Foundations of decision making

Coke Vs Pepsi: In the battle to sell the most soft drinks, who dominates the beverage market? Who has the best advertisements and the best celebrities representing them? Whose product tastes the best? These questions have driven the competition between Coca-cola and Pepsi for decades – a battle for dominance in the soft drink marketplace. This fierce competition and its high stakes and winner take all mentality help explain why information about one’s competition is so critical. Because this information is so important, to what extent executives from these two companies are willing to go to make their company number one in the market? That answer may surprise you.

Early in 2006, Pepsi executives received a letter on Coca-Cola letter head from an individual who was offering information that might be of value to Pepsi executives. That information, if Pepsi wanted it, would include the recipe for Coke products as well as a sample of a new product Coke was about to launch in the marketplace. The letter sender was asking $ 10,000 to reveal this information.

Imagine if the information were true! What a coup it would for Pepsi to have knowledge of the Coke recipe, something that only about five people in Coca-Cola have access to and clearly one of the best guarded secrets in the industry. Such information could significantly affect the competitive war between these to soda giants. But instead of paying $ 10,000 to get the closely guarded secrets, Pepsi executives contacted the FBI, a Pepsi spokesperson explained the reason for this decision, Competition must be fierce but it also must be fair and legal.

What followed was one of a corporate executive’s greatest fears. Based on surveillance work and hidden cameras the FBI determined that the threat was real. They discovered that one of the executive’ administrative assistants had in fact stolen the Coke recipe. She, along with two accomplices, was taking sensitive information copying it and putting it together to sell to Pepsi. They were also seen on hidden camera stealing a sample of Coke’s new product from the company’s premises. Through a series of investigative techniques, a sting was set and the culprits made contact with FBI agents and Pepsi executives. After exchanging the information for cash, the culprits were apprehend and charged with wire fraud and unlawfully stealing and selling trade secrets from the coca-Cola Company.

Pepsi’s ethical executives’ actions are exemplary, but the story doesn’t end there. Coke executives recognized they must review all security measures in protecting company secrets. Nothing could be left to chance or to the assumption that loyal wouldn’t do something anything like it again. That these individuals gained unauthorized access to something that was so critical to the company’s success showed a serious lack of internal controls and security procedures. Coke executives learned significant lesson thanks to some Pepsi executives who did the right thing.

Managers make lot of decisions – some small and some large. The overall quality of those decisions goes long way in determining an organization’s success or failure.

The decision making Process:

Decision making Process>>>

A set of eight reps that includes identifying a problem, selecting a solution, and evaluating the effectiveness of the solution.

Decision making is typically described as choosing among alternatives, but this view is overly simplistic. Because decision making is a process, rather than simple act of choosing among alternatives. The decision making process as a set of eight steps that begins with identifying a problem and concludes with evaluating the decision’s effectiveness. This process is as applicable to your decision about what you’re going to do on spring break as it was to J P Morgan and Bank One executives, who were considering combining companies. The process can also be used to describe both individual and group decisions.