Features of making informed business decisions. Making an entrepreneurial decision. methods for implementing management decisions
3.1 Scope of business decisions
Under sphere of business decision making the combination of factors influencing their adoption should be understood. They have spatial, organizational, legal and temporal boundaries. It is advisable to structure this area by dividing it into internal and external environments.
Internal environment- this is the spatial sphere of distribution of the direct influence of the entrepreneur. It is segmented. The segments that make it up are called internal variables. A clear understanding of internal variables is an important element of an entrepreneur's activity.
1 Purpose of the company
2 Production technology. Its choice is determined by the internal goal of the company.
3 Organizational structure companies. Knowing the purpose and production technology, you can determine structural units necessary to create optimal conditions for achieving the greatest economic effect and increasing the controllability of the production process. Each fragment of the resulting structure is assigned corresponding responsibilities.
4 Staffing table. This is the definition in each element of the structure of jobs and positions in their quantitative and qualitative aspects.
5 Personnel (workers who will occupy jobs).
There are two more elements worth noting that are not “purely” internal. They play a connecting role between the internal and external environments. These elements are the result of production and the market signal.
Production result– a specific form of materialization of the goals of the entrepreneurial structure. It characterizes the quality of the internal environment, indicating the possibility of maintaining it in its original form, or dictates the need to make changes to it.
Market signal– practically an external factor, but “rooted” into the internal environment of the company, it provides feedback(consumer reaction to the product).
Thus, the internal environment can rightly be defined as a mechanism for the life of a company. This environment is theoretically called a sociotechnical system.
It should be noted that the entrepreneur himself is an obligatory element of this system. He essentially represents its center, influencing all its elements.
External environment of the company- this is its structural-spatial environment. The company is an open system, the internal environment of which can be modified under the influence of the external environment, because the final result of the functioning of the company is manifested only in the external environment.
External environment of the company- these are factors that influence the functioning of the business structure or on which the process of its functioning itself depends. However, these factors are heterogeneous: some of them have a direct impact on the business structure (direct impact factors), while others do not have such an impact, but taking them into account in the company’s activities can increase the effect of its functioning and, conversely, ignoring them can reduce this effect (factors indirect impact). The external environment, therefore, is a combination of factors of direct and indirect influence. For this reason, management, from the point of view of an entrepreneur, is the “adjustment” of the company’s activities to factors of direct impact and taking into account factors of indirect impact (or a conscious refusal to take them into account).
The external environment of the company is quite complex in its structure. TO factors of direct impact relate:
· government bodies (including local governments) and their regulations or laws;
· partners and partnerships, which are understood as suppliers(goods, raw materials, equipment, auxiliaries, capital, labor resources), and consumers;
· sources of “power pressure” on the organization;
· competitors;
· level of competence, preparedness, education of the entrepreneur, breadth of his thinking;
· company image, i.e. the idea of a firm, company, bank, enterprise in the minds of people not involved in the activities of such an organization, in the external environment.
Under factors of indirect impact refers to external factors that influence the organization only indirectly (through some other factors) or in certain specific situations (conditions). In relation to such factors, the entrepreneur develops appropriate tactics for taking them into account. These include:
· political factors;
· scientific and technical achievements, a sufficient understanding of which gives the entrepreneur the opportunity to use them in the activities of the entire organization, if this promises some specific gain. Ignoring such achievements carries the threat of falling behind and losing to competitors who use such achievements;
· the state of the country's economy - the inflationary state of the Russian economy, for example, makes it difficult in many ways for Russian entrepreneurs to operate, and the economic recession in the public sector expands the opportunities for the private sector;
· sociocultural factors of the nation, i.e. cultural, educational, moral level of the population, its value orientations and life attitudes;
· changes in the global market.
To effectively interact with the external environment, an entrepreneur needs to constantly analyze the dynamics of this environment (changes in the structure of factors). Difficulties in analyzing the external environment of a company boil down to the following:
· the structure of factors is quite complex and there are quite a lot of such factors;
· the level of influence on the entrepreneurial structure of each factor is different;
· some factors are characterized by permanent impact, others are short-term in nature;
· changes in the external environment are dynamic, chaotic and quite violent, which makes it difficult to track them.
3.2 Technology for making entrepreneurial decisions
Decision technology is a special form of mental activity based on the need to select only one option from all available alternatives by correlating such an alternative with one’s own capabilities and goal aspirations.
The technology for making business decisions represents a sequence of actions combined into a logical system that provides analysis of alternative options and identification of the most effective from the point of view of the goal, taking into account the potential capabilities of the company.
The generalized technology for making a business decision can be graphically presented in the form of a block diagram:
Fig 1. Scheme of technology for making entrepreneurial decisions
Stages of making a business decision:
1. Acceptance for consideration of possible alternatives (projects);
2. Understanding alternatives – identifying their essential features and logic;
3. Identification for each project of the requirements that must be met for its implementation (the need for specific resources, technologies, financing, etc.);
4. Determination of specific actions necessary for the implementation of the project (form of raising funds, procedure for implementing funds, procedure for implementing production, etc.). Here an economic calculation is made based on the valuation of these actions;
5. Calculation of the likely economic effect taking into account the reasonable worst-case scenario.
6. Comparison of options for pessimistic and optimistic calculations of economic effect. This comparison shows the likely range of possible effect.
7. Comparison of projects accepted for consideration is carried out based on the entire set of qualitative and quantitative characteristics identified at the early stages;
8. Choosing one of the alternatives – making a decision to implement the chosen alternative.
It should be noted that as the number of initial alternatives increases, the decision-making process on them becomes much more complicated. Therefore, at the stage of accepting possible alternatives for consideration, one should strive to minimize their number.
3.3 Economic methods business decision making
The basis of economic methods for making business decisions is the analysis of such categories as price, production costs, finance, and the ability to operate with them in practical activities.
Formation of product prices.
In this case, we mean the market price. The minimum level of this price can be determined by the following dependence:
C t =I pf -P md,
where C t is the price of the product; And pf - actual production costs; P md - minimum acceptable profit.
Sometimes the price determined in this way acts as a wholesale price. Since this price is calculated for the most unfavorable variant of the market situation, it becomes a trade secret.
The feasibility of an entrepreneur’s participation in the market is determined by the fact that he manages to form a minimum acceptable price at a level below the market price.
Market price is the actual price at which a product is actually purchased. The difference between the market price and the minimum allowable serves as excess profit
SP=C r -C md,
where SP is excess profit; Ts r - market price; C md - minimum acceptable price.
An entrepreneur has the opportunity to control the pricing process if we are talking about its minimum acceptable level. In this case, pricing management is associated with finding ways to minimize production costs.
The second method of influencing the pricing process involves analyzing the market price. In this case, the entrepreneur identifies what product characteristics underlie pricing, and how the price may change if there is any change in the product characteristics. As a result, the product is given, whenever possible, characteristics that increase the market price to a greater extent than costs.
Production Cost Management
It is necessary to distinguish between economic and accounting costs. An entrepreneur mainly deals with economic costs. They are related to the possible implementation of a particular project. Accounting costs are those actually incurred by the company.
There is a time gap between planning costs and the moment they are implemented. In this regard, the entrepreneur uses the principle of “maximum possible costs” when planning costs. This is the opposite principle of the minimum acceptable price principle.
When considering economic costs, the concept of “gross costs” is usually used.
Gross costs are a combination of fixed and variable costs
And shaft = And post + And lane.
Fixed costs are those that are practically independent of production facilities. This includes depreciation costs, rent, loan fees, labor costs management personnel and so on.
Variable costs are those costs that almost directly depend on production volumes. These include the costs of raw materials, materials, components; labor costs for workers directly involved in the production of goods, energy for technological needs, etc.
An important conclusion follows from these definitions: with an increase in production volumes, gross costs per unit of goods decrease, and vice versa.
Consequently, an increase in production volumes, other things being equal, entails an increase in production profitability. This effect can be used as a means of increasing profits or as a reserve to reduce the price of an additional product.
In conditions of risky supply of goods to the market, when the level of demand is precisely unknown (for example, for a seasonal product), the entrepreneur takes 75% of the actual production volume as the estimated volume. The remaining 25% is planned as additionally produced goods. If they are not sold during the season, they can be sold during seasonal sale at a lower price, down to the level of variable costs.
The difference between the price of a product and the amount of costs is called the amount of coverage of the product. It is the sum of funds, part of which goes to cover fixed costs, and the rest goes to profit.
Determination of production volume boundaries. The minimum acceptable production volume is the break-even production level. This is a production program in which costs are covered by income.
It is always important for an entrepreneur to determine acceptable production boundaries for himself - the minimum acceptable and the maximum possible. This is due to the level of market demand.
The maximum possible production volume is determined using production function:
K m = f(T, K),
where K m is the maximum possible volume of production; T – resources used in production; K – capital used in production.
This feature is always technology-specific. If technology changes, so does function f.
But it is important for an entrepreneur to determine not only the possible limits of production, but also its optimal volume.
Optimal is understood as the volume of production at which the difference between the income received and total costs is minimal.
The search for the optimal option in practice is carried out in two options - with a given amount of capital and with unlimited capital.
In the first case, if we mean by fixed capital the equipment necessary for the normal implementation production process, then the optimal production volume is related to capacity. Therefore, based on the desire to reduce specific fixed costs, the optimal production volume will be equal to the derivative capacity.
This approach is typical for a beginning entrepreneur.
The highest level of production efficiency will be achieved at a certain combination of production volume and costs. If we consider, for simplicity, two factors of production - capital and labor, then the share of each factor will account for a certain share of the other.
For example, to service 5 machines you need 10 workers, and for 10 machines - 20. This can be displayed as a graphical dependence. Moreover, it is advisable to present this dependence in cost form.
If we consider that there are possible options for purchasing expensive manufactured equipment and cheap productive equipment, this will lead to different labor costs. Considering several options, they settle on the best.
In the case of determining the volume of production with an unlimited amount of capital, the reasoning is similar. However, there are not two, but three factors to consider:
1) possible production volume;
2) the required amount of capital costs;
3) the required amount of labor costs.
The calculations made are summarized in a table and the option with minimal costs is selected.
The economically optimal production volume is determined based on marginal costs.
An increase in production volume also causes an increase in costs. This growth is not always proportional to production volume. In this case, the following selection rules apply:
1) determine the average gross costs per unit of production;
2) a decision in the direction of increasing volume is chosen if the marginal costs of additionally produced goods are less than or equal to the average gross;
3) one should refuse to increase production volume if the opposite picture occurs;
4) calculate the average gross costs for the new production volume.
Chapter_6.doc
6. MAKING A BUSINESS DECISION6.1. Concept, essence and role of entrepreneurial decision
Entrepreneurial activity is constantly associated with solving problems arising in the external and internal environment entrepreneurial organization: search for innovations, changes in types of products, acquisition of production resources, structural changes in production and many other problems.
The process of entrepreneurship can be considered in its essence as a management process for the creation and operation of an object (system) of economic activity.
There are no contradictions between entrepreneurial and management decisions, since every entrepreneurial business is associated with the performance of management functions. In the process of performing management functions, an entrepreneur, like a manager, has to make a large number of decisions, planning, organizing work, motivating people employed in the organization, monitoring and coordinating all processes occurring in it. Thus, the creation of an entrepreneurial organization is associated with making decisions such as the formation of ideas, setting goals, determining the necessary resources, and choosing ways to achieve goals and objectives. The process of organization inevitably raises the need to make decisions on the structure of production and management, on the organization of the production process, support services and service production, on the organization of labor of workers and specialists. The control process is associated with making decisions about what, how and when to control, what types and forms of control to use, how to analyze the information received and how to adjust processes in accordance with control data, etc.
Thus, the initial impulse to the decision-making process is given by information about the state of the controlled parameters of the controlled object,
and the influence is carried out after the development and adoption of an appropriate decision, which in the form of one or another information (command, order, instruction, plan, etc.) is submitted to the “input” of the controlled object.
The process of making entrepreneurial decisions is also cyclical in nature, beginning with the detection of inconsistencies between the parameters of a meaningful idea, planned targets or standards and ending with the adoption and implementation of decisions that should eliminate the inconsistency. At the center of this cyclical activity are three elements of the entrepreneurial process: the problem, its solution, and the people involved in the entrepreneurial process at all its stages.
^ The problem is understood as a discrepancy between the actual state controlled object (for example, production of products) desired or specified (planned).
The entire process of entrepreneurship is presented as a set of cyclical actions related to identifying problems, especially of an innovative nature, searching for and organizing the implementation of decisions made (Fig. 6.1).
Rice. 6.1. The process of making entrepreneurial (managerial) decisions:
M – modeling the state of the management object (entrepreneurial problem, business, organization, etc.); R – development and adoption management decisions; B – organization of implementation of the decision made
Thus, all problems require thoughtful solutions from the entrepreneur. solutions to localize or smooth out their influence on the controlled object and bring it to a given (desired) state.
^ An entrepreneurial (managerial) decision is understood as finding a certain course of action, the process of activity itself and its final result. When talking about solving a problem, this term is used in three meanings:
an action option found but not yet implemented;
the process of implementing a solution to the problem itself, i.e., eliminating some obstacles and difficulties along the way;
result of the activity.
Sometimes the definition of an entrepreneurial decision is limited to the choice possible option actions. This approach impoverishes the content of this category of management theory and does not correspond to its essence. Can choose a good option actions, but it will remain only an intention if organizational and practical activities are not carried out for its implementation.
Firstly, an entrepreneurial decision is a type of activity (work) taking place in an entrepreneurial (managing) system and associated with preparing, finding, choosing and accepting certain options for action.
Secondly, an entrepreneurial decision is a variant of the influence of the control system on the controlled one, a formula for influence. In this sense, a management decision is a description of the intended actions of the control system in relation to the controlled one.
Thirdly, an entrepreneurial decision is an organizational and practical
tical activity of an entrepreneur in a controlled system. Focusing on this important aspect, an entrepreneurial decision is sometimes defined as an act of organizational and practical activity of an entrepreneur-manager.
driver and control apparatus, carried out according to a pre-developed
and a consciously chosen option. To properly understand a business decision, you must always take into account all three aspects of it in unity.
and relationships.
There are many definitions of an entrepreneurial decision, as well as a managerial one. However, taking into account the essence of entrepreneurship, we will limit ourselves to the following: decision in the business process(management) is a complex logical-mental, emotional-psychological and organizational-legal act performed by an entrepreneur within the limits of his powers. Therefore, let's take some definitions as a basis. Entrepreneurial Solution is a fixed management act, expressed in written or oral form and implemented to solve a problem situation. Or another definition. Entrepreneurial decision - this is the result of analysis, forecasting, optimization, economic justification and choosing an alternative from a variety of options for achieving a specific business goal.
The impulse of an entrepreneurial decision is the need to resolve the problem or reduce its relevance.
^ Making a business decision – This is the process of choosing a reasonable alternative to solve a problem, which is a key point in the system of not only entrepreneurship but also management. The results of the implementation of management decisions serve as the most objective assessment of the art of an entrepreneur. To solve the problem, you need to answer the following questions:
Why do it (implementation of an idea, solution to a problem);
What exactly (what new customer needs need to be satisfied, or at what quality level old needs need to be satisfied);
How (by what technology);
For whom;
With what production costs?
In what quantity?
In what time frame;
Where (place, production premises);
To whom to supply;
At what price and when;
What will this give to the entrepreneur, investor and society as a whole?
^ 6.2. Classification of solutions
Stage life cycle goods (strategic marketing, R&D, organizational and technological preparation of production, sales of goods, etc.);
Subsystem of the management system (target, support, etc.);
Scope of action (technical, economic and other solutions);
Purpose (commercial and non-commercial);
Management rank (upper, middle and lower);
Scale (complex and private solutions);
Organization of production (collective and personal);
Duration of action (strategic, tactical and operational);
Object of influence (external and internal);
Methods of formalization (textual, graphical and mathematical);
Forms of reflection (plan, program, order, instruction, instruction
and request);
Complexity (standard and non-standard solutions);
Method of transmission (verbal, written and electronic).
^ Main factors , influencing the quality of business decisions are: application of scientific approaches and principles, modeling methods, management automation, motivation of quality decisions, etc. to the management system.
Typically, in making any decision, three elements are present to varying degrees: intuition, judgment and rationality. When making a purely intuitive decision, people base it on their own feeling that their choice is correct. There is a “sixth sense” here, a kind of insight that usually visits representatives top echelon authorities. Middle managers rely more on the information received and assistance from PVMs. Despite the fact that intuition sharpens together
With the acquisition of experience, an entrepreneur who focuses only on it becomes a hostage to chance, and his chances of right choice not very high.
An entrepreneur has to make a large number of diverse decisions that differ in content, duration of action and development, direction and scale of impact, level of acceptance, information availability, etc.
In order to develop and apply decision-making methods, the latter are classified according to criteria (Table 6.1).
Table 6.1
Classification of entrepreneurial decisions
| Criteria | Solution classes |
| Degree of structure | Loosely structured (not programmed) Highly structured (programmed) |
| Content | Economic, social, organizational, Technical, scientific, etc. |
| Number of targets | Single purpose, multi purpose |
| Duration of action | Strategic, tactical, operational (or long-term, medium-term, short-term) |
| Decision maker | Individual, group |
| Decision level | The business organization as a whole, its structural divisions, functional services, individual workers |
| Depth of influence | Single-level, multi-level |
| Solution directions | Inside the organization as a system, outside of it |
^ 6.3. The essence of the main scientific approaches
to developing solutions
In the practice of developing entrepreneurial decisions, the following basic scientific approaches can be used, on which decision-making methods largely depend:
systems approach;
structural approach;
marketing approach;
functional approach;
subject approach;
A complex approach;
normative approach;
situational approach;
directive approach, etc.
The essence of the structural approach lies in structuring the business object on which a decision needs to be made, giving each structure scores (priorities) and making decisions on the main ones. For example, the importance of factors (indicators) for achieving the competitiveness of a product: quality, price, costs - for the consumer is appropriate as follows: 4: 3: 2: 1, i.e. when making a decision on distribution financial resources When forming a business strategy, it is advisable to give priority to the quality of the product.
The marketing approach involves focusing the essence of a business (producing a product) on the consumer and saving him and the entrepreneur himself on expensive and, especially, non-reproducible resources.
The functional approach is based on the consideration of consumer needs as a set of functions, the implementation of which is necessary to satisfy the need. As a rule, with the functional approach, a new item (product) is created that satisfies the minimum total costs for the life cycle of the item per unit of its beneficial effect. Development chain of a business object: needs – function – indicators of the future object – change in the structure of the object.
The essence of the subject approach is to improve an existing subject (product), a business object.
Comparative characteristics of the subject and functional approaches are given in table. 6.2 and 6.3.
In his activities, an entrepreneur makes decisions of various types: organizational, legal, personnel, financial, etc.
Any decision on the organization of production should always be linked to the specific type and stage of the production process. So. At the pre-production stage, the entrepreneur searches for suppliers of the means of production he needs, ensures the creation of the necessary reserves for the uninterrupted functioning of production, and determines the frequency of supply of resources. During the production process, decisions on technical, technological, and personnel support are justified and made. At the stage of preparing manufactured products for sale, decisions are made on the most convenient and effective sales channels from the entrepreneur’s point of view, pre-sale preparation of products, and the formation of the required sizes of product lots. In the process of implementation finished products decisions are justified and made on organizing sales and marketing activities. Similarly, decisions are made on the formation of product, pricing and financial strategies, etc.
The technology for searching, accumulating, selecting and comparative analysis of entrepreneurial ideas is fundamentally as follows (55):
1. An entrepreneur searches for and accumulates ideas that could form the subject of his entrepreneurial activity. The accumulation of ideas is the result of an entrepreneur’s understanding of the conditions of the business environment: the market. market situation, level of development of science, technology and engineering. To accumulate and select entrepreneurial ideas, a bank of entrepreneurial ideas- this is a list of what could constitute (if necessary) the main or additional profile of a business organization.
2. From the accumulated volume, the entrepreneur selects specific ideas, which is carried out according to a set of criteria (56):
The effectiveness of the idea;
Prospects for gaining a strong position in the market based on the results of implementing the idea;
The duration of the period from the beginning of the development of an entrepreneurial idea until the transfer of the finished product to the consumer, which is the subject of this idea;
The amount of capital required to implement the idea, taking into account possible sources of its formation;
Availability of equipment necessary to organize production;
Availability of necessary raw materials in sufficient quantities;
Availability of a workforce of sufficient qualification level, etc.
When evaluating an idea for the feasibility of its practical implementation, it is necessary to resolve such issues (57);
Does the business organization have specialists capable of organizing the production underlying the idea?
Are there sufficient logistical capabilities to organize the production underlying the idea (buildings, equipment, technology, etc.)?
Is it possible to establish the necessary partnerships and receive from partners everything that is necessary to organize production?
3. Comparative analysis selected entrepreneurial ideas. The decision to choose the best idea from the point of view of the entrepreneur is made in accordance with the goals that he sets for himself. For example, an entrepreneur wants to enter the market with his product as quickly as possible. Based on idea A, he can enter the market with product in 6 months, with product B in 9 months; however, the implementation of idea B requires investing 1 million rubles, which he does not have, idea A - 100 thousand rubles, which he
possesses. In this situation, he will probably choose idea A.
4. As a result, the entrepreneur makes a decision: to begin or not to begin the practical implementation of the entrepreneurial idea. To do this he must:
Identify the current relationship in the market between supply and demand for the product that he intends to produce (58). If the analysis shows that the demand for a given product exceeds supply, then the production of such a product should be undertaken, and vice versa;
Find out what results he can expect when delivering goods to the market, i.e. what price he can expect for the product offered. To reduce the degree possible risk he should base his calculations not on some average or market price of a given (or similar) product, but on the extremely low price for a given market. If his pessimistic expectations in the future are not confirmed in practice, the effectiveness of his activities will be higher than calculated. If the assumption is confirmed, you can count on obtaining the expected effect based on the minimum acceptable degree of risk;
Establish the amount of own expenses associated with the production of goods (production costs). In contrast to determining the possible price, business calculations are based not on averages and running costs for the production of goods, but extremely high costs;
The possible effect (profit) from the implementation of the idea is revealed if the entrepreneurial decision is made. Based on a comparison of profits with the average industry rate of profit, a conclusion is made about whether it is advisable to start implementing a business idea;
Conduct a final expert assessment of the information received. Such an assessment will answer the questions: is the content of the idea compatible with the capabilities of the entrepreneur; does it make sense to continue working on the idea or should we move on to thinking about another idea.
Everyone chooses and uses their own technique for implementing an idea. At the same time, there are points common to all. When an entrepreneur is ready to implement his idea, the first thing he does is draw up a general scheme for its implementation (A.V. Busygin). The methodology for drawing up such a diagram comes down to recording the main stages in the process of interrelated actions aimed at achieving the specific result expected from the implementation of the idea. Often such a scheme is sketched out on paper, which makes it possible to comprehend it several times, returning to its analysis from time to time.
When the general scheme for implementing the idea is thought out, the entrepreneur once again checks the entire chain of necessary actions - whether everything is included in it, whether anything has been forgotten. At the same time, he is looking for answers to all questions that arise in order to have a complete understanding of how position 1, position 2, etc. can be resolved.
If an entrepreneur does not have answers for all positions at once, he usually highlights in some way on the diagram the position that requires additional search for a solution. This means that he does not yet know how to implement this position. He will leave the diagram for a while and return to it when he receives the answer and knows exactly how to solve this position.
When the general scheme for implementing the idea is clear to the entrepreneur in all aspects, he moves on to the next stage of its detailed presentation with the necessary calculations for the implementation of the project. In practice, two methods are used documentation the process of implementing an entrepreneurial project: business plan and feasibility study. The purpose of both documents is the same: to enable the entrepreneur to make sure that the project he is developing is economically feasible, i.e. will bring the effect that is inherent in the idea itself.
Topic 3. Entrepreneurial idea and management decision making
1. Entrepreneurial idea and criteria for its selection
The most important elements of a business idea are:
knowledge of a certain type of business activity;
knowledge of external factors that influence entrepreneurial activity;
desire to realize one's life goal, achieve recognition in society;
desire to become an owner;
the desire to constantly increase one’s well-being;
awareness of the need to work to the limit of one’s abilities;
a clear understanding of ways to obtain resources to create your own business;
the ability to choose the optimal organizational and legal form of the future enterprise;
knowledge of potential risks, ability to manage them;
knowledge of the basics of accounting and management accounting, the ability to organize them in an enterprise.
The sources of accumulation of entrepreneurial ideas are:
commodity market;
achievements of science and technology;
knowledge gained from studying various disciplines, including economics;
presentations, meetings, conferences, symposiums, exhibitions, etc.;
ideas of potential competitors;
Entrepreneurial ideas are born: on the basis of knowledge of the patterns of demand; based on an analysis of an already produced product.
Entrepreneurial ideas accumulate in a certain direction related to the entrepreneurial activity of a given subject.
From the accumulated ideas, the entrepreneur selects the most promising ones that meet his specific production conditions.
After selecting the required idea, its specific analysis is carried out based on specific economic indicators.
As selection criteria, the most promising ideas speakers:
effectiveness of the idea;
prospect of conquering the market;
the time required to implement the idea;
the amount of capital required to implement the idea;
availability and price of resources;
availability of the necessary labor force.
2. Technology for making entrepreneurial decisions represents a sequence of actions combined into a logical system that provides analysis of alternative options and identification of the most effective, from the point of view of the goal, taking into account the potential capabilities of the company.
Each entrepreneur has his own individual decision-making technology. The decision can be made based on intuition. In this case, intuition refers to unconscious knowledge gained as a result of experience. This method is usually called intuitive. To use it you must have great experience entrepreneurial activity.
However, decision-making technology is still based on a real decision-making method. This method is based on logically interrelated and calculated conclusions.
In practice, entrepreneurs use both methods simultaneously. Essentially a combined method - real-intuitive. For a novice entrepreneur, the real method prevails in decision-making technology. For an experienced entrepreneur, a significant component in decision-making technology is the intuitive component.
The generalized technology for making a business decision can be graphically presented in the form of a block diagram (Fig. 1).
Fig 1. Scheme of technology for making entrepreneurial decisions
The first technological stage of decision-making is the acceptance of possible alternatives (projects) for consideration.
At the second stage, the entrepreneur evaluates alternatives. In other words, it reveals their essential features and logic.
At the third stage, for each project, the requirements that must be met for its implementation are identified (the need for specific resources, technologies, financing, etc.).
At the fourth stage, specific actions necessary for the implementation of the project are determined (form of raising funds, procedure for implementing funds, procedure for implementing production, etc.). Here an economic calculation is made to estimate the cost of these actions.
The fifth stage involves calculating the likely economic effect taking into account the reasonable worst-case scenario.
At the sixth stage, options for pessimistic and optimistic calculations of the economic effect are compared. This comparison shows the likely range of possible effect.
At the seventh stage, the projects accepted for consideration are compared. This comparison is made based on the entire set of qualitative and quantitative characteristics identified at the early stages. This stage is technically the most difficult.
For example, one project promises the greatest economic benefit, but requires significantly more resources and is more risky. In this case, an expert assessment of the feasibility of the choice is possible. But other, more formalized options are also possible.
The final eighth stage is aimed at choosing one of the alternatives. It involves making a decision to implement the chosen alternative.
It should be noted that as the number of initial alternatives increases, the decision-making process on them becomes much more complicated. Therefore, at the stage of accepting possible alternatives for consideration, one should strive to minimize their number. To do this, you should make maximum use of a priori information and intuition.
Typically, an experienced entrepreneur leaves 2-3 alternatives at this stage for further consideration. The last two stages always require a certain amount of intuitive approach. From this it becomes clear that only constant practice in combination with theoretical training ensures the success of entrepreneurial activity.
Topic 3. ENTREPRENEURIAL IDEA AND MANAGEMENT DECISION MAKING
The most important elements of a business idea are:
knowledge of a certain type of business activity;
knowledge of external factors that influence entrepreneurial activity;
the desire to realize one’s life goal and achieve recognition in society;
desire to become an owner;
the desire to constantly increase one’s well-being;
awareness of the need to work to the limit of one’s abilities;
a clear understanding of ways to obtain resources to create your own business;
the ability to choose the optimal organizational and legal form of the future enterprise;
knowledge of potential risks, ability to manage them;
knowledge of the basics of accounting and management accounting, the ability to organize them in an enterprise.
The sources of accumulation of entrepreneurial ideas are:
achievements of science and technology;
knowledge gained from studying various disciplines, including economics;
presentations, meetings, conferences, symposiums, exhibitions, etc.;
ideas of potential competitors;
Entrepreneurial ideas are born: on the basis of knowledge of the patterns of demand; based on an analysis of an already produced product.
Entrepreneurial ideas accumulate in a certain direction associated with entrepreneurial activity of this subject.
From the accumulated ideas, the entrepreneur selects the most promising ones that meet his specific production conditions.
After selecting the required idea, its specific analysis is carried out based on specific economic indicators.
The criteria for selecting the most promising ideas are:
effectiveness of the idea;
prospect of conquering the market;
the time required to implement the idea;
the amount of capital required to implement the idea;
availability and price of resources;
availability of the necessary labor force.
2. Technology for making entrepreneurial decisions represents a sequence of actions combined into a logical system that provides analysis of alternative options and identification of the most effective, from the point of view of the goal, taking into account the potential capabilities of the company.
Each entrepreneur has his own individual decision-making technology. The decision can be made based on intuition. In this case, intuition refers to unconscious knowledge gained as a result of experience. This method is usually called intuitive. To use it, you must have extensive business experience.
However, decision-making technology is still based on a real decision-making method. This method is based on logically interrelated and calculated conclusions.
In practice, entrepreneurs use both methods simultaneously. Essentially a combined method - real-intuitive. For a novice entrepreneur, the real method prevails in decision-making technology. For an experienced entrepreneur, a significant component in decision-making technology is the intuitive component.
The generalized technology for making a business decision can be graphically presented in the form of a block diagram (Fig. 1).
Fig 1. Scheme of technology for making entrepreneurial decisions
The first technological stage of decision-making is the acceptance of possible alternatives (projects) for consideration.
At the second stage, the entrepreneur evaluates alternatives. In other words, it reveals their essential features and logic.
At the third stage, for each project, the requirements that must be met for its implementation are identified (the need for specific resources, technologies, financing, etc.).
At the fourth stage, specific actions necessary for the implementation of the project are determined (form of raising funds, procedure for implementing funds, procedure for implementing production, etc.). Here an economic calculation is made to estimate the cost of these actions.
The fifth stage involves calculating the likely economic effect taking into account the reasonable worst-case scenario.
At the sixth stage, options for pessimistic and optimistic calculations of the economic effect are compared. This comparison shows the likely range of possible effect.
At the seventh stage, the projects accepted for consideration are compared. This comparison is made based on the entire set of qualitative and quantitative characteristics identified at the early stages. This stage is technically the most difficult.
For example, one project promises the greatest economic benefit, but requires significantly more resources and is more risky. In this case, an expert assessment of the feasibility of the choice is possible. But other, more formalized options are also possible.
The final eighth stage is aimed at choosing one of the alternatives. It involves making a decision to implement the chosen alternative.
It should be noted that as the number of initial alternatives increases, the decision-making process on them becomes much more complicated. Therefore, at the stage of accepting possible alternatives for consideration, one should strive to minimize their number. To do this, you should make maximum use of a priori information and intuition.
Typically, an experienced entrepreneur leaves 2-3 alternatives at this stage for further consideration. The last two stages always require a certain amount of intuitive approach. From this it becomes clear that only constant practice in combination with theoretical training ensures the success of entrepreneurial activity.
