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    You have just been promoted from front-line supervisor to be one of the firm’s senior managers. During your business education, you learned that the primary role of a manager is to make good decisions. As a supervisor, you had frequently been making routine decisions, but you realize that decision making for the overall company can and will have far greater impact on the company and its employees.

    Your boss, the chief executive officer (CEO), realizes that you do not have much practice in this higher level, decision-making process and has asked you to write a memo describing your understanding of how to make important decisions.

    Your memo should address the following questions:

    Describe at least 3 criteria that would determine whether the manager is making good decisions. What should be done to better assure that you are making a good decision?
    In the realm of decision making, what are assumptions? Rather than use a dictionary definition, cite several specific assumptions that would go with any real-life decision you have made or have seen made at a company at which you have worked.
    Given the importance of proper assumptions, your boss asked you to assess the accuracy of certain business assumptions and what could you do to test or confirm the credibility of them. The following were major assumptions for each firm:
    An automobile manufacturer’s assumption that the demand for SUVs would continue because gas prices would continue to rise
    An airline’s assumption that there was a need for an airline that provided no added amenities



Subject Business Pages 4 Style APA


Monitoring Performance

Criteria for making good decisions 

Making good decisions is crucial to the success of any business as it ensures that a firm remains competitive within its industry and continues being profitable. The three criteria that would ensure that a manager keeps making good decisions is to ensure that the manager firstly identifies the business problem, analyzes possible solutions, valuates different possibilities that might arise from the possible solutions before finally making the decision. Managers should gather all the relevant information regarding a problem before making a decision on the possible solution to the problem. In many cases, managers might not have all the information that pertains to a problem and they must make their decisions based on partial information (Vera-Baquero, Colomo-Palacios & Molloy, 2016). In order to ensure that they make the right decisions, managers must ensure that they keep their minds focused on the intended objective that is to be achieved. Evaluating the decision made is a crucial aspect of the decision making process as the aim of any good leader is to make effective decisions. Decisions should be categorized into simply bad or good decisions, but should be effective decisions and a review of the decisions made is crucial for building the confidence of the leader in making effective decisions.

What are assumptions?

Assumptions are statements regarding business situations that are not backed by concrete evidence. Business assumptions are statements that refer to the business environment, which are not backed by enough research and data about the issue. For example, many supermarkets are expanding to occupy malls based on the assumption that an increasing number of consumers shall visit and shop at the malls. This assumption has proven valid as consumers love the open spaces provided at malls and continue to shop in great numbers at malls. Another business assumption that works for the retail market is the location of most boutiques in front-facing shops on busy streets based on the assumption that passersby on the street shall see the shop and decide to buy from the shop. This is the main reason why most retail stores are located on busy streets, while specifically facing the street in order to attract a greater number of consumers (Becker & Marique, 2014). The same goes for mass media advertisements on TV where advertisers assume that television viewers will continue viewing TV especially during breaks in popular programs when advertisements are aired. This assumption is the main driver of TV advertising based on the viewership of popular programs, which in reality might not be accurate.

Assess the accuracy of certain business assumptions

The first assumption is made by an automobile manufacturer who assumes that the demand for SUVs will continue to rise as long as the fuel prices keep rising. The second assumption is that made by an airline stating that there is a need for an airline that does not provide any extra amenities. There is no easy way to quantify the accuracy of the first assumption because usually the demand for SUVs is directly related to population growth and an increase in the number of families that own cars (Robinson & Nikolic, 2014). However, one can keep track of the statistics related to fuel prices as well as the demand for SUVs and try to establish a correlation between the two. The second assumption can be easily quantified through a survey of frequent fliers or the target market with regards to whether they would be willing to fly with an airline that provides no extra amenities. The survey shall identify whether the assumption is accurate or not.



Becker, T., & Marique, G. (2014). Observer Effects without Demand Characteristics: An Inductive Investigation of Video Monitoring and Performance. Journal Of Business & Psychology, 29(4), 541-553.

Robinson, D. A., & Nikolic, B. P. (2014). A Stairway to the Stars: Monitoring Sustainability Performance in SMBs. Journal Of Business Systems, Governance & Ethics, 9(1), 23-38.

Vera-Baquero, A., Colomo-Palacios, R., & Molloy, O. (2016). Real-time business activity monitoring and analysis of process performance on big-data domains. Telematics And Informatics, 33, 793-807.


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