The power of decisions

Seizing Opportunities in a Fast-Changing Environment

Every day, thousands of decisions are made in the business environment. Although most of them are small decisions, making the right decisions at the right time can be crucial for a business to survive. Proper decision-making is needed to regulate the performance of the business, including for example objectives, goals, strategies, policies, and organizational designs. Making correct decisions reduce complexities, uncertainties, and diversities of organizational environments.

However, making the right decisions at the right time is not as easy as it sounds. The current business environment is constantly changing. Modern organizations are therefore expected to be able to anticipate the future, quickly establish cause-and-effect relationships, and propose new ways of doing things. Understanding this fast changing environment and making right decisions along is more important than ever to achieve competitive advantages and business efficiency.

To support decision-making challenges, new technologies are emerging and increasing the power of decisional outcomes. While most decisions used to be driven by gut, experience, and intuition, the shift to a data-driven world is bringing decisions-making to a new dimension. We are shaping a world where decisions are more and more driven by data and analytics, or are even completely algorithmic driven, and these intelligent technologies matching the requirements of modern management have gained great importance. When talking about decision-making, Artificial Intelligence (AI) adds a lot. It makes the process clearer and faster, supporting both small decisions and complex problems. However, even with such a powerful tool as AI, decision-making keeps being complicated. Intelligent technologies emerging in the fast changing environment ask for the optimal cooperation between managers, data applications, customers and their needs, and the competitive landscape to achieve powerful decisions.

To summarize the wide applications of the power of decisions and its challenges in current business practices, it can be classified into the following 4 components:

• Innovative Decision-Making
• Decision-Making in the Human-Machine-Interface
• Future-Proofing Supply Chains
• Customer Oriented Decision-Making

Innovative decision-making

To stay ahead of competition, it is important for businesses to be innovative. Innovation not only involves an organizational level, but also the underlying cognitive processes where valuable decision-making plays a big role. For example, decisions in innovation determine where creative ideas are sources, how options are weighed, and who engages in the process. However, decisions in innovation are often limited by insufficient information and complex factors, which results in inefficient decision-making reducing an organizations resources and their chances on bigger bets.

Decision-Making in the human machine interface

Human-machine interfaces are now ubiquitous in everyday life. Many decisions are not solely made by humans but are made with the assistance of machines. Recent advances in computational power, the increase in the availability of data, and new machine learning techniques allow humans to use AI-based solutions to an even bigger extent in decision-making. The development in computational power forces organizations to think about the human-machine interface. When should decisions be automated and when should humans make the decisions? To what extent should machines collaborate with humans in decision-making?

Future proofing supply chains

Supply chains have always been vulnerable to disruptions. For example, in 2021 the Suez Canal, an important transport canal, was blocked for six days, resulting in enormous money losses. Also, shortages negatively influence the supply chain. Shortages in workers, raw material and capacity have big consequences. For example, when freight volumes drop, companies struggle to get trucks to transport their goods. To make their supply chains future-proof, companies would want to mitigate these vulnerabilities by becoming more resilient. Outsourcing is becoming more popular with companies. The better companies cooperate, the more they share knowledge and data. However, companies do not easily trust each other.

Customer oriented decision-making

Customers and their satisfaction are very important to companies, especially in competitive markets. In current practice, business decisions are often driven by customers. Therefore, understanding the needs and interests of customers is vital for successful decision-making. A business approach that could help managers’ decisions to have better outcomes is applying the concept of customer orientation. This approach puts the needs of customers over the needs of the business, in which the business thrives by consistently improving customer focus. When making decisions, for example when selecting ideas for new product development, customer needs are set as top priority. Companies using this approach turned out to be more profitable by increased sales.

However, due to increasing technologies enabling greater personalization, customer needs and expectations increase exponentially. Consequently, it is a complex task to make proper business decisions while being customer oriented. Big data and data analytics have become important to gain crucial customer insights, knowing their experience, preferences, and behavior.