Reading file 6

Background

Decisions, decisions …
Making the right decisions is the key the Boston Matrix separates products
to success in business. There are the into cash cows, problem children, rising
day-to-day decisions that need to be stars, and dogs. The cash cows are highly
resolved quickly; these often involve an profitable, well-established products
element of troubleshooting. Next, there that generate important income for the
are the medium-term tactical decisions business. Stars are the new products
that will govern the weeks and months that have yet to reach maturity, but that
ahead. This could be the organization are nevertheless gaining market share.
and execution of the launch of a Problem children have a big question
marketing campaign for a new product. mark hovering over them. They are
Finally, there are the long-term strategic new projects that could either prove
decisions where managers have to think themselves or simply fail to take off.
about the longer-term future of their Dogs are products that are near the end
business. This could be how to position of their life cycle. They have probably
itself in the market place, which products gone too far to be re-launched and are
and services to develop, etc. It could either divested or allowed to fade away.
also involve deciding whether to merge This simple technique allows firms to
with or acquire a competitor, enter into see at a glance the range and health
a new and unknown market, or indeed of their product portfolio. Although
to withdraw from a sector of activity. arguments can arise about which part
A number of tools are available to help of the matrix the product falls into, it is a
people come to the right decision. useful planning tool for deciding what to
do next and what investment decisions
Some business thinkers believe in a to make.
rational framework for decision-making.
The Kepner-Tregoe model which works SWOT analysis is a technique that
on the basis of if you choose something evaluates the strengths, weaknesses,
you, by definition, reject something opportunities, and threats an
else. A decision statement is formulated organization faces in its broader business
that states what decision needs to be environment. Strengths and weaknesses
made. Then it uses a system where say what the firm is good or bad at,
lists of ‘musts’ and ‘wants’ are drawn while opportunities asks managers to
up and given a numerical value and a think about where the company should
weighting. Only the ones with the highest be going next. Threats, of course, looks
results are taken into consideration in at the dangers posed by competition,
the next round of decision-making. In both domestic and foreign, changes in
their turn, alternatives are generated technology, or fashion that could affect
and evaluated. If an alternative cannot the firm.
satisfy the ‘musts’ then it is eliminated
from further consideration. Its strongly In situations when new and creative
logical approach is the opposite of solutions to problems are needed,
managerial ‘hunch’ or ‘gut feeling’. The organizations may brainstorm.
danger is that the decision-maker can be Brainstorming consists of people
drowned in a sea of data and that it can throwing out ideas more or less
lead to ‘paralysis by analysis’. A wide- spontaneously without any comment
ranging international survey by Reuters or evaluation / criticism by other
discovered that over four managers in members of the group. Hierarchies are
ten felt that the decision-making process temporarily forgotten and at the initial
was too slow because of this. stage, all ideas are equal whether they
come from a subordinate or a senior
Two tools that may help planners with member of the group. This system allows
the broader picture are the Boston for all members to contribute freely and
Matrix and SWOT analysis. Originally encourages creativity as one idea feeds
devised by the Boston Consulting Group, into another.

© Oxford University Press 2017 Business Result Second edition Upper-intermediate

 Reading file 6
Exercises
1 Work with a partner. Discuss these questions.
1 What kind of decision-maker are you? Are you logical, or do you prefer to trust
your ‘gut’ or instinct?
2 Are you sometimes impulsive?
3 How often do you change your mind?
4 How is the way you make decisions different in your work or your private life?

2 Read the first paragraph of the text and answer these questions.
1 What does the writer think is the difference between day-to-day decisions,
tactical decisions, and strategic decisions?
2 Which type of decision-making are you mostly involved in at work?

3 Read the second paragraph and answer these questions.

1 How does the Kepner-Tregoe model work?
2 How is this different from approaches based on ‘hunch’?
3 What is its big drawback?

4 Read the rest of the text and answer these questions.

1 In which quadrant of a Boston Matrix would you place these well-known
products?
Coca-cola soft drink    Sony Walkman CD player
iPad   Toyota Prius
2 Which sections of a SWOT analysis deal with internal factors and which with
external factors?
3 How is brainstorming supposed to work?

5 Match definitions 1–8 to words in the text.

1 dealing with problems as and when they come up:
2 to join with another business:
3 to take yourself out of a situation:
4 discarded / thrown out:
5 covering a large area:
6 well-known and occupying a strong position in the market:
7 sell off a part of a business that you no longer need:
8 without thought or analysis:

6 Look back at the text and choose three words that you could use in your
day-to-day work.

7 Work in small groups. Discuss the questions.

1 How valuable do you think the techniques described are in real life?
2 Are techniques that are dreamt up in universities or by management
consultants really practical?
3 How possible is it to forget the established hierarchies in traditionally run
companies to run brainstorming sessions.
4 An ancient proverb says: ‘If you walk, walk; if you run, run; but whatever you
do, don’t wobble’. How do you interpret this?

© Oxford University Press 2017 Business Result Second edition Upper-intermediate