Q2. A CASE ON MANAGERIAL DECISION MAKING

(3 marks)

You probably wouldnt know quite what to expect from a business named Pyro Media, but

youd figure it was going to be something pretty unusual. Grace Tsujikawa Boyds business, Pyro Media, has pursued a pretty unusual direction, but the decision to do something different wasnt made randomly or without thought.

Boyds Pyro Media started as a manufacturer of huge ceramic glazed pots such as the ones you might see holding trees or plants in the lobbies of large hotels. Using her degree in arts, Boyd herself initially made the high quality glazed pots, which sold for about $ 1500 each. As her business grew to the point at which it had backorders of 8 to 12 weeks, Boyd decided it was the time to move to a bigger facility and invest in the equipment and employees. She says, We were in the business making money and assumed that business was going to grow at the same rate it had been. Grace soon found, however that Pyro medias revenues had been but instead were dropping off. Upon investigating the situation, she found that big corporations had begun importing and distributing terra cotta planters, essentially stealing away her business.

Boyd knew that she had to do something. She had invested in equipment, a 56000 square-foot facility, and employees who knew ceramics. She called in some consultants to see what other markets her business might pursue. This study, which took about 6 months, recommended that Pyro Media look into high-tech ceramic applications: In other words, take the same technology that Boyd had developed and using in making ceramic pots and apply it to a new area. On the basis of that information, Boyd hired a ceramics engineer and went after the ceramics castables market. The companys decision to move into this new market proved to be successful.

Recognizing that business was falling off and analyzing the reason behind the loss of revenue was instrumental in Pyro Medias continued success. Boyd says that being able to recognize a problem is critical, especially for small businesses. Why? Because small businesses have no money or time to waste. If problems are ignored and not analyzed, the business might face quick failure.

1. How could Boyd have used the decision making process to help her make the decision of moving into a new market? (3 marks)

2. How would you characterize such a decision making as structured or unstructured?

(3 marks)

3. Describe how Boyd could have used each of the following to make better decisions:

a) rationality, b) bounded rationality. (3 marks)