107MAN Information Management & Decision Making

Assignment 1: Case Study – Report on decision-making in Rhino Bedrooms

Name, Middle Name, Last Name

Nikki Lall

Coventry University College

27th January 2017

Table of Contents

1.0 Introduction .............................................................................................................................. 1

2.0 Critical Evaluation ..................................................................................................................... 1

2.1 Management Schools of Thought ......................................................................................... 1

2.2 Impact of sources of data/information on decision-making ................................................ 2

2.3 Decision-making levels & tools ............................................................................................. 3

2.3.1 Decision-making levels................................................................................................... 3

2.3.2 Decision-making Tools ................................................................................................... 4

3.0 Conclusions and Recommendations ......................................................................................... 5

References ...................................................................................................................................... 6
1.0 Introduction

Rode (1997) highlighted that managers are given the task of making effective decisions which

have the tendency to affect, either positively or negatively, the viability and value of the firm. A

good part of effective management is efficient decisions from managers as it determines the

ways through an organisation achieves its goals, solves complex problems and allocate resources

(Daft and Lane 2009). Therefore, managerial decision making is highly associated with effective

management and effective decisions by firm’s managers lead towards commercial success (Nutt

2004). This study aims to explore various decision-making challenges within Rhino Bedrooms

deciding to expand its operations globally. Rhino Bedrooms supply fitted furniture for home

offices and bedrooms in a variety of style, finished and designs (Rhino Bedrooms 2017).

2.0 Critical Evaluation

2.1 Management Schools of Thought

Daft and Lane (2009) mentioned that the decision-making of managers usually falls into three

broad categories, the classical (rational) model, the political model or the administrative model.

Forman and Selly (2001) introduced some other renowned models of decision-making, Bunch of

Old Guys Sitting and Talking (BOGSAT) and the three-phased decision-making model by Herbert

Simon – administrative model of decision-making. Recently, Dane and Pratt (2007) have argued

that intuition – another component of the administrative model – also has an important role to

play in managerial decision-making. The authors mentioned that intuition deals with the

immediate apprehension of a decision situation based on past experiences but with conscious

thoughts. The political model of decision-making is best in situations where there exist high

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uncertainty and ambiguous information about the decision. It is used in such situations when the

organisation faces conflicting/opposing views from others (Daft and Lane 2009).

Considering the features of the rational (ideal) model of decision-making, it seems that it will

prove to be best for Rhino Bedrooms for their decision of expansion, however, Daft and Lane

(2009) mentioned that this model is not applied in real business settings because of its very

nature rather is only used to help managers to some extent. In such regards, the Analytic

Hierarchy Process (AHP) for analysing and organising complex decisions is recommended for

Rhino Bedrooms. Saracoglu (2013) mentioned that recently this model has experienced its

application in a wide variety of fields including healthcare, business, education, and so on.

Bhushan and Rai (2004) also mentioned that this model is useful when teams are working on

complex problems (for e.g. the decision of expansion made by Rhino Bedrooms). Recently, the

application of this model in the furniture industry has been tested by Azizi, Mohebbi and Felice

(2016) and the results were comprehensive and resulted in efficient decision-making.

2.2 Impact of sources of data/information on decision-making

Laird et al. (2003) highlighted that decision of international expansion are mostly driven by the

favourable economic characteristics of the host country (foreign business environment) along

with the perceived growth potential of the host market. Gallego et al. (2009) added that decisions

on international expansion are also driven because of economic objectives. However, when a

firm decides to expand its operations globally, it needs to review a lot of information/data on

that particular market for their decision to be successful (Yip and Hult 2012). A document

published by Win Translation (2011) emphasised the importance of market research when a firm

decides for international expansion. They specifically highlighted (p. 5-6),

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 “Market research is critical to the decision-making process in a marketing plan. Research
reveals the market or markets that offer the best opportunities for investment. It reveals
the political, legal and regulatory, financial, cultural, competitive, consumer and
marketing challenges that a business may face as it considers exporting to a particular
destination.”

Daft and Lane (2009) mentioned that two types of market research are conducted in such

situation, secondary market research; in which the data is gathered from various public sources

including newspapers, books, past studies, the internet and market reports, and primary market

research; data is collected through qualitative (interviews) or quantitative (surveys) research with

the citizens of the particular market and then analysing the data to reach effective decisions. Daft

and Lane (2009) further highlighted that primary research has various advantages over the

secondary market research because the latter may contain past and irrelevant data which might

not be suitable to the current situation, whereas, the former helps in collecting current data and

then analysing it statistically can reveal important facts which can guide the decision-making

process.

2.3 Decision-making levels & tools

2.3.1 Decision-making levels

There exist various differences in the decisions being made at various levels due to their scope.

Decisions which can affect the company as a whole and are long-term are the responsibility lies

at the top management level, whereas, such decisions which can impact the day-to-day

operations of an organisation lies on the lower management level. It is also important to note

that all of the decisions are indirectly or directly related to the renowned functions of

management, planning, organising, leading, staffing and controlling (Hartman 2011). There exist

three main decision-making levels which are discussed as follows (Hartman 2011):

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  Top Management: Responsible for making strategic decisions which are long-term and

can shape or affect the direction of a business. The decisions of top management are

mostly about making plans and then handing it over to the middle management for

further action. The decision of expanding internationally will be the responsibility of top

management as it’s a long-term decision and can significantly impact the business as a

whole. As mentioned earlier, this decision can though be reached through the rational

model but because of its limitations in the real business setting, it is recommended to use

the AHP model discussed above.

 Middle Management: Once the top management is done with making strategic decisions,

middle management comes into action and it is their responsibility to come up with

various tactical objectives that will help in achieving the strategic goals. In the case of

Rhino Bedrooms, the decision of expanding internationally and its broad objectives will

be decided by the top management and then the middle management will devise tactical

plans on how to effectively enter a foreign market.

 Operational Management: It is responsible for employees and they choose their own

goals on a daily, weekly or monthly basis.

2.3.2 Decision-making Tools

In order for the top and middle management to effectively decide on the international expansion

of Rhino Bedrooms, certain tools need to be used for the decision-making process. Gopal (2014)

argued that decision-making tools are mainly categorised into two broad categories: general

decision-making tools and such tools which support the stages of Mintzberg’s decision-making

process. Gopal (2014) suggested the use of SWOT, Benchmarking and Brainstorming to be the

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perfect decision-making tools under the Mintzberg’s decision-making process. Naylor (2003)

mentioned that of particular interest in this situation is the SWOT analysis of the company as well

as the market in which the company is deciding to enter because it helps to analyse the internal

weaknesses in light of current and statistical data. On the same hand, Hannagan (2001)

mentioned that PESTLE analysis can also be a useful tool for analysing the external factors of the

market having the potential of affecting the company’s operations. However, both of these

models have certain disadvantages; for e.g. the information can be oversimplified in SWOT and

PESTLE analysis used for the decision-making process and both of these tools require being

conducted constantly as the internal and external environment changes consistently. Finally,

Gopal (2014) also suggested the use of forecasting as a tool to guide complex decision-making

and is extremely helpful when a business decides to expand globally. However, it is a complex

process and requires extensive knowledge as well as experience to perform it adequately.

3.0 Conclusions and Recommendations

Conclusively, it can be said that for Rhino Bedrooms in order to successfully expand its operations

globally must review a number of decision-making models to decide upon the most effective

decisions as it directly relates towards the success of an organisation. It is suggested to use the

AHP model of decision-making as it is used for complex decisions and the use of this model in the

furniture industry is evident from some studies. It is also recommended that the company should

rely on primary data for their decision-making process combined with the use of decision-making

tools including SWOT and PESTLE analysis, and forecasting as a must.

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References

Azizi, M., Mohebbi, N., and De Felice, F. (2016) 'Evaluation of sustainable development of wooden
furniture industry using multi-criteria decision-making method'. Agriculture and Agricultural
Science Procedia 8, 387–394

Bhushan, N. and Rai, K. (2004) Strategic decision making: Applying the analytic hierarchy process.
London: Springer London

Daft, R. L. and Lane, P. (2009) Management. 9th edn. Boston, MA, United States: South-Western
Cengage Learning

Dane, E. and Pratt, M. G. (2007) 'Exploring Intuition and Its Role in Managerial Decision Making'.
Academy of Management Review 32 (1), 33–54

Forman, E. H. and Selly, M. A. A. (2001) The decision by objectives: How to convince others that
you are right. Singapore, Singapore: World Scientific Publishing Co Pte

Gallego, M. A., Hidalgo, E. R., Acedo, F. J., Casillas, J. C., and Moreno, A. M. (2009) 'The
relationship between the timing of entry into a foreign market, entry mode decision and
market selection'. Time & Society 18 (2-3), 306–331

Gopal, R. (2014) Marketing decision making and the management of pricing: Successful business
tools. Boca Raton, FL, United States: Business Science Reference

Hannagan, T. J. (2001) Mastering strategic management. Basingstoke, Hampshire: Palgrave

Macmillan

Hartman, S. W. (2011) Management Theory. New York: New York Institute of Technology

Laird, K. R., Kirsch, R. J., and Evans, T. G. (2003) 'A marketing resource-based model of
international market entry and expansion for professional services firms'. Services Marketing
Quarterly 24 (4), 1–15

Naylor, J. F. (2003) Management. 2nd edn. New York: Financial Times/ Prentice Hall

Nutt, P. C. (2004) 'Expanding the search for alternatives during strategic decision-making'.
Academy of Management Executive 18 (4), 13–28

Rhino Bedrooms (2017) Rhino fitted bedrooms Essex & Kent – fitted bedrooms, wardrobes &
bedroom furniture [online] available from <http://www.rhinobedrooms.co.uk/> [17 January
2017]

Rode, D. (1997) Managerial Decision Making: Normative and Descriptive Interactions no [online]
available from

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 <https://pdfs.semanticscholar.org/cb27/c01a46738b7b14769fc137292ffc2aef3b17.pdf> [15
January 2017]

Saracoglu, B. O. (2013) 'Selecting industrial investment locations in master plans of countries'.

European J. of Industrial Engineering 7 (4), 416

Win Translation (2011) 'Going Global: How to Succeed in International Markets' no [online]
available from <http://www.wintranslation.com/wp-
content/uploads/Going_Global_white_paper.pdf> [15 January 2017]

Yip, G. S. and Hult, T. G. M. (2012) Total global strategy: International edition. 3rd edn. Boston,
MA, United States: Pearson Education (Us)

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