Business Decisions Unit 4 Agribusiness Management Lesson AM

Business Decisions Unit 4: Agribusiness Management Lesson: AM 1

2 Objectives Lesson Objective: • After completing the lesson on business decisions, students will demonstrate their ability to apply the concept in real-world situations by obtaining a minimum score of 80% on Let’s Buy a Car Evaluation. Enabling Objectives: 1. Personally identify what drives the decision-making process, what interferes with the decision-making process, the consequences for making a poor decision, and the rewards for making an educated decision. 2. Define a problem and illustrate each step in the decision-making process in order to solve that problem. 3. Use the SWOT Analysis to evaluate a person and/or business decision.

3 Key Terms • SWOT

4 Making Decisions • Read the assigned article • Complete AM 1. 1 using information from the article and personal conclusions drawn from the article. – What drives the decision-making process? – What interferes with the decision-making process? – What are the consequences of making a poor decision, whether it is personal, financial, business, or other? – What are the rewards for making an educated decision, whether it is a personal, financial, business, or other choice?

5 Personal Decision Making • What drives the decision-making process? • What interferes with the decision-making process? • What are the consequences of making a poor decision? • What are the rewards for making an educated decision?

6 Classroom Cash • Who would buy the right to sit wherever you want to sit in class? • Who would like to earn money in class to pay a teacher for an assignment instead of having to do the work yourself? • Who wants to earn money for good behavior? • Who wants to earn money just for showing up for class? • What if you lost money for missing an assignment? • What if you had to pay me for every minute you were tardy to class?

7 HOW DOES MONEY CHANGE THE STAKES?

8 Why do we need to be able to make decisions? • In order for a business to run smoothly, decisions are constantly made and occur at all levels of the business or organization. • How those decisions are made is an important factor in the success of a decision. • The leader of an organization must decide whether to take full control of the decision-making process or to allow input from other employees when making decisions.

9 1. Define the Problem 2. Identify Limiting Factors 3. Develop Potential Alternatives 6. Implement the Decision 5. Select the Best Alternative 4. Analyze Alternatives 7. Establish a Control and Evaluation System Decision-Making Process

10 SWOT Analysis • Strengths • Weaknesses • Opportunities • Threats

11 Strengths • What advantages does your organization have? • What do you do better than anyone else? • What unique or lowest-cost resources can you draw upon that others can't? • What do people in your market see as your strengths? • What factors mean that you "get the sale"? • What is your organization's Unique Selling Proposition (USP)?

12 Weaknesses • What could you improve? • What should you avoid? • What are people in your market likely to see as weaknesses? • What factors lose you sales? • Again, consider this from an internal and external basis: – Do other people seem to perceive weaknesses that you don't see? – Are your competitors doing any better than you?

13 Opportunities • What good opportunities can you spot? • Of what interesting trends are you aware? • Useful opportunities can come from such things as: – Changes in technology and markets on both a broad and narrow scale – Changes in government policy related to your field – Changes in social patterns, population profiles, lifestyle, and so on – Local events

14 Threats • What obstacles do you face? • What are your competitors doing? • Are quality standards or specifications for your job, products, or services changing? • Is changing technology threatening your position? • Do you have bad debt or cash-flow problems? • Could any of your weaknesses seriously threaten your business?

15 Conclusion • Making decisions is just another part of operating a business. Even with the best plans, decisions must be made and implemented to meet changing situations. If an owner or manager follows a logical decision-making process, however, changes may be more easily made.

16 Shout It Out! • What drives the decision-making process? • What interferes with the decision-making process? • Consequences of poor decisions • Rewards of making educated decisions • Decision-Making Process • SWOT Analysis • SWOT Strengths • SWOT Weaknesses • SWOT Opportunities • SWOT Threats

17 Exit Card • What did you learn today about decision making? • What questions do you still have about decision making?