying alternatives, evaluating alternatives, selecting the best alternative, implementing the chosen alternative and following-up and evaluating the results. This model helps keep decision makers focused on facts and logic and helps guard against inappropriate assumptions and drawbacks. (Davidson & Griffin, 2000, p307)

The Southern Brakes and Plastics board need to discus certain measures of raising revenue to implement such strategic decisions to finance the company’s profit for the future. According to the statement of cash flow requirements there are several ways in which SBP can gain revenue to fund and implement these decisions. One alternative would be to use all of the operating profits and as a result having our share prices drop. This is in contrast to our overall objective to satisfy the shareholders who would not be happy with this drop in value. Another alternative would be to sell the brakes and clutch division to Gridlock. Kate Morecroft believes that it could go for around$200 million although Gritlock is expected to bi at $160 million taking into consideration the company’s

Some topics in this essay:
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