Theme actuality is imposed by a very underused and underestimated aspect of the managerial [613220]
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INTRODUCTION
Theme actuality is imposed by a very underused and underestimated aspect of the managerial
activity – the decision -making process. Usually, almost all of the present firms of Republic of
Moldova are making the decisions spontaneously, or simply using a brainstorming technique
with the people occupying the related to the problem posts. In this work will be told about the
advantages of following a strictly structured process, which takes in consideration the aspects of
the environment realit y, such as risks possible profits and losses that may occur, in order to
ensure an effective and positive follow -up of the decission, easily adapting to the nearest future.
The purpose of the work is to relatate about the ways a decision -making system may be
created/improved in the organizations, aswell as the what field is needed to implement it and
successful exploit.
Tasks of the work:
1. Making clear what a decisional system is;
2. Understand the process of decisio -making;
3. Understand the requirements of a good -working decision -making system and how to meet
them;
4. Study the decision -making system in a concrete organization, with it`s impact over the
economico -financial situation;
5. Find the lacks and a method to improve the existing decision -making system at the studied
organization.
The subject of the research was “Moldcell” SA.
Methodology of investigation has varied, including observation, interview and implication in the
business processes of the subject of research – in the management field as i n executive field.
Theoretical value is to understand the actual level of aplication of the management techniques in
big firms, with a good reputation and a long term of successful activity and find out the impact
they have over the firm.
Practical value i s understand the quota of theory that is applied in big enterprises and the actual
mechanism by which the managerial processes work.
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The structure of the thesys consists of introductory part, 3 chapters , conclusion,
recommendations and appendixes.
In chapter 1, “Theoretical concept of decisio -making system”, the author speaks about the
decision -making system as a concept and the classification of decissions. Also it is spoken about
a theoretically perfect process of decision -making that should be present in the enterprises of all
levels and dimensions, aswell as abouth the methods achieve it, using the present decision –
making system.
In chapter 2, “Analysis of the financial -economic activity of enterprise” there is a detailed
description of the firms`s fin ancial -economical activity and of the decisional system of the
enterprise on the inferior and middle management, with it`s defficiences and a detailed plan of
improvement.
In chapter 3, “Moldcell`s assortment enlargement decission” is offered a decision po int with 2
variants of innovational product implementation. The products are touching the specific of
products sold by “Moldcell” SA and are described with all the necessities required for it`s
implementation, aswell mentioning the possible risks and the outcome of the products
implementation.
The basic literature that was used in this work is:
Ovidiu Nicolescu – Management (editia a III -a revizuita )
Patrick M. Wright și Raymond A. Noe – Management of organizations
Bulimaga, T Note de curs. Informational and communicational management
Simon, H. A. – The new science of management decision .
Alter – A work system view of DSS in its fourth decade . Decision Support Systems .
Silver – Decisional guidance for computer -based decision support .
In conclusion, there can be outlined that at “Moldcell” SA the overall economic analysis of the
enterprise shows that the firm in the period of 2012 -2013 has increased it`s value of assets in
order to improve it`s future revenues. The point is that it had to face the increasing costs for it`s
overall activity, which have damaged the firm`s gross and net profit, making it less in the future
periods than in 2012. Also, during all 3 years, there has been seen that the most stable capital of
the enterprise – the owner`s equity is incapable of sustaining the long term assets, which later
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may lead the firm to selling of a part of these assets in order to deal with the loans. This places
the firm in a catastrophical zone of risk. Knowing that, the were made decisi ons in order to
stabilise the parameters that were damaging the firm.
From the pont of management, it was difficult to believe, but 80% of every managerial activity
performed by the studied organization was in a very close relation with the theory. Unfortu nately
la last percentage was reagarding the decizion -makind system. So there were made proposals for
improvement in this area.
Chapter 1. THEORETICAL CONCEPT OF THE DECISION -MAKING SYSTEM
1.1 The Managerial Decision Concept
In management, the purpose of the decisional act is to consciously guide the economic and
social activity of a commercial society. By its content, nature, and role, the decision was the vital
nerve of the firm`s management. Making a decision is a process of changing the reality, the
natural, financial and human resources of the unit, contributing to the changes of the
system objective of necessity and, implicitly, to achieve the economic -social optimum of the
autonomous administration or the commercial company. Improving societies man agement –
commercial complexity, the complex solution of the big economic and social problems, the
entire current managerial activity and the perspective is connected in one way or another with the
adoption and the realization of the decisions.
The decisi on is a link in the managerial process. At the same time, the decision is his nodal
point, the culminant moment.
Concrete expression of social management functions fathers the goal of unity, decision is
the means by which the goals are achieved. Subordinate to the objective, the decision is the act
whereby a certain line of conduct is decided to achieve the objective, including the action, those
and lens paths. In fact, the decision appears as a solution chosen by the manager, from sev eral
possible variants, based on significant information, in order to coordinate and regulate the
subordinate activities, as well as their control and forecasting. It follows that the decision appears
as an implicit process by which a function holder makes an analysis and choice that affects the
behavior of other functionaries and their contribution to the achievement of objectives of the
firm.
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The role of management decision in a commercial society
In the managerial process of society, the decision -making plan establishes the objectives
derived from the plan and the modalities for their realization, the corresponsive means,
harmonize actions and behavior of employees, executes the improvements and corrections
necessary for the efficient conduct of th e activity in the commercial society.
The functioning of the economy of the commercial company in accordance with the
imperatives of the economic and social optimum is in close dependence with the quality of t he
decision -making process. Are common situations where the adoption of a decision can create an
opening in managerial practice regarding a situation , the decision plays the role of an instrument
for directing and shaping the future of the trading company. Also with the help of the decisions
the manager exerts an active influence on the concrete forms of the social relations of the
employees with management , changes them within certain limits so that they contribute to a
ma increased creativity growth and growth of the productive forces and the satisfaction of the
social needs as much as possible.
The particular role of the decision in the management of the commercial company
is stressed by the fact that through it the place of each organizational link is determine the
companies , each su bunit and each employee to solve the expected tasks. Also with help people
coordinats space and time resources and themselves ensure rhythm in
the accomplishment of plan tasks.
The decision conceives a situation of choice in the form of a me ntal picture or an explicit
model. In the case of the model, it is necessary for the conceptualization to be implemented –
which is a function of the experience of the manager and the other managerial staff requires, the
selective character of their perc eption and judgment applied to the economic problem
situation data and social aspects of the unit. If we add to this a thorough knowledge of the
content of the decision system appear the factors necessary for rational orientation,
substantiation, adopti on, application and control -evaluation of decisions. The special diversity
of managerial decisions highlights the need to know the typology of these decisions to
rationalize its components for adoption and the application of higher quality decisions.
The level of elaboration, content and scope, knowledge of the phenomenon managerial manners,
source of elaboration, etc. The choice of classification criteria is determined by the theoretical
and prac tical needs of the management of economic unit.
Regarding actions in terms of functional content, managerial decisions can be divided into
planning, organizational, coordination, incentive and control decisions. We can find decisions
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that refer to several functions of management at the same time of th e autonomous company or
the commercial company. However, in every decision we can distinguish the domin ant function
of the management .
În raport cu nivelul de elaborare, deciziile se clasifica în stra tegice, tactice, operationale.
Deciziile strategice sta bilesc orientarile ele perspectiva, în sensul ca se refera la o perioada mai
mare de un an, se adopta în colectiv, vizeaza ansamblul activitatii economice a societatii comer –
ciale sau principalele sale componente si urmaresc realizarea obiectivelor fundamentale sau
celor derivate de gradul 1. Tactical decisions translate into objective s derived from Grade 2 or
specific, are for a period of less than one year and refer to an activity or sub -activity of –
commercial traditions. Working on solving current problems Operational decisions are usually
repetitive, routine decisions, refer to short periods of maximum a few weeks, are adopted by the
middle or inferior managers of the commercial company, aiming to achieve the specific and
individual objec tives, or the attributions and tasks.
Depending on the certainty of achieving the distinct goals gambling certain, uncertain and
risky decisions. In the case of certain decisions, the evolution of the variables involved can be
accurately anticipated, the y can be controlled and the realization of the objectives can be
followed with maximum concreteness. Unlike the first group, in uncertain decisions the
evolution of variables can be anticipated by approximation, they are less controllable, and the
ability to achieve objectives do not show enough concreteness. In case of risk decisions, the
sample the achievement of objectives is reduced, the evolution of variables is
difficult to anticipate , although some of the variables can be controlled.
With regard to risk decisions, to prevent the possibility of risk being transformed into
reality, followed by the respective financial consequences, necessary measures are taken to
prevent the occurrence of negative consequences . Among them we mention:
a) the creation of a special fund to cover the shares affected by a high degree of
uncertainty ;
b) contracting of insurance against risks;
c) divi zation of risk, avoiding single -exclusive links;
d) using economic forecasts and research the operational co untry;
e) ex perimentation at a reduced scale of the solutions on which there were made
decisions;
f) for longer -term operations to establish several variants that can be applied at the right
time.
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After the decision maker's sphere, we can calssify the decisions in : individual and
collective. Individual decisions is adopted by a single management framework, according to
norms that determine the limits of the respective intervention. Unlike this, collective decisions
are of a broader nature, in which the y are engaged the policy of the commercial society and
implicitly its development and progress. It is adopt ed at the level of the general assembly the
shareholders, the board of directors and the steering committee, is the way to achieve
participatory management and involves an effort and a higher time for elaboration. It`s more like
group creativity act , it`s adoption ensures understanding of the existiong opinions regarding the
problem and the corresponsive argumentation . From a functional point of view, collective
activity in decision -making can range from simple co -operation, to parts effective collectiv e
redundancies.
Situational conditions and requirements
The rational process of choosing a line of action in order to reach a certain result, the
decision implies the existence of certain main conditions, namely:
a) there is the temptation of one or more objectives to be achieved, precisely defined,
quantified and accompanied by a rigorous measurement system for their achievement;
b) the existence of several alternatives of action from which to choose the solution for
attaining Goal Objective;
c) the existence of the limiting and economic factors, namely those related to the time
resources, money resources, labor resources, production possibilities and others, of the
technicians, by understanding the factors related to the engineering analysis an d the elaboration
of the requirements towards the technical characteristics of the objects (gauges, weight, strength,
reliability, precision, tempe – rity conditions ), as well as social ones, including the human ones
with the implications of human ethi cs and morality.Exis the temptation of these conditions has
particular incidents on the organ's framework in the sense that any component of this conditional
framework or any action often fastened within its perimeter must fully conform to the situat ion
situation described above.
Functionally, management in efficient social conditions the commercial decision -making
process requires the res pectaries by the manager and by the collective management bodies –
requires a set of requirements:
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a) scient ific substantiation of of the company for the management of the commercial
company on the basis of the real study economic and social fathers of the unit and in
the compliance with the specific laws of the econo transition phase market share;
b) doubling the formal authority to adopt the decision by the general meeting of
shareholders, the board of directors , the steering committee or the manager with the informing
authority generated by the professional value SiO and capable of en suring the quality and
efficiency of the decision, as well as its application with minimal effort;
c) real principle fundamental of social management commercial decision -makers
and decision -makers by integrating vertical decisions (correlatin g the decisions taken by each
manager with the decisions taken at higher and lower hierarchical levels) and horizontally (core –
decision making on other acts vita of the commercial company similar to the involved activity,
so the decisions taken by the managers of the situations on the same hierarchical level);
d) fitting into the optimal decision -making period, through a balanced, balanced and based
on co – relative of the qualitative and temporal factors, subor donated to the objectives included
in the business development plan;
e) providing a forum clear, concise and containing the objective and the operational
parameters (the way of responsible for the application, place and term of implementation the
amount of resources allocated, the financ ing source hard, expected effectiveness).
Primary factors of managerial decision
In the management of the commercial company me decisional mechanism is based on two
constituent elements:
a) the decision -making factor or the decision -maker;
b) the environment in which the decision is adopted.
Regardless of its level and nature, the decision -making act necessarily presupposes the
existence of the decisional body, presented by a person (the manager, the chairman of the board
of directors, the chair of the dietary committee) or through a team (the board of directors, –
steering wheel).
As a managerial tool and social -human relationship, the managerial decision implies the
firm`s staff, forcing them to act in a way, by which the result can be obtained fitting the time
limits . The decision is taken by the people and it is transposed into people’s life. It is an act of
voices uniting together with a commitment of the decision -maker personality. If we add to this
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the elements of re sponsibility and risk we get the main psychological sides of the decision
making process.
In recent years, profound changes have occurred in the field of economic unit management,
mainly due to the fact that the decision -making problems have been quantit atively and
qualitative amplified. In the process of making decisions often occurs common conflicting
elements regarding the setting of objectives the maximum efficiency, its justification and the
ways to achieve it. The decision triggers an action, on e of several possible, excluding the others,
that it carries a great responsibility. The elements of choice and concern for the efficiency of the
whole activity of the commercial company are the main aspects of any managerial decision.
In the decision maki ng process, the human factor, the decision -maker continues t o have a
dominant role. In this process, the characteristics of the individual or collective decision -maker
have a considerable influence. The psychological side that participates in the proces s of
evaluation of possible decisions play an important role, because adoption of a decision
presuppose the involvement of the whole human personality, it`s will and it`s responsibility . As
such, it becomes necessary to know the individual particularitie s of the decision -makers. In this
connection, some psychological characteristics can be cultivated, such as imagination, the
willingness to react, the objectivity, the habit of documenting and the spirit of continuing the
actions that have begun.
The dynam ism and complexity of the trading company, interrelations between them and
the decision -making process rise the necessity of preparation of the manager . Active learning
method, is used so that to ensure the formation and development of econo mical skills of the
manager. With this method, he manages to address the commercial society as a system and to
know the interdepende ncies of the main actions involved, gets the opportunity to test the fertile
variants of unit development strategies and policie s, experience the use of basic economic levers
to increase the efficiency of the company's business.
The second factor in the decision -making process, the environment , tends to become more
and more complex. Its elements may favor the adoption of decisio ns ratio (in trading system ,
planning system) increase, increase the level of staff training, development of the economic
superstructure, the extension of the price system automatic data mining, level
elevation of technical -material producti on, development of plant research, development of
ecnomic co-operation , technichs of international production and others), but they can also
disadvantage this process (increasing the size of the company, reducing the cycle –
his product life and technologies, increase of economic knowledge, technical
and scienti fic knowledge , competence on the external market, the crisis of raw materials and
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energy etc.). To be remembered as a decision, these elements translate into a spirit o f variables
that appear and change greatly fast. As a result, it is required that the decision to be as rational
as possible, to assess with greater pre cision the elements involved , even knowing that even small
errors can attract the wasting of huge huma n, material and money means. At the same time,
decisions need to overtake the next actions, thus providing the necessary time to adequately
prepare the human, financial, technical conditions, and the decision -making process to be carried
out with high effi ciency.
1.2 Classification of Decision
The decision, the primary component of the decision -making system, is an essential
element of management, being its specific tool of expression. In fact, the qualitative level of the
leadership of an organization is manifested by the elaborated and applied decisions. The
management decision represents the process of choosing a line of action in order to achieve
goals, the application of which influences the activity of at least one other person than the
decision -make r.
The decisions may be classified as:
1) After the scope of the decision, there are:
– participatory decisions
– individual decisions
2) After the time horizon and implications, can be:
– strategic decisions
– tactical decisions
– current decisions
3) The frequency with which they are adopted are:
– periodic decisions
– unique decisions
4) After the managerial line at which it is adopted:
– decisions taken at a higher level
– decisions taken at medium level
– decisions taken at a lowe r level
5) Following the nature of the variables that influence potential outcomes, there are:
– decisions based on certainty
– decisions based on risk
– decisions based on uncertainty
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6) Upon their anticipation, they can be:
– early decisions
-unpredictable decisions
7) After no. of the persons taking part in the decision, we have:
– individual decisions
– group decisions
8) By number of decisional criteria, there are:
– unicriterial decisions
– multi -criteria decisions
The first grouping of decisions focuses on the importance of the objectives pursued, from this
point of view decisions are classified into:
– Strategic: those decisions that concern the overall activity of the economic unit; its major
problems extend over a longer period of time. As a rule, strategic decisions concern issues
related to organizational development.
– tactical: are those that relate to partial activities, simpler and more concrete issues derived
from their general objectives and objectives and which extend ov er periods of time, usually less
than one year, often a semester, a timesty or a few months . If strategic decisions fall within the
competence of strategic leadership, tactical decisions can be taken at other levels of the
organization.
– Current; those decisions that relate to the daily problems faced by organizations and which
obviously need to be resolved operatically. They take on all the management's routines, being
more common at the middle and lower levels.
From the point of view of their frequenc y, decisions are classified into:
– Periodic: which are taken at certain time intervals, usually with the beginning of some time
periods. Such decisions can use models that can ease the work of the decision maker and give
more precision;
– non-period ic, characterized by the fact that they have a large irregularity. Such decisions can
not be prepared in advance and, as such, modern methods can not always be used in their
elaboration;
– Unique, characterized by the fact that they are taken in exceptiona l situations that do not
happen again.
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Depending on the hierarchical level at which they are taken, decisions can be:
– top-level, when elaborated by senior management of the organization,
– average level, when taking the average level of management, resp ectively at the level of heads
of services, sections, workshops;
– inferior level, when they take the level of team or office bosses. This grouping of decisions is
correlated with that of the importance of the objectives pursued, in the sense that, at the level of
the senior management, preponderance is the strategic decisions, and at the level of the
management inferior, preponderance has its current decisions.
Another criterion for classifying decisions refers to the degree of knowledge of the probability of
the results. There may be certain or uncertain decisions, risk decisions and uncertain decisions.
Decisions can also be classified according to the decision maker's sphere, in:
– individual decisions, individually assessed by the manager. Normally suc h decisions are found
more frequently at the middle and lower management levels. They usually target the current
problems faced by those managers, having an operative character;
– collective decisions, elaborated at the level of senior management by the pa rticipatory
management bodies of the unit. At their elaboration participate a large number of specialists and
employees who work in production, each bringing experience and specialized knowledge.
Collective decisions are rigorously based and have the quali ty to be received more quickly and
easily by executives.
Another classification of decisions
Simon groups the decisions according to the extent to which the decision -making process can be
pre-planned, whether scheduled or unscheduled.
Types of decisions Characteristics
Progra mmed
structured Repetitive routines, known, often automated decision -making
rules and processes usually involve "things" rather than
people, can be delegated to the bottom of the organization.
Unprogrammed
Unstructured New , non-rogue, decision rules are not known, have a high
degree of uncertainty, can not be delegated to inferior levels,
may involve "things," but always involve people.
Figure 1.1 Decissions classification
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These two categories must be considered as two extremes in the decision -making sphere. In
reality there are a number of decisions that possess characteristics from both groups.
Another classification of decisions can be made according to the degree of knowledge of the
decision -maker regarding the ou tcome of the different alternatives. Thus, there are decisions on
the basis of certainty, risk and uncertainty.
In the case of certainty and risk conditions, there are different optimization techniques, but in
case of uncertainty, theoretically there is not enough data for the decision to be taken. The reason
lies in the fact that, by definition, making a decision means choosing between alternatives, and if
these are not known, the choice can not be made. In practice, the decision is made using
reasoning and available information, estimating the values and probabilities of occurrence of
possible outcomes. Practically, uncertainty turns into risk.
State of result Explicati ons
Certitude There is only one result for each alternative and there is
complete and accurate knowledge about it.
Risk There are more possible outcomes for each alternative and
each can be assigned a value and a probability of achieving
the results.
Uncertitude The number of results, values and probabilities are not known.
Figure 1.2 Decission conditions
The tactical level is intermediate and combines the characteristics of the other two levels. At the
strategic level, decisions are more dependent on the human factor and the human judgment. Such
decisions are based on the test and error method due to the high degree of uncertainty and
ambiguity as well as the fact that all possibilities can not be explored. This type of decision –
making process is called heuristic and is based on the "finger rule" rather than explicit decision
rules . Operational and tactical levels have developed formal support for decisions such as, for
example, optimization models.
According to Peter Drucker "Decisions should be taken at the lowest possible level, consistent
with their nature, and as close to the a ction as they are supposed to." Today there is a tendency to
achieve this, and for this reason there are systems that assist management decisions, specific to
each managerial level.
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The other classifications of the decision take into account criteria relat ing to: the number of
persons taking part in the decision (1), the periodicity of the decision (2) and the number of
decisional criteria (3).
1) the number of people participating in the decision
– unipersonal decisions that are grounded and elaborate d by a single person, referring to the
organization's current problems; – group decisions whose foundation is the fruit of working a
certain number of people.
2) the periodicity of the decision making
– regular decisions made at certain time intervals ; – random decisions adopted at irregular
intervals, difficult to anticipate, the necessity of their substantiation being determined by
uncontrollable factors; their effectiveness depends decisively on the decision -making potential of
the decision -maker; – unique decisions that are an exceptional case, not having precedents and
which will probably not be repeated in the near future; their effectiveness depends decisively on
the decision -making potential of the decision -maker.
3) the number of decisiona l criteria
– one-way decisions involving the comparison of alternatives on a single criterion; – multi –
criteria decisions where the different alternatives are compared by reference to two or more
criteria.
Typology of decisions
A manager adopts a variety of decisions to solve the problems they face. Thus, if you consider
the time horizon and its implications on the organization, decisions can be:
– Strategic, with long horizons of time, less detail of goals and immediate impact on the
organization as a whole.
– tactical, with variable time horizons, from one month to one year, degree of goal detail,
inversely proportional to the time horizon.
– current, with small time horizons and impact on a process or structural component of the
organization.
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Taking into account the nature of the variables involved and the possibilities of anticipating the
results, the decisions are:
– Certain, where the variab les are controllable, and the anticipation of the results is done with
precision.
– uncertain, with partially uncontrollable variables and approximate anticipation of the results.
– risk, where the variables are uncontrollable, and the determination of the results is made with a
certain probability.
Another important element in delimiting decisions is the size of the decision, which is the
criterion that decisions are:
– Individual, adopted by individual managers, located at different hierarchical levels.
– by group, adopted by participatory management bodies.
The scope of the decision -maker's competences allows two types of decisions to be addressed:
– endorsed, which can not be operational without the consent of managers located on a
hierarchical level.
– independent (independent), specific to a manager, individually or in group, with full decisional
autonomy.
In substantiating and adopting decisions, the number of decisional criteria in relation to which
decisions are delimited in:
– multi -criteria, when t he decision -making problem to be solved is based on a multitude of
criteria.
– unicriterial, where the decision is made according to a single decision criterion (maximized or
minimized).
Frequency of decision making leads to more types of decisions being f ound:
– Random, adopted depending on the occurrence of problems requiring the manager's
intervention.
– unique, usually adopted, once in the organization's "life".
– periodicals, adopted at regular intervals (year, semester, quarter, month, etc.)
The locat ion of the decision maker in a certain "floor" of the management allows the delimitation
of three types of decisions:
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– top-level, adopted by participatory management bodies or higher -level managers (general
manager, executive managers).
– of medium level, adopted by managers of functional and operational compartments.
– lower level, adopted by managers in the lower management line (foremen, etc.).
1.3 Process of Decision -making
Any decision -making process is accomplished by going through several specific steps, which in
turn contain a series of phases and subphases that must be achieved for its performance in good
conditions.
In order for a decision -making process to take place in good conditions it is necessary to
always go through these stages and phases and to take into account all the specific problems that
arise.
Stage I of the process decision -making process, that is the preparation of the decision, is a
particularly important stage, but which, in most cases, is not given du e importance in practice,
going to the more advanced phases of the process. This way of working does not benefit
management activity, as this is a stage where the scale of the leadership activity and how to
handle the next steps depends.
The second stage is choosing the optimal solution and making the decision is, from the point
of view of the outcome, the most important stage and should be best substantiated.
Stage III , the implementation and control of how to make the decision, involves a la rge
number of activities related to the transmission of the decision, which involves drafting the
decision. It must be concise, clear and be understood by those who implement it. Once the
content of the decision has been written, the responsibilities have to be clarified.
In the process of transforming the decision into action, the methods and the management
style have a very important role.
It is considered that the decision -making process is concluded by controlling the way the
decision is mad e, that is, the pursuit of the fulfillment of the provisions of the decision.
The way in which the decision was made and the results obtained will depend on whether the
decision applies exactly if the content of the decision is modified by correction or addition, even
if the decision can be erroneous and abrogated. The correction of their own decisions or their
abrogation must take place through the decision of the managers.
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Stages of decision –
making Phases of the decision –
making process Specific elements of each stage
I. Preparation of the
decision A) Clarification of the
issue that is the subject
of the decision the reality of the problem
the category of problems it falls into
priority level
B) Separation of the
current task problem regulating the problem
C) Determining the
degree of novelty of the
problem the new issue
method problem
the routine problem
D) Specifying in time
and space and defining
the problem complete definition of the problem
redefining the issue (as appropriate)
II. choosing the
optimal solution
and decision
making A) The analysis of the
facts with the help of the
information and the
elaboration of the
variants collecting and processing information
developing variants
analysis of facts based on the principle of
selective argumentation
B) Choosing the right
solution and making the
decision choosing the optimal solution considering the
usefulness of the alternative, the time factor, the
risks
III. Applying and
controlling how to
make the decision A) Transmitting the
decision clear drafting of the decision
establishing tasks and responsibilities, with
their accomplishment
transmission of the decision
B) Transforming the
decision into action taking action to achieve the goal of the
decision
C) Control over how to
make the decision monitoring the fulfillment of the provisions of
the decision
reverse link
correcting the decision (if necessary)
Figure 1.3 Stages of decission making
The way in which decision -making takes place depends very much on how decisions are made.
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Thus, in the case of the planned decisions, in which the way of action is known in
advance, an application of the stages of the decisional process through approval or denial is
made.
In the case of semi -programmed decisions, besides the existing programs, a se ries of
analysis processes are required, following a combination of the existing elements.
When dealing with unscheduled strategic decisions, the decision -making process takes
place totally, to the smallest detail.
The decision -making process differs as the decision is unipersonally or grouped.
In group decisions, issues related to the assessment of the utility of the different variants
(the qualitative level of some in relation to others) have to be made in a way that takes into
account the group's choice and not the opinions of the members of the group.
In other, more simplified sources, there can be found such steps as:
Step 1: Identify the decision
You realize that you need to make a decision. Try to clearly define the nature of the decision
you must make. This first step is very important.
Step 2: Gather relevant information
Collect some relevant information before making your decision: what information is needed,
the best sources of information, and how to get it. This step involves both internal and
external "work." Some information is internal: you will seek it through a process of self –
assessment. Other information is external: you will find it online, in books, from other
people, and from other sources.
Step 3: Identify the alternatives
As you collect information, you will probably identify several possible paths of action,
or alternatives . You can also use your imagination and additional information to construct
new alternatives. In this step, you will list all possible and desirable alternatives.
Step 4: Weigh the evidence
Draw on your information and emotions to imagine what it would be like if you performed
each of the alternatives to the end. Assess whether the need identified in Step 1 would be met
or resol ved through the use of each alternative. As you go through this difficult internal
process, you will begin to favor certain alternatives: those that seem to have a higher
potential for reaching your goal. Finally, place the alternatives in a priority order , based on
your own value system.
18
Step 5: Choose among alternatives
Once you have weighed all the evidence, you are ready to select the alternative that seems to
be best one for you. You may even choose a combination of alternatives. Your choice in Step
5 may very likely be the same or similar to the alternative you placed at the top of your list at
the end of Step 4.
Step 6: Take action
You're now ready to take some positive action by beginning to implement the alternative you
chose in Step 5.
Step 7: Review your decision & its consequences
In this final step, consider the results of your decision and evaluate whether or not it has
resolved the need you identified in Step 1. If the decision has not met the identified need,
you may want to repeat cer tain steps of the process to make a new decision. For example,
you might want to gather more detailed or somewhat different information or explore
additional alternatives.
1.4 Designing and rationalization of the decision making system
Design of the decisional system
The methodology for redesigning of the system of decision making.
Integrated in the methodology of reshaping the of company , redesigning of the system
of decision making needs to go through many stages and phases such as follows :
Stage I – The Collection and recording of information regarding the initiation and
functioning of the decision making system.
a) Brief characterization of deciders: individual and the group
– name ;
– the hierarchical level on which they are located ;
– compart ment ;
– hierarchical weight ;
Tasks , responsibilities and skills which they return ,as rulement of organization and operation an
d the descriptions of the post.
b) List
of decisions taken within a certain time frame ( usually one or May many years ) taken from reco
rds of process reports of the management participatory bodies or the decisions written
by the managers ofa higher level .
c) typoplogical fitting of the decisions , according to the model :
19
Nr Adopted
decision Criteria classification Observations
C1 C2 C3 C4 C5 C6 C7
0 1 2 3 4 5 6 7 8 9
Legend:
C1 – Nature of variables implied C5 – Amploarea decidentului
C2 – Implications and limits C6 – Amploarea componentelor decidentului
C3 – esalonul managerial C7 – Possibility of anticipation
C4 – Frequency of adoption
figure 1.4 T ypoplogical fitting of the decisions
d) Determining the appartenence of the decisions adopted according to the management
functions
Nr. Adopted
decision Functions of management observations
Pv O Co T C-E PM
0 1 2 3 4 5 6 7 8
Legend:
Pv – Prevision T – training
O – organization CE – Control -Evaluation
Co – Coordination PN – Management process as a whole
figure 1.5 A ppartenence of the decisions adopted according to the management functions
e) Determining the appartenence of the decisions adopted according to the company functions.
20
Nr. Adopted
decision Enterprise functions observations
R&D P HR F-A C F
0 1 2 3 4 5 6 7 8
Legend:
R&D – researdch and development F -A – financial -accounting
P – production C- Commercial
HR – humar resource F- firm as a whole
Figure 1.6 A ppartenence of the decisions adopted acc ording to the company functions
f) Highlighting the qualitative parameters of the decisions.
Nr. Adopted
decision Rationalization requirements Observations
Scientific
basement Authority Integration
in the
decision set Oportunity Completeness
0 1 2 3 4 5 6 7
Figure 1.7 Q ualitative parameters of the decisions
g) The decisional instrument used
h) Presentation of strategic decision -making tactical processes
For strategic and tactical decisions, the decision making mechanisms used and the
manner of retrieving the specific steps will be present.
i) Other aspects of the decision -making system.
Stage II – Analysis of the decision -making system
a) Analysis of the typology of the adopted decisions
21
The inf ormation provided by table no. 1.4 , allow for the determination of specific indicators a nd
indices, ie the average decision intensity and the weight of a certain type of decisions in the total
decisions taken.
b) Analysis of decision making by management functions
Table no. 1.5 , makes available to the specialists who redesign the decisional system the
information necessary to determine the contribution of the decisions taken to the exercise of
managerial functions. Also here will be the balances or imbalances in the advent of the
management processes by the investigated decision -makers.
c) An alysis of decision -making on business functions
The information in table no. 1.6 will be treated as in Table no. 1.5 .
d) Analysis of the quality of decisions
The way of retrieving or observing the main qualitative parameters of the decisions adopted on
the basis of table no. 1.6 is another important "area" of the decision -making system analysis and,
implicitly, a significant source of future improvement.
e) Analysis of the decisional instrument
In order to analyze the decision -making tool, the corresponden ce between the nature of the
decisions adopted and the decision -making methods to which the decision was made depends on
the decision -maker's hierarchical position. Analysis of the decision -making instrument will
correlate with the previous paragraph, in p articular with the requirement for scientific
substantiation of decisions.
f) Analysis of strategic tactical decision -making processes
Here is the methodological scenario of substantiation, adoption and application of strategic and
tactical decisions, mann ers of conception and dissimulation of each stage.
g) Positive and negative symptoms of the design and functioning of the decision -making system
The elements of analysis highlighted by the previous phases allow the outlining of positive and
negative symptoms, on the basis of which decisional solutions will be designed, according to the
following model:
Figure 1.8 Symtomes highlighting
Stage III – Re-designing the organization's decision -making system
22
a) Establishing the main ways to improve the decision -making system.
This category includes:
• typological improvement of adopted decisions and their correlation with the hierarchical
position of the decision -maker;
• Balanced approach to management processes;
• balanced decision -making of the compan y's procedural components;
• improving the quality of the decisions taken;
• Carrying out strategically -tactical decision -making processes following judiciously
structured and rigorously observed scenarios;
• enriching and modernizing the decision -making tool used;
• preparing and improving the decision -making and management of decision makers.
b) Deciding decisions at the level of each decision -maker.
Stage IV – Implementation of the new decision -making system
a) Implementation program through which decis ion-making redesign takes place through the
drawing up of the decision card for each manager.
b) Determining the effectiveness of decision -making solutions
It determines the effects generated by the operationalization of the ways to improve the decision –
making system, the efforts required by it and the direct and indirect efficiency resulting from the
comparison of effects and efforts.
Rationalization of the decisional system
Rationality requirements on the decision
As a result of the investigations carried out, there were outlined several
requirements that the decision must meet in order to efficiently fulfill the multiple functions
of the contemporary firm. These requirements are:
1. The decision must be scientifically substantiated. In order to achieve this major goal it
is necessary for the managerial staff to possess both the necessary knowledge, methods,
techniques and decision -making skills, as well as the understanding of the mechanisms
specific to the market economy.
23
2. The deci sion must be "empowered". This requirement must be understood in a double
sense. Each decision is required to be adopted by the managerial body in whose tasks the
service is expressly registered.
3. Each decision must be integrated, harmonized in all decis ions adopted or designed
taking into account the company's strategy and policies. Integration of decisions is required
to be done both vertically and horizontally, guaranteeing the realization of the principle of
decision -making and action. Vertical integr ation refers to the correlation of decisions made
by each manager with decisions taken at higher hierarchical levels. Horizontal integration
refers to the correlation with decisions related to the other activities involved with
interdependence relationship s.
4. The decision must fall within the optimal design and implementation period. In order
to be able to achieve a maximum economic effect, each decision must be conceived and
applied over a certain period of time. In order to ensure that the design and im plementation
of decisions, especially strategic and tactical, are enrolled, a predictive approach from the
management of the firm is required in the optimum period.
5. The proper formulation of the decision is an essential condition for effective
enforceme nt. The decision must be formulated in a clear, concise manner and contain the
objective and main operational parameters, ie it must indicate the objective pursued, the
mode of action envisaged, the resources allocated, the decision -maker and the period or
period of application.
Methods and techniques of decision making
The adoption of more complex and complex decision -making is possible through the use
of a wide range of decision -making methods and techniques that facilitate the choice of the
optimal variant, each of which is embedded in a particular decision -making model. Depending
on the volume, structure and quality of the information they benefit from, the decision models
can be:
– deterministic (centered on information with high precision);
– non-deterministic;
– probable.
24
The use of these methods and decision -making techniques leads to an increase in the
degree of rigor and implicit effectiveness of the adopted decisions, differentiated according to
the typology of the decisional situations involved.
Decision -making methods and techniques can be grouped, depending on the type of
decision -making situation involved, into three categories:
– methods and techniques for optimizing decisions in certainty: ELECT RE, global utility
method, additive method, Deutch -Martin algorithm, decision table, decision simulation;
– Methods and techniques for optimizing decisions in uncertainty: optimistic technique,
pessimistic technique (A.Wald), technique of optimality (C.Hur wicz), proportionality technique
(Bayes -Laplace), technique of minimizing regrets (L.Savage);
– methods and techniques for optimizing risk decisions: the decision tree, t he method of
mathematical hope.
Decisional table
The decision table represents an evolved form of block schemes used by computer
scientists. The table can be used both in terms of automatic processing of information and in the
case of me chanical and manual processing.
As its name indicates, it has the form of a structured table (table 1 .9) in four quadrants:
I
Objectives or decisional requirements
_ _ _
III
Combination of objectives or decisional
requirements
_ _ _
II
Possible actions or operations
_ _ _
IV
Combinations of possible actions or
operations
_ _ _
Figure: 1.9 Decsisional table
25
• the top left quadrant includes the goals or requirements that need to be considered when
making the decision;
• the bottom left dial is intended to insert the set of actions or operations involved in achieving
the objectives set;
• the top right quadrant includes all combinations of objectives or decisional requirements;
• the bottom right quadrant inserts all the actions or operations required to achieve each
combination of objectives or queries from the previous q uadrant, in fact the possible decisional
alternatives, these being structured vertically.
This method is used for decisions with multiple objectives or conditions, with repetitive
character. Such decisions are frequently encountered in the prod uction activities of industrial
firms.
The main advantages of using this method are to increase the efficiency and effectiveness
of decisions, along with the economics of effort on the part of the managers involved, due to the
predetermination of the decisional alternatives.
As a limit, we can mention the large amount of work necessary to elaborate the table and
the need, relatively frequent, of its updating, depending on the changes that take place in the
decisional situation.
Under market economy conditions, the decision -making table gains increased utility, as it
implies great decision -making flexibility, consistent with market developments.
Decision simulation
Decision -making simulation has been widely used in competitive firms in developed
countries, being typologically framed in the category of specialized decision -making methods.
Decisional simulation consists in creating a decision model based on identifying and
establishing the logical relat ionships between the variables that define a typical decisional
situation with a certain periodicity, with which it is projected that there are many decisional
variants for which the effects are determined in order to facilitate the selection of the one th at
corresponds to the greatest extent certain predefined managerial criteria.
26
From the analysis of the definition of the decision simulation usable in the management
of the companies, its main features are distinguished:
– is used only for typical decision -making situations that occur with a certain repeatability;
– is based on building a model from the involved decision variations that reproduces the
decisional decision making mechanism;
– using the model, based on start -up information, sev eral decisional variants for determining the
decisional characteristics and the effects it generates at the company level;
– among the proposed decision alternatives or alternatives, the one that best matches a set of
predetermined decision criteria is cho sen.
Making a decision simulation is a laborious process that requires several steps:
a) the delimitation of the typical decisional situation for which it is considered necessary to use
the decisional simulation;
b) identifying and evaluating t he involved variables and establishing the functional relationships
between them;
c) establishing the decisional model that reflects the decisional mechanism related to the
respective management situation;
d) elaboration of the programs at the computer wit h which the respective model is implemented;
e) testing models and programs followed by their finalization;
f) elaboration of the documentation necessary for the current use of the decision simulation;
g) decision -making simulation in order to make decisio ns by managers, according to the
company's needs.
The decision simulation is based on the updated information on the parameters of the
variants embedded in the models.
From the point of view of the scope, the simulations of the comp any are divided into
general and partial.
27
The general simulation refers to all the activities of the enterprise, being designed to allow the
substantiation of strategic decisions for the entire unit. Such simulations are particularly
complex, i nvolving thousands of variables.
Partial simulation refers only to some activities or sub -activities in enterprises. On their
basis, very effective decisions can be made, especially in the field of production.
The main advantage of using simulation in decision -making is to ensure high -efficiency
decisions, in the context of lower workload on the part of managers, which prevents the non –
economic use of resources, while speeding up their training and improvement process.
The main limitation of the use of decisional simulation lies in the laborious and
pretentious process of making the decisional simulation. To this is added the need for quasi –
permanent updating of the models and variables involved to reflect the frequent cha nges that
take place in the decision -making situations considered in the company.
Chapter 2 . DIAGNOSIS OF SOCIO -ECONOMIC ACHIEVEMENTS OF THE
ENTERPRISE
2.1. General characteristics of the enterprise
Moldcell is a mobile network operator in the Republic of Moldova, part of the international
TeliaSonera group, headquartered in Stockholm, Sweden. Moldcell launched its business activity
in 2000. At present, it has over 1 million subscribers and is among the telecommunications
services providers that increased its turnover from 25,41% (Q4, 2012) to 30,39% in late 2014.
On April 28, 2000, Moldcell opened its first sales office in Chisinau, at the address: 55, Tighina
Street. The same year, the mobile operator launched for the first time in Moldova the SMS
service and the first prepaid package. The first logo was representing a friendly deer and the first
slogan, which subsequently became famous, was „Waiting for us? Here we are!”.
On its fifth anniversary, Moldcell launches the twenty four/seven Call Center servic e (dialing
444 from mobile phone and 022 444 444 from fixed phones). In 2005, Moldcell introduced in
premiere the EDGE technology. The first rate plan for people with hearing impairments was
launched by Moldcell in 2006. Alocard Alternativ was based on tex t and internet services and
had a specialized Call Center Service. In 2007, Moldcell became the first mobile telephony
operator to accept electronic payments. In less than a year, the percentage of electronic payments
reached 17% and in 2014 – this figure grew to 63%. In 2008, Moldcell commercially launched
the 3G services and also this year, it made the first video call from its network.
28
In 2009, the TeliaSonera group became the first operator at global level to commercially launch
the 4G services. In 2012 , Moldcell became the first 4G operator in Moldova. Also this year, the
company launched, for the first time in Moldova the mSănătate (mHealth) services for several
categories of beneficiaries, including pregnant women and young mothers. In 2012, Republic of
Moldova became the eighth country in the world to introduce the mobile signature. Moldcell had
a strategic contribution in this project, sharing with the local implementers the relevant
experience of the Baltic companies from the TeliaSonera group.
The communication platform „Născut în Moldova” (Born in Moldova) was launched by
Moldcell in 2013, together with the introduction of the number portability service at national
level. Also in 2013, Moldcell offered, for the first time on the local market, an op tion with
unlimited national calls.
In 2015 Moldcell received the title of “Remarka ble employer”.
Products and services
Cartela Moldcell – prepaid tariff plans, where the subscriber does not have the obligation to sign
contracts or to pay monthly fees. bum – it’s a community where subscribers benefit from
unlimited calls within the #bum community, free access to social networks, national minutes,
SMS and included Internet traffic.
Abonament Moldcell –offers unlimited on -net calls, national minutes that can be used for
international calls and Roaming and Internet. According to National Regulatory Agency for
Electronic Communications and Information Technology (ANRCETI), Moldcell is leader on the
Abonament (subscription) segment in Moldova. At national level, the average market share of
Abonament and Postpaid is 22.7%, Moldcell market share in this sector stands at 33.26%.
Internet ca lumea – Moldcell offers mobile internet packages, as well as internet via routers and
modems, in the 3G and LTE (4G) standards.
Moldcell Business – communication solutions and support for corporate clients. Moldcell
provides a wide range of services (Info line, Telemarketing, Telesales, bulk SMS, Transport
Managem ent) etc. supporting and developing local and international business.
The placement of Moldcell SA main office is at the Belgrad 3 street, Botanica, Chisinau. It
represents a high secured building with 3 floors. Inside the building can be spoted a various
amount of collours, walls being colored in violet, green, pink and blue. At almost any floor of the
building can be seen small, motivating phrases, which indicate the vision and the way Moldcell
is doing it`s activity. As an example can serve “Our mission is doing things right” or “go left if
nothing goes right”, representing the accent put on quality of work and on individual and
innovative approach to problems.
29
2.2. Analysis of the financial and economic activities of the enterprise
Indicators: Time, lei Growth rate, %
2012 2013 2014 2013/2012 2014/2013
Total assets 1 955 951 830 2 449 228 003 2 360 034 181 25,21 -0,03
Revenues from sales 982 356 704 955 522 813 1 035 784 574 -2,73 0,08
Gross profit 541605082 499135167 442 635 501 -7,84 -0,11
Table 2.1 : Analysis of the magnitude and dynamics of the property of the enterprise «»for
2014 -2016 years., lei
Source: Financial statements of the enterprise «M oldcell» SA for 2012 -2014years.
Conclusion: The analysis of the data from table shows that in the period of 2012 -2013
there was spoted a great increase of the total assets of the enterprise, meaning it`s growth on the
market and groth of the quantity of production to be sold. Also it is caused by emission of the
shares launched in the analyzed peri od. In the next year, the value of total assets was kept
without great changes in it. In comparison to 2012, in 2013 the revenues from sales and the gross
profit parameter has shown a decreasing tendency, the revenues decreasing non -essencially, by
2.73% a nd the gross profit by 7.84% – a pretty big ammount for the sumes registred. In 2014,
comparing to 2013, the revenues from sales have non -essencially increased (by 0.08%) and the
gross profit decreased by 0.11%. The increase of the ammount of the total ass ets should have led
to increase in profit , but it didn`t. It is advised to revise the structure of assets in order to
rationalise the use of assets.
Table: 2.2.1 Analysis of technical and economic potential
Consider the structure of the enterprise's property using vertical analysis.
№ Indicato
rs: 2012 y. Share, % 2013 y. Share, % 2014 y. share, %
1. Long
term
assets 172695014
0 88,29 17335766
04 70,78 20692743
26 87,67
1.1 Long
term
intagible
assets 401969565 20,55 41666817
1 17,01 85992025
3 36,43
1.2 Long
term
material
assets 132347985
5 67,66 13154077
13 53,70 12093540
73 51,24
30
Table.2.2 : Structural analysis of the enterprise«Moldcell» SA for 2012 -2014, lei
Source: Financial statements of the enterprise «M oldcell» SA for 2012 -2014years.
Conclusion: The analysis of the data from table shows that the biggest part in the
structure of assets of “Moldcell” SA is represented by the long term assets ( 87,67 %), considered
the most risky part of assets. The biggest part of the l ong term assets is represented by the fixed
assets, having a share of 76,59 % of the total ammount of actives, being followed by long term
material assets, with a share of 51,24 % of the total ammount. From the part of current assets, the
biggest part is tak en by the short term trade receivables (7.36% of total assets), being followed
by cash (3.24%), considered the less risky assets that any enterprise can have. During a 3 years
period, the positions taken by the mentioned categories of assets haven`t change d regardless of
manipulations with the total ammounts of assets. Asset groups Absolute indicators, lei Structure,
Share,%
Recommended
structure
2012. 2013 2014 2013\
2012 2014\
2013 2012
г. 2013
г. 20
14 2013
\
2012 2014\
2013 1.2
.1 – fixed
assets 169454120
2 0,86 18309347
49 0,74 18077859
28 76,59
1.3 Long
term
financial
assets 1500720 0,07 1500720 0,06 0 0
2 Current
assets 229001690 11,70 71565139
9 29,21 29075985
5 12,32
2.1 Stock 12344615 0,63 8989856 0,36 15107793 0,64
2.2 Short
term
trade
recievabl
es 121148006 6,19 16588769
0 6,77 17372670
3 7,36
2.3 Short
term
investme
nt 0 0 0 0 0
2.4 cash 75374750 3,85 51270772
2 20,93 76481414 3,24
2.5 Other
current
assets 20134319 1,02 28066131 1,14 25443945 1,07
Total
assets 195595183
0 24492280
03 23600341
81
31
А1
753747
50 512707
722 764814
14 43733
2972 –
43622
6308 3,85 20,9
3 3,2
4 17,0
7 –
17,69 10-
20
% А2 121148
006 165887
690 173726
703 44739
684 78390
13 6,19 6,77 7,3
6 0,57 0,58
А3
324789
34 370559
87 405517
38 45770
53 34957
51 1,66 1,51 1,7
1 –
0,14 0,20 30-
40
%
А4
172695
0140 173357
6604 206927
4326 66264
64 33569
7722 88,2
9 70,7
8 87,
67 –
17,5
1 16,89 <50
%
Tot
al 195595
1830 244922
8003 236003
4181 49327
6173 –
89193
822 100 100 10
0
Table2.3 : Assessment of the risk of the structure of assets by the degree of their liquidity by
the balance of the enterprise «Moldcell» SA for 2012 -2014.
Source: Financial statements of the enterprise «Moldcell» SA SRL for 2012 -2014years.
Conclusion: The total share of assets A1 and A2, represented by cash and short term
trade receivables, the most liquid and as result the less risky part of assets in 2014 is fitting the
recommended structure (10.6%), being situated at the bottom limit. This parameter has decreased
from 28.29% to the current 10.6%, meaning the efforts that were made in order to stabilise the
struc ture of this type of assets.
The group of assets A3, represented by stocks, materials, trading products and other types of
stocks, considered as medium risk assets, is not meeting the recommended structure representing
1.71% in 2014; 1.51% in 2013 and 1.66 % in 2012 in comparison to recommended 30 -40%. It
means that the firm may not be capable to repay the long term liabilities with maturity of 1 year
and above.
The group of assets A4 is represented by the intangible assets, long term assets, long term
inves tments and long term trade receivables. This group includes the most risky assets of the
enterprise because of the duration of the period of recovering the financial means. It is
recommended for the share of this group to be under 50% of the total assets. In 2014 it valued to
87.67%; 70.78% in 2013 and 88,29 % in 2012. This group of assets should be covered mainly by
the owner`s equity. It is adviced to decrease this parameter by restructurization of the assets.
Indicators Way to 2012 y. 2013y. 2014y. Absolute
32
calculate deviation
2013\
2012 2014\
2013
Coefficient of immobilization LA/TA 0,88 0,70 0,876 -0,17 0,16
The share of current assets CA/TA 0,11 0,29 0,12 0,17 -0,16
The ratio between current assets and
long term assets CA/LA 0,13 0,41 0,14 0,28 -0,27
Share of property for production
purpose (FA+S)/TA 0,87 0,75 0,76 -0,12 0,01
Coefficient of tehnical composition FA/CA 7,39 2,55 6,21 -4,84 3,65
Tehnical potential FA/TA 0,86 0,74 0,76 -0,11 0,01
Table2.4 : Analysis of the structure of the assets of the enterprise «Moldcell» SA for 2012 -2014
years using the coefficient method, the coefficient.
Source: Financial statements of the enterprise «Moldcell» SA for 2012 -2014years.
Notes: LA –Long term assets; TA –total assets;FA – fixed assets; S –stocks; CA –current
assets.
Conclusion: The data from table shows that during the analyzed period the coefficient of
immobilization in 2014 has returned to the parameter spoted in 2012, varying fr om 0.88 in 2012
to 0.70 in 2013 an back, now representing a value of 0.876.
The share of current assets has grown from 11% to 29% in 2013 (by 17%) and back to 0.14% in
2014. It means that the assets that can be transfomed quickly into cash are in defficit. It may
damage the firm`s cash flow in the future.
The ratio between current assets and long term assets has grown by 28% in 2013,
representing a value of 41% and has decreased back to 14% in 2014. In a telecommunication
company it`s a specific e considere d as normal.
The share of property for production purpose has decreased from 0.87 by 0.12 in 2013 and
kept of the same level in the next year . The biggest part of assets is the one that make possible
the whole activity of the enterprise, making possible th e connection between the abonates. It is
also specific for this type of activity and is on a good value.
The coefficient of technical composition has decreased by 4.84 in 2013, representing a value of
2,55. In 2014 this parameter has increased by 3,65 and kept at the value of 6,21.
The technical potencial in 2013 has represented a value of 0.74, by 0.11 less than in 2012. In
2014 this parameter has insignifficantly changed, increasing b y 0.01.
Indicators 2012 y. 2013 y. 2014 y. Absolute deviation Growth
33
rate, %
2013\
2012 2014\
2013 2013
\
2012 2014
\
2013
Long term
liabilities 0 0 116333240
0 0 116333240
0 0 1
Short term
liabilities 98411162 149377837
3 114577570 139536721
1 –
137920080
3 14,1
7 –
12,0
3
Total assets 19559518
30 244922800
3 236003418
1 493276173 -89193822 25 03
Net assets
(r.3-r.2-
r.1) 18575406
68 955449630 108212421
1 –
902091038 126674581 –
48.5
6 11
Table 2.5 : Calculation of the net assets of the enterprise «Moldcell» SA for 2012 -2014, lei
Source: Financial statements of the enterprise «Moldcell» SA for 2014 -2016years.
Conclusion: Regardless of the increased value of total assets in 2013, the value of net
assets has decreased by 48.56%in 2013. Later it has increased by 11% in 2014. The enterprise
“Moldcell” SA has little influence of the debts on it`s own assets
№ Indicators 2012 y. 2013 y. 2014 y.
1. I variant
1.1. Current assets 229001690 715651399 290759855
1.2. Short term liabilities
984111162 1493778373 1145
77570
1.3. Net current assets (r. 1.1 – r. 1.2) -755109472 -778126974 176182285
2. II variant
2.1. Owner's equity 971840668 955449630 1082124211
2.2. Long term liabilities 0 0 1163322400
2.3. Constant capital (r. 2.1.+ r. 2.2.) 971840668 955449630 2245446611
2.4. Long term assets 1726950140 1733576604 2069274326
2.5. Net current assets (r. 2.3 – r. 2.4) -755109472 -778126974 176172285
Table 2.6 : Calculation of the actual value of net current assets of «Moldcell» SA for 201 2-2014,
lei.
34
Source: Financial statements of the enterprise «Moldcell» SA for 2012 -2014years.
Conclusion: the data from table shows that the actual value of net current assets is
negative in 2012 and 2013, ammounting to -755109472 lei and -778126974 lei
correspondingley. It m eant that the the current assets of the Moldcell SA is highly dependent on
the short term liabilities that it has. It is considered a risky situation. In 2014, this value has
changed to 176172285 , due to increase in the ammount of long -ter liabilities and current assets.
It means that the current assets are supported by longer term debts and a part of them has ben
repayed, becoming trully proper to the enterprise. This is agood parameter and represents the
effort made to stabilize the value of net current a ssets.
Indicators: 2012 y. Share
, % 2013 y. share
, % 2014
y. share
,%
1.Owners's equity: 971840
668 49,68 955449
630 39,01 10821
24311 45,85
1.1. Statutory and additional capital 176403
236 9,018 176403
236 7,20 57000
3236 24,15
1.2. Reserves 682707
450 34,90 781484
198 31,90 78148
4198 33,11
1.3. retained earnings (deficit) of prior years 202733
55 1,03 139532
34 0,56 –
24378
03 -0,10
1.4. net profit (loss) of the reporting year 987767
48 5,05 –
886714
8 -0,36 –
26224
6945 –
11,11
1.5. other element of owners’ equity 0 0 0 0 0 0
2. Long term liabilities, including 0 0 0 0 11633
32400 49,29
2.1. Long term financial libilities 0 0 0 0 11633
32400 49,29
2.2. Long term loans 0 0 0 0 0 0
3.Short term liabilities, including.: 984111
162 50,31 149377
8373 60,98 11457
7570 4,85
3.1. Short term financial liabilities 920019
944 47,03 988432
189 40,35 11492
779 0,48
35
3.2. short term trade kiabilities 567537
05 2,90 534907
65 2,18 84609
514 3,58
3.3. short term accrued liabilities 733751
3 0,37 451855
419 18,44 18475
277 0,78
Total liabilities 195595
1830 100 244922
8003 100 23600
34181 100
Table.2.7 : Structural analysis of liabilities of the enterprise «Moldcell» SA for 2012 -2014, lei
Source: Financial statements of the enterprise «Moldcell» SA for 2012 -2014 years.
Conclusion: The analysis of the data from table shows that in 2012, the structure of the
liabilities was composed only of short term liabilities and owner`s equity, ammountig to
approximately 50%/50%. In 2013 the share of the short -term liabilities has increased by 10%,
becoming the biggest part of the total liabilities of Moldcell SA, ammounting to 60.98%, while
the owner`s equity represented a number of 39.01%.
In 2014 there have appeared long -term liabilities, in ammount of 1 163 332 400 lei.
In the new structure of liabilities of Moldcell SA, the biggest quota have long term liabilities,
valuing to 49.20%, being followed by the owner`s equity with share of 45.85%.
Groups
liabilities Absolute indicators, lei Structure,
Share,%
Recommended
structure
2012 2013 2014. 201
2 201
3 201
4 2013\20
12 2014\20
13
P1 5675370
5 5349076
5 8460951
4 2,9
0 2,1
8 3,5
8 -0,71 1,40 <30%
P2 9273574
57 1440287
608 2996805
6 47,
41 58,
80 1,2
6 11,39 -57,53
P3
0 0 1163332
400 0 0 49,
29 0 49,29 >70
%
P4 9718406
68 9554496
30 1082124
211 49,
68 39,
01 45,
85 -10,67 6,84 >60
%
Total. 1955951
830 2449228
003 2360034
181 100 100 100
Table 2.8 : Risk assessment of the structure of liabilities for the urgency of their payment to the
enterprise«Moldcell» SA for 2012 -2014 year
36
Source: Financial statements of the enterprise «» SRL for 2012 -2014years.
Conclusion: The group P1 and P2 represent the short term creditory debts that are not
exceeding the maurity of 12 mounths. In 2014, the total ammount of their shares represented
4.84%, hitt ing the recommended structure of less than 30%.
The groups P3 and P4 represent the long -term debts and the owner`s equity. Their total ammount
in 2014 valued to 95.14%, also hitting the recommended structure.
On it`s own, the group P4 represnts the capital without term of reimbursement, existing in form
of owner`s equity. It`s share in Moldcell SA in 2014 is 45.85% and it is not fitting the
recommended structure of more than 60%. It means that the firm may have problems with
financing the A4 group of assets , the most risky part of assets.
Indicators Way to calculate 2012y. 2013y. 2014y. Absolute
deviation
2013\
2012 2014\
2013
Equity ratio Кe = owners equity/total
liabilities 0,50 0,39 0,46 -0,11 0,06
Total debt ratio Кb = (long term+short term
liabilities)/total liabilities 0,50 0,61 0,54 0,11 -0,06
Total solvency
ratio Кs= total liabilities/(long
term+short term liabilities) 1,99 1,64 1,85 -0,36 0,21
The
capitalization
ratio Кp= (long term+short term
liabilities)/ owners equity 1,01 1,56 1,18 0,55 -0,38
Financial
leverage, % Кc= total liabilities/owners
equity*100% 201,26 256,34 218,09 55,08 -38,25
Table 2.9 : Assessment of the liabilities structure of the enterprise «» SRL using the coefficient
method for 2012 -2014, coefficient.
Source: Financial statements of the enterprise «Moldcell» SA for 2012 -2014 years.
Conclusion: The Equity Ratio measures the proportion of the total assets that are
financed by stockholders, as opposed to creditors . During the analyzed period it is seen that the
value of this parameter has changed in a positive dirrection, from 0.5 to 0.39 (0.11), meaning that
the the biggest part of assets is financed by the stockholders. So they are finacnced by the own
37
capital. In 2014 it has increased by 0.06, due to the long -term bank credit that was taken in that
year.
The total debt ratio measures the extent of a company’s leverage . The higher the debt ratio,
the more leveraged the company is, including a higher financial risk. Looking at the data from
table, we can see that in 2013 it has grown from 0.50 to 0.61, by 0.11, exposing the company to a
higher fiunancial risk. In 2014 there was made an effort that has slightly stabilized this
parameter.
The total solvency ratio is a key metric used to measure an enterprise ’s ability to meet its debt
and other obligations. The solvency ratio indicates whether a company’s cash flow is sufficient
to meet its short -term and long -term liabilities. The lower a company's solvency ratio, the greater
the probability that it will def ault on its debt obligations.
in the analyzed period, this parameter at high level, meaning that the firm can easily deal with
the debts. In 2013 it has decreased by 0.36 from a value of 1.99. In 2014 it has increased from a
value of 1.64 to 1.85, increasi ng back by 0.21.
Capitalization ratios are indicators that measure the proportion of debt in a company’s capital
structu re. While a high capitalization ratio can increase the return on equity because of the tax
shield of debt, a higher p roportion of debt increases the risk of bankruptcy for a company.
In 2013 it has increased from a value of 1.01 to 1.565 (by 0.55). in 2014 it has decreased back by
0.38, coming to a number of 1.18.
Financial leverage is the degree to which a company uses fixed -income securities such as debt
and preferred equity. The more debt financing a company uses, the higher its financial leverage.
A high degree of financial leverage means hig h interest payments, which negatively affect the
company's bottom -line earnings per share. In the analyzed period we can see that “Moldcell” SA
is keeping this parameter on high levels. In 2013, the value of financial leverage has increased by
55.08%, high ly increasing the risks of the company and the interest rates that will be faced. In
2014, there can be seen that was made an effort to stabilize the value of this parameter,
decreasing it by 38.25. still, this value is big and exposes the company to risks .
2.2.2 Analysis of the main results of fi nancial and economic activities
Indicators 2012 y. 2013 y. 2014 y. Absolute
deviation,lei Growth rate, %
2013\
2012 2014\
2013 2013\
2012 2014\
2013
Revenues 95552281 982356704 103578457 2683389 5342787 0,02 0,05
38
from sales 3 4 1 0
Other
opeartional
revenues 13230163 21668299 19396629 8438136 –
2271670 0,63 -0,10
Revenues
from others
activities 0 0 0 0 0 0 0
Total
revenues 96875297
6 100402500
3 105518120
3 3527202
7 5115620
0 0,03 0,05
Table 2.10 : Estimation of dynamics and structure of incomes of the enterprise «Moldcell» SA
for 201 2-2014, lei
Source: Financial statements of the enterprise «Moldcell » SA for 2012 -2014 years.
Conclusion: The analysis of the data from table shows that during the period of 2012 –
2014 there was an increase in the total revenues, ammounting to + 35272027 lei or 0.03% in 2013
in comparison to 2012 and by + 51156200 lei 0.05% in 2014 in comparison to 2013. It is mainly
due to the increases in the revenue from sales, which has grown by 0,02% in 2013 and by 0.05%
in 2014. It has compensated in 2014 the decrease in the other operational revenues (by 0.1%).
Indicators 2012 y. 2013 y. 2014y. Absolute deviation,lei Growth
rate, %
2013\
2012 2014\
2013 2013\
2012 2014\
2013
Revenues
from sales 955522813 982356704 1035784574 26833891 53427870 2,80 5,43
Cost of
sales 413917731 483221537 593149073 69303806 109927536 16,74 22,74
Gross
profit/
loss 541605082 499135167 442635501 –
42469915 -56499666 -7,84 –
11,31
Table 2.11 : Analysis of the dynamics and structure of the gross profit of the enterprise
«Moldcell» SA for 201 2-2014, lei.
Source: Financial statements of the enterprise «Moldcell» SA for 2012 -2014years.
Conclusion: The analysis of the data from table shows that during the analysed period,
the revenues from sales of Moldcell SA has a growing tenedency, growing from 955522813 lei,
39
registered in 2012 to 982356704 lei in 2013 (by 2.80%) and to 1035784574 lei in 2014 (by
5.43% comparing to 2013).
The cost of sales has also increased during the same period, from 413917731 lei by 16.74% in
2013 and by 22.74% in 2014, comparing to 2013. It`s growh is not proportional with the
revenues.
The gross profit analy sis shows that regardless of revenues` from sales growth, this parameter
cannot cover all the costs faced by Moldcell SA, resulting in a decrease in the gross profit during
the same period of analysis. The gross profit has decreased from 541605082 lei, reg istered in
2012 by 7.84%, representing a number of 499135167 lei in 2013 and a number of 442635501 lei
in 2014, which is 11.31% less than in 2013.
In the data analysed it is seen that there were made efforts in order to increase the profits of the
enterprise by increasing the ammount of goods and services sold, but the total cost for that was
too high and hurting the gross profit, resulting in a less efficient structure of revenues and costs
than it was in 2012.
Показат
ели 2012 y. share, % 2013
y. share, % 2014 y. share, % Absolute
deviation,lei
2013\
2012 2014
2013
1.Result
from
operation
al
activity: 109643
106 111,0009
271 64035
471 –
722,1653
569 –
184940
11 7,052135
917 –
456076
35 –
825294
82
2. Result
from
other
activities –
399394
3 –
4,043404
021 –
72945
239 822,6460
075 –
243713
072 92,93266
391 –
689512
96 –
170767
833
3. Profit
before
taxation 105148
405 106,4505
636 –
88671
48 100 –
262207
083 99,98479
982 –
114015
553 –
253339
935
4.
Income
tax 637165
7 6,450563
649 0 0 0 0 –
637165
7 0
40
expense
5. Net
profit
987767
48 –
88671
48 –
262246
945 –
107643
896 –
253379
797
Table 2.12 : Dynamics and structure of profit before taxation and net profit of the enterprise
«Moldcell» SA for 2012 -2014, lei
Source: Financial statements of the enterprise «» SRL for 2012 -2014years.
2.2.3 Analysis of the ef ficiency of economic activities
Indicators Way to calculate 2012
y. 2013
y. 2014
y. Absolute deviation
2013\2012 2014\2013
Gross margin of sales Rп =
GP/RS100% 56,68 50,80 42,73 -5,87 -8,07
Operational profitability
of sales Rп =
ROA/RS100% 11,47 6,51 -1,78 -4,95 -8,30
Profitability of sales
based on profit before
taxation(PBT) Rп =
PBT/RS100% 11,00 -0,90 -0,25 -11,90 0,64
Net profitability of sales Rп =
NP/RS100% 10,33 -0,90 -0,25 -11,24 0,64
Table 2.13 : Calculation and analysis of profitabi lity of sales of the enterprise «Moldcell» SA for
2012-2014,%
Source: Financial statements of the enterprise «Moldcell» SA for 2012 -2014.
Note: RS – revenues from sales ; GP –gross profit; ROA –result from operational
activity; PBT – profit before taxation; NP –net profit.
Conclusion: The gross margin represents the percent of total sales revenue that the
company retains after incurring the direct costs associated with producing the goods and services
it sells. The higher the percentage, the more the company retains on each dollar of sales, to
service its other costs and debt o bligations.
Analysis of the data from table show that the company retains approximately half of each dollar
it spends. It is a good value. In 2013 it has decreased, coming from a value of 56.68 to 50.80 ( –
5.87). in 2014 it has decraed even more, by 8.07, b ecoming 42.73%.
41
The profitability of sales is has become negative during the analyzed period. It had a
decreasing tendency in 2013, decreasing from 11.47% to 6.51%, showing a bad sign. In 2014 it
has decresed till -1.78 (by 8.30%), meaning that the company spends more than it actually
receives. So became also with the net profitability and the profitability before taxation.
Indicators 2012 y. 2013 y. 2014 y. Absolute deviation
2013\2012 2014\2013
The average value of
assets ( A)
((assets at the
beginning of the year
+ assets at the end of
the year) / 2) 1802691385 2202589917 2404631092 399898531,5 202041175,5
Average cost of
owners’ equity (OE)
((OE at the beginning
of the year + OE at
the end of the year) /
2) 931583345 963645149 1018786921 32061804 55141771,5
Investment
profitability, %
(NP/ А)*100, (ROI) 5,47 -0,40 -10,90 -5,88 -10,50
Economic
profitability, %
(PBT/ А)*100%,
(ROA) 5,83 -0,40 -10,90 -6,23 -10,50
Financial
profitability (ROE),
%,
(PBT/ OE)*100% 11,28 -0,92 -25,74 -12,20 -24,82
Table2.14 : Calculation and analysis of profitability of assets and capital of the enterprise
«Moldcell» SA for 2012 -2014.
Source: Financial statements of the enterprise «Moldcell» SA for 2012 -2014.
42
Notes: RS – revenues from sales; PBT –profit before taxation; NP –net profit; А-average
value of assets; OE – average cost of equity.
Conclusion: Analysis of the data from table shows that the return on investment has
manifested a decreasing tendency. During 3 years, this parameter has decreased from 5.83%, a
positive value by 16.38%, becoming negative ( -0.40 in 2013 and -10.90 in 2014). This means
that the financial investments in the company don`t bring profit and even don`t recuperate the
sums invested in t he financial acitvity of the firm.
The economic profitability is the same as investment profitability.
The financial profitability has drastically decreased durin the analyzed period. In 2012 it was on
a value of 11.28%, meaning that besides the redcuperat ion of the financial investments in the
company, there was a surplus of income in form of 11.28% from the investments. In 2013 this
value became negative. It has decreased by 12.20%, becoming -0.92%. in 2014, the value of this
coefficient has decreased eve n more , becoming -25.74%, meaning the losses as a result of
investment activity.
Indicators abbreviation 2013 2014 Absolute
deviation
1 2 3 4 5=4-3
1. Revenue from sales,lei Rs 982356704 1035784574 53427870
2. profit before taxation,lei Pbt -8867148 -262246945 -253379797
3. net profit, lei Pnet 8867148 -262246945 -271114093
4. average value of owners' equity,lei Vaoe 963645149 1018786921 55141771,5
5. average value of assets,lei Vaa 2202589917 2404631092 202041175,5
6. Coefficient of financial leverage
Kc, (r.5 : r.4) Kc 2,28 2,36 0,07
7. profitability of sales (r.2 : r.1
100), % Ps -0,90 -25,31 -24,42
8. asset turnover, coeff. (r.1 : r.5) Kast 0,45 0,43 -0,02
43
9. Profitability of assets , (r.2 :
r.5100), % ROA -0,40 -10,90 -10,50
10. net profit to profit before tax
(r.3 : r.2 100), % Npbt -100 100 -107
11 Profitability of equity
capital.,calculated on base of:
-net profit, (r.3 : r.4 100),%
– profit before taxation, (r.2 : r.4
100), % ROE 0,92 -25,74 -26,66
Table2.15 : The initial data for the factor analysis of the return on equity of the enterprise
«Moldcell» SA for 2012 -2014.
Source: Financial statements of the enterprise «Moldcell» SA for 2012 -2014
Conclusion: The analysis of the data from table shows that the coefficient of financial
leverage in 2014 is highly decreased comparing to the previous years, representing a velue of
0.07, by 2.29 less than in 2013 and by 2.21 less than in 2012, meaning that the firm is financing
the assets mainly from it`s own capital.
The profitability of sales has a negative value in all 3 years, meaning that the enterprise is not
earning enough to cover the assets value.
The net profit`s value is not speaking about good tendencies, mainly because of negative value is
net profit.
The profitability of equity capital has decreased. In 2012 it`s value was 0.92%, which means that
the firm has practically no profit out of the usage of equity capital. In 2013 and 2014 it has
negative values ( -25.74 and -26.66 correspondingly). It means that for any 1,26. lei spent, the
firm receives back only 1 lei.
2.2.4 Analysis of the financial condition of the enterprise
Indicators Way to
calculte Normat
ive
value 2012 y. 2013 y. 2014
y. Absolute
deviation
2013\2
012 2014\2
013
44
Equity
financial
ratio Кef=
OE/(OE+L
TL)
1 1 0,48 0 -0,52
Financial
risk ratio Кr=
LTL/OE*10
0% 0 0 107,5
0 0 107,50
Coefficient
of financing Кf=
OE/(LTL+S
TL) ;
opt –
1,5 0,98 0,63 0,84 -0,34 0,20
Coefficient
of financial
stability Кir=
(OE+LTL)/
TBC
Coefficient
of financial
maneuvera
bility Кfm= (OE –
LA)/OE ≥0,1 -0,77 -0,81 2,07 -0,03 2,88
Coefficient
of financing
current
assets Кfca= (CA –
STL)/CA -3,29 -1,09 0,60 2,21 1,69
Inventory
and cost
financing
ratio Кif= (CA –
STL)/S ≥0,65–
0,7 -61,16 -86,56 11,66 -25,38 98,21
Coefficient
of
manoeuvra
bility of
owners
equity Кfoe= (CA –
STL)/OE
-0,77 -0,81 0,08 -0,03 0,90
Table2.16 : Analysis of financial stability and independence of the enterprise«Moldcell» SA for
2012 -2014 years, the coefficient.
Source: Financial statements of the enterprise «Moldcell» SA for 2012 -2014.
45
Notes: OE – owners'equity; TBC –total balance currency; LTL –long term liabilities;
STL –short term liabilities; LA -long term assets; CA -current assets; S –stocks.
Conclusion: The analysis of the data from table shows that the equity financial ratio
during the analysed period has moved from the optimal parameter. In 2012 and 2013, this
coefficient was 1, at the maximal margin of the adviced value. In 2014 it has decreased by 52%,
valuin now 48%, which is below the optimal value. It means
The f inancial risk ratio in 2012 and 2013 is 0. This is due to the absence of long term liabilities
and practically that means that Moldcell SA had no financial risk in this period. In 2014 this
parameter has changed by 107.5%. it was caused by the acquired long term bank loan. T his value
is far below the optimal value of <30% and means the increased risk of being incapable to
reiburse the mentioned credit from it`s own capital, leding to a propbable selling of assets in
order to cover this loan.
The c oefficient of financing durin g the analysed period has varied, entering and exiting the
optimal value. It is seen that there were made fforts in order to optimize this parameter. In 2012
it`s value was 0.98, in the middle of the obptimal value bariers. In 2013 it has decreased by 0.34
and became 0.63, not hiting the optimal value of >0.7. in 2014 this parameter has increased by
0.20 and came back to the optimal structure.
The c oefficient of financial maneuverability in 2012 and 2013 was far below the optimal value
of >0.1, even representing a negative value, -0.77 in 2012 and -0.81 in 2013 correspondingly.
There was paid attention to this parameter and was made an effort to stabilize it, so in 2014, the
value of the c oefficient of financial maneuverability has increasee d by 2.88 and became 2.07,
perfectly hitting the optimum.
The Coefficient of financing current assets was also optimized by the management. Knowing
that the optimal value of this parameter, >0.5 it represented in 2012 and 2013 negative values, –
3.29 and -0.09 correspondingly. Still there can be seen and increasing tendency, and in 2014 the
value of Coefficient of financing current assets has gron to 0.6, hiting the necessary value.
The Inventory and cost financing ratio, whose optimal value is >0.65 -0.7 w as also optimised. In
2012 it`s value was -61.16. in 2013 it has decreased even more, being at a value of -86.56. In
2014, there was a great increase in this value, becoming 11.66.
The Coefficient of manoeuvrability of owners equity in the analyzed period represented negative
values, -0.77 in 2012 and -0.81 in 2013. In 2014 there is spoted a great increase in the value of
this parameter, a groth by 0.90 ahs led it to the value of 0.
0.08. it is still not hiting the optimal structure.
46
Ass
et
gro
ups years Gro
ups
of
liabil
ities years Аi-Pi
2012 2013 2014 2012 2013 2014 2012 2013 2014
А1 75374
750 51270
7722 76481
414 P1 56753
705 53490
765 84609
514 18621
045 45921
6957 –
81281
00
А2 12114
8006 16588
7690 17372
6703 P2 92735
7457 14402
87608 29968
056 –
80620
9451 –
12743
99918 14375
8647
А3 32478
934 37055
987 40551
738 P3 0 0 11633
32400 32478
934 37055
987 –
11227
80662
А4 17269
50140 17335
76604 20692
74326 P4 97184
0668 95544
9630 10821
24211 75510
9472 77812
6974 98715
0115
Tot
al 19559
51830 24492
28003 23600
34181 Total 19559
51830 24492
28003 23600
34181
Table2.17 : Assessment of the risk of loss of solvency of the enterprise«Moldcell» SA for 2012 –
2014, lei
Source: Financial statements of the enterprise «Moldcell» SA for 2012 -2014.
2012 2013 2014
А1 > P1 А1 < P1 А1 < P1
А2 > P2 А2 > P2 А2 < P2
А3 > P3 А3 > P3 А3 < P3
А4 > P4 А4 > P4 А4 > P4
Conclusion: The analysis of the firm`s solvency shows that in all 3 years, Moldcell SA is
working in the situation where P 4 is not covering A 4, a situation in which the activity is
considered under catastrophical risk. A situation in which the long term liabilities cannot be
covered by t he own capital – the most stable capital a firm can possess.in this situation, under the
47
preassure of creditors, the firm may have to sell it`s own assets in order to reimurse the loans
taken.
Indicators Way to calculate Normative
value 2012
y. 2013
y. 2014
y. Absolute
deviation
2013\
2012 2014\
2013
Absolute
liquidity L1=А 1/(P1+P2) 0,05-0,25 0,08 0,34 0,67 0,27 0,32
Acid test
ratio L2=(А 1+А 2)/(P 1+P2) 0.7-0.8 0,19 0,45 2,18 0,25 1,72
Current ratio
liquidity L3=(А 1+А 2+А 3)/(P 1+P2) 1-1,5(РМ) 0,23 0,47 2,53 0,24 2,05
General
solvency
index L4= А 1+0,5*А 2+0,3*А 3
P1+0,5*P 2+0,3*P 3 > 1 0,27 0,78 0,39 0,50 -0,39
Share of
current assets
in total assets L5=( А 1+А 2+А 3)/Total
assets ≥0,5 0,11 0,29 0,12 0,17 -0,16
Table2.18 : Calculation and assessment of liquidity and solvency indicators of the enterprise
«Moldcell» SA for 2012 -2014, the coefficient.
Source: Financial statements of the enterprise «Moldcell» SA for 2012 -2014.
Note: The normative values are presented in the table taking into account the peculiarities
of R.Moldova's economic reality.
Analysis of business activity (general indicators of asset turnover) of the enterprise
«Moldcell» SA for 2012 -2014.
№ Indicators Time Absolute
deviation
2012 y. 2013 y. 2014 y. 2
013\20
12 2
014\201
3
1 Revenues from sales, lei 9555228
13 9823567
04 103578
4574 268338
91 5342787
0
48
2 Average value of assets, lei 1802691
385 2202589
917 240463
1092 399898
531,5 2020411
75,5
3 The average value of long -term
assets, lei 1556058
488 1730263
372 190142
5465 174204
884 1711620
93
4 Average cost of current assets, lei 2466328
97 4723265
44,5 503205
627 225693
647,5 3087908
2,5
5 Security of revenues from sales by
assets (r.2/r.1) 1,88 2,24 2,32 0,35 0,08
6 Number of assets turnover (r.1/r.2)
0,53
0,44
0,43
-0,08 -0,02
7 Number of turnover of long -term
assets (r.1/r.3) 0,61 0,56 0,54 -0,05 -0,02
8 Number of turnover of current assets
(r.1/r.4) 3,87 2,07 2,05 -1,79 -0,02
9 Duration of assets turnover (360/r.6) 679,17 807,17 835,7 6 127,99 28,58
1
0 The length of turnover of long -term
assets (360/r.7) 586,2 6 634,08 660,86 47,82 26,78
1
1 Duration of turnover of current assets
(360/r.8) 92,92 173,09 174,89 80,17 1,80
Table 2.20
Source: Financial statements of the enterprise «Moldcell» SA for 2012 -2014 years.
Conclusion: The analysis of the data from talbe shows that the security of revenues from
sales by assets…
The number of assets turnover is decreasing and it is verry low. It represe nts that in average,
during 1 cycle only half of an asset recuperates it`s cost. The same is with the number of
turnover of long -term assets.
The number of turnover of current assets is also decreasing. In 2012, during one cycle, a
coefficient of 3.87 of a nd asset is recuperated. In 2013 this value has decreased by 1.79,
representing a number of 2.07. in 2014 this value decreased even more, by 0.02 which is a bad
sign , because the there is a lower outcome uf the usage of the enterprise` current assets.
The duration of assets turnover means the duration, in days, in which an assets can recuperate
it`s cost. In 2012 it took 679.17 days; in 2013 it took 80.7.17 days and in 2014 it has taken
835.76 day for the assets to recuperate their costs. It is a very long term and an increasing
49
tendency. It means that the cash flow of the enterprise may be hurt and it tend to become worse
in the future.
Analysis of the efficiency of the use of production factors of the enterprise «Moldcell» Sa
for 2012 -2014, lei.
Indic ators 2012
y. 2013
y. 2014
y. Absolute
deviation
2013\
2012 2014\
2013
Capital productivity
= income from sales / average annual value of
fixed assets 0,63 0,55 0,57 -0,07 0,01
Expenses for 1 lei of sales
= Total cost / sales revenue 0,43 0,49 0,57 0,05 0,08
Table 2.21
Source: Financial statements of the enterprise «Moldcell» SA for 2012 -2014 years.
Conclusion: The analysis of the data from table shows that the capital productivity of
Moldcell SA is kept pretty constant. During the analyzed period it varied from 0.63 in 2012 to
0.55 ( -0.07) in 2013 and to 0.57 (+0.01) in 2014.
The expenses for 1 lei of sale also kept at almost the same level. It has varied f rom 0.43 lei in
2012 to 0.49 lei in 2013 (+0.05lei) and to 0.57 (+0.08) in 2014. Still there can be seen an
increasing tendency. It means that al the last year from analysis the firm was receiving less than
a half (0.43%) of the money spent for it`s acitvi ty.
Comparative analysis of short -term receivables and payables of the enterprise
«Moldcell» SA for 2012 -2014, lei
Indicators 2012 y. 2013 y. 2014 y. Absolute deviation
2013\
2012 2014\
2013
Short -term trade receivable 121148006 165887690 173726703 44739684 7839013
Short -term accounts payable 0 0 0 0 0
The ratio of accounts payable to
receivables
Table2. 22
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Source: Financial statements of the enterprise «Moldcell» SA for 2012 -2014years.
Conclusion: The data from the table shows that during the analyzed period, Moldcell SA
has increasing short term trade receivables. It is considered a bad sign, beacause it means an
increasing the number of “ должники ”. So the money are registered, but not obtained. It may
hurt the firm`s solvency. Yet , it has no short term accounts payable, meaning that the firm is less
dependent financially on short -term payments.
The general conclusion of the paragraph: The overall economic analysis of the enterprise
“Moldcell” SA shows that the firm in the period of 2012 -2013 has increased it`s value of assets
in order to improve it`s future revenues. The point is that it had to face the increasing costs for
it`s overal l activity, which have damaged the firm`s gross and net profit, making it less in the
future periods than in 2012. Also, during all 3 years, there has been seen that the most stable
capital of the enterprise – the owner`s equity is incapable of sustaining the long term assets,
which later may lead the firm to selling of a part of these assets in order to deal with the loans.
This places the firm in a catastrophical zone of risk. Knowing that, the were made decisions in
order to stabilise the parameters that were damaging the firm. There were made actions, such as:
1. Decreassing the value of A 2, as it to fit the optimal value;
2. Increasing of the value of net current assets;
3. Increasing the profits of the enterprise by increasing the ammount of goods and servic es
sold;
4. The c oefficient of financial maneuverability has increaseed by 2.88 and became 2.07,
perfectly hitting the optimum;
5. Most of the negative values registered in 2012 and 2013 were compensated and returned
to normal values.
A big impact in the firm`s activity had the decision to take a long -term bank credit that made
it possible to to stabilize the up -mentioned parameters and provide some kind of stability to
the firm`s acitvity.
2.3. Decision -making system building wihithin middle management of “Mol dcell” SA
After the annual general meeting comes to an end and the future of the company is decided, there
is made a global target for the whole firm and the plan for each department.
The target is later communicated amongst all departments, which are free to decide on the
actions needed to achieve it. So the target is divided into smaller parts, tasks for each department.
These tasks are later to be detailed and transmited downward s, respecting the rules:
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Figure 2.3.1
So, the process of plan distribuit ion may be presented as a scheme figure 2.3.2:
Figure 2.3.2 : Process of plan distribuition between departments of “Moldcell” SA
Target
Department A
Department B
Department C
Department D
52
Different departments apply different methods to achieve the offered task, for example making
an advert, increase the market share, increase the area of coverage of mobile network. It means
different decisions are to be made.
There is a meeting that happens once in a mounth or 3 mounths, depen ding on how was decided
in the beginning of the year, where is analyzed the level of plan accomplishment . Depending on
the result, new actions are initiated or old ones are kept as basic and continued.
There are all types of decisions taken in the analyzed organization: strategical, tactical and
operational are distributed between the hierarchical levels. There are no defined stages included
in the process of decision making. The situation imposes the particularities of the process. Also,
on the lev el of middle management there are no specific techniques used.
In this chapter will be described the means to be prepared in order to make possible the usage of
techniques and a brief description of the decision -making techniques, according to different
situations.
In order to prepare the management for improving the process of decisio -making, it is adviced to
improve the communication inside the enterprise and ensure the informational support for the
decision -making. Later the techniques may be implemented and used.
2.3.1 Communication process
At Moldcell SA there are used all the types of communication. Very mch attention is given to the
informal communication. It creates a feeling of friendship and comfort in any of the groups.
First of all to mention is that the information flux of the enterprise can be mentioned right in the
organigram, as to be simplier to rationalize and observe the members and groups between which
the most of communication is realized.
For the written communication, Moldcell SA is us ing it`s own portal.
For more informal communication between members it is used “skype for business”. In this
portal people are greeting each -other, the newcomers, speak about the news that may me used,
giving advices on the performed tasks and other stuff .
Decisions may be made by a single leader, a committee or a large group of people, depending
on the nature of the organization. Each of these models is more or less appropriate depending on
53
the nature of the decision and the context in which it is be ing made. When communication is
thorough and accurate, decisions tend to be more informed and effective.
Acceptance
Communication is improved when everyone in the decision -making process feels that her
contribution is being respected. In a harsh or judgmen tal environment, some people will not
communicate their thoughts and feelings because they fear negative reactions or repercussions. A
group environment of acceptance leads to more comprehensive input from all stakeholders,
which in turn leads to better co mmunications and decisions that take all aspects of the situation
into account.
Authority
Some authoritarian organizations are characterized by one -way, top -down communication. This
form of communication leads to decisions that reflect the knowledge and pr iorities of the upper
echelons of the organizations. This isn't necessarily a problem in an organization where the
leaders' wishes are the only ones that matter, for example in the military. In other organizations
where members expect to be enfranchised, t his type of communication style can be problematic
and lead to tensions within the organization and delayed or faulty decision -making.
Cooperation
Cooperative communication involves an equal exchange of ideas between engaged parties in a
decision. While th is process can take longer than an authoritarian one and can be unwieldy, it
can also result in decisions acceptable to everyone involved because the decisions are made by
everyone equally. When opinions and inputs are solicited from an entire group on an equal basis,
the resulting decision can be a consensual synthesis of individual preferences. While each
individual may not get exactly what she wants, the resulting decision will be close enough to
each person's ideal to be acceptable to the group as a who le.
Secrecy
Secrecy is the opposite of communication. It involves the willful withholding of information
from other parties. Secrecy is necessary and even beneficial in some situations, but the people
holding the secrets should be aware of the impact of se crecy on decision -making. Individuals not
aware of some information can't be expected to make decisions based on that information.
Secrecy is most common in authoritarian institutions where all decisions are made by a small
54
group of leaders. In these situa tions, the input of followers isn't sought because they are not
stakeholders in the decision -making process.
The 4 Communication Styles in Business:
1. Passive communication
2. Passive -aggressive communication
3. Aggressive communication
4. Assertive communication
The manager can either be passive, passive -aggressive, aggressive, or assertive. Being assertive
is the proper way to effectively communicate in business, especially to the employees working
below. Unfortunately, assertive communication is the least common ap proach used in business
when the conversation gets difficult or uncomfortable.
The Challenges to Effective Decision Making
The degree of assertiveness a person uses in dealing with people provokes fairly predictable
reactions by others; which in turn, help s determine how effective the leader can be within the
organization. While the communication is likely situational, most tend to have a recurring
style in the way they communicate in difficult or stressful situations.
For the most effective decision makin g, there should be defined a proper communication
network. For “Moldcell” SA it is adviced Cluster Chain Network .
In the cluster chain network, there is an individual who, acts as a source of a message, transmits
information to the pre -selected group of individuals out of whom few individuals again tell the
same message to other selected group of individuals. Likewise, the chain continues, and the
message reaches to all in the network. This pattern is similar to the telephone tree, wherein one
person call s other two persons, then these two persons call other three persons and again these
three persons are expected to call other three persons. Likewise, the information gets transmitted
to all persons connected to the telephone network. This is the most comm on form of informal
communication network.
55
Figure 2.3.3 : Cluster chain network
2.3.2 Information needs
For a greater effectiveness, there may be esed a Decision Support System .
use predefined or ad hoc reports to support operations planning and problem -resolution
decisions.
With DSS, users find answers to specific questions as a means to evaluate the possible
impact of a decision before it is implemented. The answers to queries may take the form of a
data summary report, such as a product reven ue by quarter sales report. To conduct an
analysis, business owners and managers use an interface – a dashboard – to select a
particular graphic representation of a key performance indicator that measures the progress
toward meeting a specific goal.
Decisions are made at all levels of the firm. Some decisions are very common and routine but
exceptionally valuable.
56
IT provides new tools for managers to carryout decisions.
Receiving the most concrete, up -to-date information and redistributing it to those who
need to aware of it.
IT does not provide any information directly, but provides some capabilities to the user to
analyze the decision problem and generate some meaningful information for decision –
making
Refers to class of system which support s in the process of decision making and does not
always give a decision itself.
Decision Support Systems supply computerized support for the decision making process.
End-users actively work with the data warehouse. End -users apply models to represent,
understand, and simplify the decision situation.
CHARACTERISTICS AND CAPABILITIES OF DSS
Support decision makers at all managerial levels
Support several interdependent and/or sequential decisions
Support all phases of decision making and a variety of decision -making processes and
styles
Can be adapted over time to deal with changing conditions
Easy to construct
Utilizes models and links to data – and knowledge bases
Execute sensitivity analysis
COMPONENTS AND STRUCTURE OF DSS
Data M anagement – Includes the database(s) containing relevant data for the decision
situation
User Interface – Enables the users to communicate with and command the DSS
Model Management – Includes software with financial, statistical, management science,
or other quantitative models
Knowledge Management – Provides knowledge for solution of the problem; supports any
of the other subsystems or act as an independent component
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The need for information
Each of the different types of decision mode requires a different type of information, indicating
that the information processing capability of an organisation will directly influence the
effectiveness of the decision making capabilities in each of the four decision modes of the
framework. Earl and Hopwood su perimpose various roles of information systems on the
decision making processes considered by Thompson and Tuden and they use a machine
metaphor to describe information systems, as presented in Figure 2.3.4. Turing described a
computer programme as an abstract specification of a machine , in terms of the input/output
relationship resulting from its computation.
Figure 2. 3.4 Existing and potential role of information systems for handling uncertainty
When decision making by ‘computation’ is possible, information systems serve as ‘answer
machines’ decision situations.
When the uncertainty is related to disagreement regarding c ausation, the information system may
be a ‘learning machine’ providing a range of ad -hoc or, ‘what -if’ analysis. However, Earl and
Hopwood note that the use of computational information systems are extended into this area,
resulting in the use of ‘answer m achines’, “ which mask the uncertainty… and very often assume
the very certainties that cannot be found” . When uncertainty and disagreement relate to the
organisational objectives, decision making assumes a ‘political’ flavour, where values,
expectations a nd preferences conflict. The opportunity exists to use ‘dialogue machines’, which
would facilitate consultative and participative processes when exploring possible solutions.
However, information systems are used as ‘ammunition machines’ which facilitate t he
promotion and articulation of a particular preference position, which is then used to influence the
outcome by shaping what is regarded as problematic and by emphasising a credible solution.
When uncertainty over causation further complicates the decisi on problem and inspired decision
58
making is required, an ‘ideas machine’ would generate opportunities for brainstorming and for
creative thought.
In reality, information systems are used to rationalise and to defend decisions thus enabling the
decision maker to legitimise and to justify actions that have already been decided upon, and are
rarely used to actually help decision makers to make a decision . The perception of ‘Answer
Machine information’ as being ‘true’ is much higher than the perception of in formation that
results from a process of rationalisation and experimentation, which of itself has very few
‘guarantees’ for the manager. While this indicates a lost opportunity, management perception of
a robust decision making process remains as one where decisions taken can be justified and
rationalised with verifiable information .
There is clearly a need for the information systems that exist at each node of the Earl and
Hopwood framework. However, many of the opportunities associated with the informati on
systems that could be developed are lost: including information systems which would facilitate
learning possibilities based on outcomes from decision makers’ chosen actions; and information
systems that would facilitate creativity and inspiration bases for “ideas” generation. Moreover,
Information Systems as they are traditionally developed often attempt to remove the
uncertainties in the environment, especially when it involves procedures and processes that
neither the manager not the designer fully und erstand. In recent times, BI systems exacerbate this
scenario and make it even harder to support the manager’s awareness and focus of weak signals
in the environment, many of which may be effectively filtered out by structured BI tools
. Inquiry systems ar e very often designed to provide specified answers rather than interrogation
facilities. Furthermore, uncertainty tends to be voluntarily masked by the development of quasi –
certain systems where assumptions are made to fill the gap in managers’ understandi ng of their
environment, as opposed to it being exploited for what it is. In an ideal world, a DSS should
prompt executives to question their own .
The integration of supply and demand
The relationship between information processing theory and decision maki ng is based on the
assumption that individual decision makers have the ability to acquire, to interpret and to analyse
information, and to have memories to store information on a long and short term basis. Decision
support does not only relate to tools per se, but rather it concerns enabling and facilitating better
decisions within organisations. Decision support in an organisation allows the incorporation of
wider elements under consideration when supporting decision making that focusses on the
59
decision ma kers’ specific problem solving tasks, and ensures the output is packaged in a way
that makes it easy for managers to use.
The interpretation and analysis of information is often in accordance with the application of one
or more decision rules that simplifi es the selection of one alternative over another. Decisions are
made in accordance with formalised rules that are derived from an understanding of what is
appropriate for an individual decision maker and a specific decision problem. Schoemaker
differentia ted between holistic and nonholistic categories of decision rules. Holistic evaluation is
the most prevalent form of inquiry and normally relates to routine events. This form of inquiry
requires a considerable volume of information in order to provide mean ingful results. During
holistic evaluation, the decision maker will identify “a set of well -defined objectives and goals,
and is assumed to be able to express preferences between different states of affairs according to
the degree of satisfaction of attain ing these objectives and goals . Holistic evaluation is best
suited for structured problems since the decision maker’s preferences are clearly understood and
are clearly stated, and evaluation of the outcomes is without ambiguity.
In nonholistic decision ru les, individual alternatives are compared with one another, or with a
standard, in a sequential elimination process equivalent to heuristic elimination , Google Scholar
refers to heuristic decision rules as providing satisficing strategies or outcomes, such as finding
optimum solutions within simplified less complex decision problems, and a satisficing solution
in complex more realistic decision problem situations. Newell and Simon use the
term “heuristic search method” to describe a mental model of search formulation for solving
numerical, logical and other kinds of cognitive problems, and they suggest the effectiveness of
particular heuristics as a function of the structure of the decision problem. Heuristic search is
considered as ‘what -if’ analysis, whic h is regularly used to perform either sensitivity analysis or
robustness analysis when comparing input variables for decision outcome exploration. The
decision maker’s evaluation of the outcome set incorporates their own heuristics and preferences.
However, people tend to be inconsistent in such judgements, especially when evaluation of the
outcome set is required within a short timeframe, when the outcome is critical or when the
external environment is volatile and distracting. Achieving an improved heuristic output may
involve considerable additional information processing by the decision maker, and it may not
generate a much improved outcome set, as invariably a plateau is reached that can be surpassed
only with quite different heuristic searches. An example of the possibilities that can occur when
significantly different heuristics are employed, is reported by Hopkins and Brokaw .
60
A level of creativity and suggestive guidance incorporated into the resultant system, through the
involvement of data a nalytics experts, achieved new and improved heuristics. However, such
examples have been reported mostly for activity specific scenarios, and rely on the existence of
clear modelling and reasoning to underpin the optimisation algorithms that are being appl ied.
Sage proposed a further classification to describe a decision maker’s understanding derived
through reasoning by analogy and intuition, and other forms of nonverbal almost unconscious
perception, which he classified as “ wholistic judgement ”. Wholisti c judgement is based on the
previous experience of the decision maker, and is analogous to “ making holistic associations ”.
Making holistic associations acknowledges the more complex aspects of intuitive processing
usually associated with the intuitive deci sion making of experts. Making holistic associations
involves “ a process in which environmental stimuli are matched with some deeply held
(nonconscious) category, pattern or feature . The ability to make holistic associative connections
between the environm ental stimuli and their underlying cognitive structures is developed over
time in a dynamic and deliberate way.
2.3.3 Techniques that can be used in order to make maximal effective decisions
Decision tree
This technique is one of the most useful techniques that can be used by the manager in order to
make an effective decision. It`s effect is demonstrated by the fact that it takes in consideration
the risk and the material outcome of the decision.
Starting from the managerial problems that it solves, three t ypological classes can be
distinguished in the theory of decisions:
1. Certainty determinations – each variant leads to a clearly defined result and there is no doubt
that if a particular variant vj is chosen, with a probability of 100% the final result wi ll be the
predetermined result.
2. Risk -based decisions – in which the probabilities of the events that define the problem and the
results or consequences of each decision variant are known. For example, we do not know
tomorrow's weather but we know the pr obability of rain. Determining the probabilities, objective
or subjective, is the sensitive point in a decision -making process of this type, often faced with
unpleasant "surprises" by producing results different from those expected.
61
3. Determinations in un certainty – the solutions adopted are not based on information on the
likelihood of occurrence of natural states, events or decisional alternatives. For example: the
likelihood of an ecologist party appointing a prime minister over 20 years is not known.
In the first case, the solution is adopted according to the most favorable result, in the second case
the solution is determined according to an expected value, and in the latter case the choice is
motivated by using specific methods of game theory.
Regardl ess of the complexity of the managerial problem or the techniques used for the analysis,
all decisions are made up of an alternation of decisions (decision situations) taking into account
the probability of events, a graphical construction called a decisio n tree, a stochastic type
instrument used for adoption decisions under risk and uncertainty. The decision tree allows the
sequencing of a complex managerial problem into a logical and orderly set of simpler problems
and the concrete mathematical evaluation of gains or losses at each decisional level. The decision
tree is used to solve complex management problems with major financial implications:
– introduction of new products in the manufacture;
– choosing the location of the production units;
– choice of equipment;
– expanding production capacities;
– Planning maintenance and repairs of the equipment.
Identifying the problem, setting the goal and determining possible alternatives.
Structuring and building (graphical representation) of the decision tree.
Determining the level of consequences associated with each alternative; the final results of the
alternatives Ri.
Determining event probabilities; the natural states have a certain probability of succeeding pi.
The calculation of the mathematical expectation for each decisional alternative, the stage where
the expected values for each possible combination of alternatives and the states of nature are
estimated.
Sm = SpiRi
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6. Choosing the decision variant based on the maximum value obtained. In the Anglo -Saxo n
specialty, this value reported in monetary units is marked with EMV abbreviation from the
Expected Monetary Value.
The decision tree, a graphical tool for analyzing variants, highlights the sequences, stages in a
decision -making process, mainly based on a series of states of nature called events. These states
of nature defined by specific probabilities are correlated in decisional tree with decisional
alternatives, determining at each level the gain for each combination of alternatives and the states
of nature.
The state of nature, the event, is a well -defined situation, an event that influences or not the
decision. Example of the state of nature: tomorrow is a rainy day.
The alternative to a decision tree is the course of the action or the strategy that c an be chosen to
make a decision. Alternatives focus on decision nodes represented graphically by signifying that
in that sequence a selection of a possible alternative is required. Example of alternative:
tomorrow I do not take the umbrella.
The expected m onetary value (EMV) for an alternative is determined as an algebraic sum of
values specific to the nature weighted by its probability of being realized.
EMV (i) = The value of the first state of nature x The probability of occurrence of the first state
of nature + The value of the second state of nature x The probability of occurrence of the second
state of nature + The value of the third state of the nature x The probability of occurrence of the
third 3rd state of nature + …
The option in the decision node will be chosen from the alternatives that are generated from that
node and that achieves the maximum expected monetary value.
Example: “Moldcell” SA investigates the possibility of increasing production capacities,
establishing that three options c an be considered: a large factory can be built, a small factory can
be built or not built. The market may be favorable or unfavorable with a probability that the
manager can determine.
The decisional tree of the stated problem (fig. 4.3) is constructed so that all the decisional
alternatives and all the states of nature, represented in a step -by-step arrangement, logic, can be
found.
Decision point:
63
a. We build a large shop
b. We build the small shop;
c. We do not build
Favourable market
Unfavourable market
Favourable market
Unfavourable market
Do not build anythiung
Figure 2.3.5 : Decision tree
Determining the values of the consequences for each alternative can be used to construct a
synthesis and suggestive decision table
Consequences of alternatives
Alternatives Sates of environment
Favorable Unfavorable
Construction of big shop 200 000 -180 000
Construction of small shop 100 000 -20 000
Do not construct 0 0
Figure 2.3.6 : Decision table
1
2
C
B
A
64
If we do not know the probability that characterizes the states of nature, we have a decision –
making problem in case of uncertainty that can be solved based on specific game theory criteria:
maximax, maximin and the probability average (e qual probability for both alternatives). So:
– if we choose the maximax criterion, which means maximizing the winnings – a large factory is
being built which in case of success will bring a win of 200,000 u.m .;
– if we choose the maximin criterion, which means minimizing the losses – it does not build, the
loss in this case being 0;
– if we choose the average probability criterion, which implies the determination of the mean of
the consequences for each alternative:
– for large factory construction the gai n is (200,000 – 180,000): 2 = 10,000 u.m .;
– for the small factory construction the gain is (100,000 – 20,000): 2 = 40,000 u.m .;
– for not building the win is 0.
– it will be decided to build a small factory that corresponds to a higher average profit.
The risk decision is a probabilistic decision, the states of nature being appreciated by certain
probabilities. Under these conditions, the conditional values in the decision table are weighted
with the probability of occurrence of each state of nature and the expected value (EMV) for each
alternative is determined. For our example, the market can manifest itself in two situations,
assuming that the following probabilities were determined: the favorable market – 0,6 and
unfavorable market – 0,4.
According to the above presented for each alternative we have:
EMV1 = 200,000 x 0,6 – 180,000 x 0,4 = 120,000 -72,000 = 48,000 u.m.
EMV2 = 100,000 x 0,6 + ( – 20,000) x 0,4 = 60,000 – 8,000 = 52,000 u.m.
EMV3 = 0 x 0.6 + 0 x 0.4 = 0
So, based on the results obtained, t he second alternative will be chosen, which will ensure a
higher monetary value.
Methods of establishing of decisions in condition of certainty
65
In substantiating decisions in certainty, each action leads to a determined, known outcome. The
elements involved in making these decisions are predominantly of the type of controllable
variables with known characteristics and developments.
Global utility method
– Facilitates the choice of the optimal variant
– constitute a logical support for anticipating th e benefits of different possible ways of action
– The optimal variant is determined by different decision criteria and important coefficients
– The utility of a variant is calculated according to the economic consequence of a variant
according to a decisio nal criterion
The Electre method
– is based on choosing the optimal variant that surpasses the other variants
– calculate the utilities for each optimization criterion of the decision
– assigning importance coefficients
– calculating the coefficients of co ncordance and discordance
– choosing the optimal variant with the overlay matrix, being anticipated by two other types of
matrices: the disordered matrix -matrix and the difference matrix
Onicescu method applied in two variants:
– first – the criteria for c hoosing the optimal variant are equally important,
– second – the criteria of importance are differentiated.
Methods for the basis of decisions in risk conditions
Decisions at risk are characterized by several states of nature, with the likelihood of their
occurrence being known and the involvement of variables that are less controllable and
insufficiently known.
66
The global utility method involves the matrix of economic consequences, primary utilities and
synthetic utilities, the optimal variant being considered as the one that is "preferred" to the
others.
The mathematical expectation method applies differently depending on the number of decision
criteria taken into account. In this situation we calculate the usefulness of the synthesis of the
variants according to the criteria established according to the condition of the objective
conditions. The optimal variant will be determined according to the usefulness of the synthesis
and the probability of occurrence of a certain condition in the situation of objective conditions.
Simulation involves making decisions based on models. In this case, some models, which
represent the simplified reality of some systems, are "drawn up" so as to allow the choice of the
most efficient line of action in the simulated fi eld. For this, the decision maker must measure
economic phenomena and processes, but also experiment, which poses a great risk if the created
model does not behave equally in the real situation it represents.
Decision making under the influence of certaint y, risk and uncertaninty
Decisions taken under uncertainty are specific to situations where the decision maker can not
appreciate the state of nature, as well as the consequences of achieving the alternatives.
In this situation, the decision -maker will only rely on intuition and experience, and the
results of decisions will depend entirely on the character of the decision -maker – optimistic or
pessimistic.
However, a number of rules and techniques are used to make decisions under uncerta inty.
Decision making methods and techniques under uncertainty
1. Optimistic technique – indicates that the optimal variant is the one that assumes maximum
advantages when the most objective conditions are most favorable.
In case the decisional cons equences are expressed by economic effects:
⏟
⏟
.
How does it work? Choose from each line the highest score, then choose the line that ensures the
above condition.
In case the decisional consequences are expressed through economic efforts:
67
.
⏟
⏟
2. The pessimistic technique – established by Abraham Wald, indicates that the optimal variant is
the one that assumes the maximum advantage if the objective conditions are the most
unfavorable.
In case the decisional consequences are expressed by economic effects:
.
⏟
⏟
How does it work? Choose from each row the lowest score, then choose the line to which
the highest result corresponds.
If the decisional consequences are expressed in economic efforts:
.
⏟
⏟
3. The technique of weighted optimism – created by Hurwitz, balances the consequences of
optimistic and pessimistic technique, by introducing a coefficient of optimism of the decident – a.
The coefficient of optimism may vary within the limits – 0≤α≤1.
For each decision variant a weighted value is determined by applying the expression:
.
The relationship on which the final decision is made is:
• If the decisional consequences are expressed by economic effects:
.
• If the decisional consequences are expressed through economic efforts:
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4 The technique of minimizing the maximum risks – established by L.Savage, indicates that the
optimal variant is the one for which the risk of implementing the decisional variant under real
conditions is minimal.
The steps for applying this technique are the following:
a) Determining the ri sk matrix in which each element is obtained by subtracting from the
maximum value of the column elements of each element
rij = max rij -rij
b) Determination of the maximum values of the risks obtained in the point a)
c) Determination of the minimum value between the maximum values specified in point
b). ⏟
⏟
1.5 The technique of proportionality – developed by Bazes -Laplace, starts from the idea that
each state of objective conditions has the same probability of occurrence, ie objective conditions
are equivocal. According to this technique, the optimal variant is that variant as the arithmetic
mean of the results of the state considered is the most favorable:
∑
where n represents the number of objective conditions states.
Note: Usually, for making decisions under uncertainty, it is recommended that the decision
maker analyze all of the above criteria, and the final result will be consistent with the alternative
that is obtained in most criteria
Specific self -leadrship process
Figure 2.3.7 , below, shows the Vroom -Yetton model. The framework poses seven "yes/no"
questions, which you need to answer to find the best decision -making process for your situation.
As you answer each of the questions, you work your way through a decision tree until you
arrive at a code (A1, A2, C1, C2, or G2). This code identifies the best decision -making process
69
for you and your team. (Note that, in some scenarios, you won't need to answer all of the
questions.)
Figure 2.3.7 : The Vroom -Yetton Decision Model
The Vroom -Yetton Decision Tree: Adapted from Leadership and Decision Making by
Victor H. Vroom and Philip W. Yetton by permission of the University of Pittsburgh Press.
Copyrigh t © 1973 University of Pittsburgh Press.
The following codes represent the five decision -making processes that are described by the
model:
Autocratic (A1): You use the information that you already have to make the decision,
without requiring any further in put from your team.
Autocratic (A2): You consult your team to obtain specific information that you need,
and then you make the final decision.
Consultative (C1): You inform your team of the situation and ask for members' opinions
individually, but you don't bring the group together for a discussion. You make the final
decision.
Consultative (C2): You get your team together for a group discussion about the issue and
to seek their suggesti ons, but you still make the final decision by yourself.
Collaborative (G2): You work with your team to reach a group consensus . Your role is
mostly facilitative, and you help team membe rs to reach a decision that they all agree on.
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In general, a consultative or collaborative style is most appropriate when:
-You need information from others to solve a problem.
-The problem can't be easily defined.
-Team members' buy -in to the decision is important.
-You have enough time available to manage a group decision.
-An autocratic style is most appropriate when:
-You have greater expertise on the subject than others.
-You are confident about acting alone.
-The team will accept your decision.
-Ther e is little time available.
Ishikawa fishbone diagram
About the Tool
Cause and Effect Analysis was devised by professor Kaoru Ishikawa, a pioneer of quality
management, in the 1960s. The technique was then published in his 1990 book, "Introduction to
Qual ity Control."
The diagrams that you create with are known as Ishikawa Diagrams or Fishbone Diagrams
(because a completed diagram can look like the skeleton of a fish).
Although it was originally developed as a quality control tool, you can use the techniqu e
just as well in other ways. For instance, you can use it to:
Discover the root cause of a problem.
Uncover bottlenecks in your processes.
Identify where and why a process isn't workin g.
How to Use the Tool
Follow these steps to solve a problem with Cause and Effect Analysis:
Step 1: Identify the Problem
First, write down the exact problem you face. Where appropriate, identify who is involved,
what the problem is, and when and where it occurs.
Example:
In this simple example, a manager is having problems with an uncooperative branch office.
Tip 1:
71
Some people prefer to write the problem on the right -hand side of the piece of paper, and
develop ideas in the space to the left. Use whichever approach you feel most comfortable with.
Tip 2:
It's important to define your problem correctly. CATWOE can help you do this – this asks you
to look at the problem from the pe rspective of Customers, Actors in the process, the
Transformation process, the overall World view, the process Owner, and Environmental
constraints.
By considering all of these, you can develop a comprehensive understanding of the
problem.
Step 2: Work Out the Major Factors Involved
Next, identify the factors that may be part of the problem. These may be systems,
equipment, materials, external forces, people involved with the problem, and so on.
Try to draw out as many of these as possible. As a starting po int, you can use models such
as the McKinsey 7S Framework (which offers you Strategy, Structure, Systems, Shared
values, Skills, Style and Staff as factors that you can consider) or the 4Ps of Marketing (which
offers Product, Place, Price, and Promotion as possible factors).
Brainstorm any other factors that may affect the situation.
Then draw a line off the "spine" of the diagram for each factor, and label each line.
Example:
The manager identifies the following factors, and adds these to his diagram:
-Site.
-Task.
-People.
-Equipment.
-Control.
72
Step 3: Ident ify Possible Causes
Now, for each of the factors you considered in step 2, brainstorm possible causes of the
problem that may be related to the factor.
Show these possible causes as shorter lines coming off the "bones" of the diagram. Where
a cause is larg e or complex, then it may be best to break it down into sub -causes. Show these as
lines coming off each cause line.
Example:
For each of the factors he identified in step 2, the manager brainstorms possible causes of the
problem, and adds these to his diag ram, as shown in figure 3.
73
Step 4: Analyze the Diagram
By this stage you should have a diagram showing all of the possible causes of the problem that
you can think of.
Depending on the complexity and importance of the problem, you can now investigate the
most likely causes further. This may involve setting up investigations, carrying out surveys, and
so on. These will be designed to test which of these possible causes is actually contributing to the
problem.
Chapter 3: Assortment enlargement proposals for “Moldcell” SA
“Moldcell” SA, besides telecommunication and television services offers a set of gadgets,
including smatphones, tablets, TVs, laptops and various gadgets, meant to ease the life of the
customers or for their ente rtainment. The gadgets are various, consisting of bluetooth headsets,
apple watches, earphones, gyrocopters, VR glasses, hoverboards, watches , chargers, playing
consoles, go -pros and powerbanks. During the practice, there was observed that these objects ar e
bought very often and are meant to ensure the additional profit for the company, besides the
communication contracts and smartphones.
In this chapter will be discussed the opportunity of enlargement of the assortment line of
“Moldcell” SA in order t o increase the profits of the company, by chosing one of the proposed
innovatiove products.
3.1 S + P (safe + protect ed)
The name : S + P (safe + protect ed)
The purpose of this innovative project is to provide security for the entire population, namely
children, teenagers, students, adults and elders. Our goal is to reduce the number of cases after
the latest statistics: 377 -rape, theft, hooliganism -759-91, to ensure the well -being of the
inhabitants of Chisinau.
Objectives
The basic objective of the product : diminishing number of offenses , physical attacks and violent
robberies, trades, hooliganism by late 2018 with 10%.
Objective 1: degree derivative placing on the market of this innovative device.
Objective 2: introducing degree derivative an additional functions as the ultrasonic button
against dogs.
Specific objective: informing population with a promo.
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Objective: each individual Member of the Organization shall be responsible for promoting
creative ideas that will help us to penetrate the ma rket faster.
Innovative product feature
It is a small device made of silicone and plastic, with dimensions of 5/2 cm, takes place for the
battery cr2032, has a Bluetooth system and two functions, it can be attached to the garment,
handbag, belt may be at h and.
Market analysis
According to the National Bureau of statistics presents data on below on some population
structure by age groups of Chisinau from 01.01.2014, where people aged between 15 -64 years
represents 78.7% who are potential customers What will they buy our product, but we were
focused more on the student and I did a poll where we come to the conclusion that 65.2 percent
of the students are likely to buy such a device, and its recommended price environment is 951
pence.
Figure 3.1 Age structure of the population of Chisinau
Potential consumers Need is the need for security . When biological needs are met, people begin
to focus on their physical and psychological safety. Any danger that threatens the physical and
psychological integrity of a person to be eliminated. Here comes the help our device that helps to
maintain the phys ical safety, one of the most fundamental needs.
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Figure 3.2 Prioritising needs pyramid after Abraham Maslow
The characteristics of the target group are vulnerability to physical, violent attacks and
hooliganism on young people, adults and the elderly. W hat determines the decision of purchase
of this product is the price that actually is one major 1199 lei, because the average monthly wage
in 2015 is 4863 lei, while expenditure 2048.5 lei per person, which causes hardly purchase the
device. On what our co nsumers spend is seen in the following table:
Figure 3.3 Structure of expenditures of population
Those presumed to be 4.4% expenses intended for our product.
On categories of population, the maximum value of the living subsistence in the employable
population returns -1,823 lei, and in particular men -1,971 lei lei compared with 1,665 for women.
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The minimum existence level for children constitute an average of 1653 lei monthly, with a
differentiation of this indicator depending on the child's age, from 644 pence for a child aged up
to 1 year until 1866 lei for a child aged 7 -17 years.
Depending on the environment of their residence, the minimum existence level for children in
big cities is 12 per cent higher compared to rural areas, and in the case of c hildren aged up to one
year this difference constitutes 19.9%.
For retirees, living subsistence constituted 1,444 pence and 83.8% of the value represents an
average for the total population. The average monthly pension set at 1 July 2015 was 1,170
pence, w hich respectively make it possible to cover the subsistence level for this category of the
population at level 81%. If we consider the average pension for age limit, that report is 83.1%.
According to NBS below the table with population occupied in the Chi sinau municipality.
In the table below, you can deduce the following: occupancy rate in Chisinau by groups of age is
15-24 years 25 -34 years 29%, 62%, 71%, 35 -44 years 46 -54 years 65% by age group we retired
because of the axis above we see that the size o f the pensions does not cover the existence
minimum for that reason isn't cost effective to rely on this age category.
Table 3.1 Population occupied in Chisinau
Innovative product uniqueness and success factors for the project
Why our product is unique? Because:
It's easy to use, i.e. easy to set application and changed the battery, do not require extra effort for
its entry into service.
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Are automatically saved in the phone's battery when it reaches the limit of 10%, in order to ensure
its operation.
It is a useful and reliable device.
Copes with State of mobile network insecure.
It combines two functions: alarm and ultrasound.
Has special application where you can set (country, city, often populated places).
Nece ssary financial sources:
These costs will be allocated for:
-Bluetooth System and alarm
-Baterry
-Ultrasound Device
-Material (silicone and plastic)
-Working (paid salary for an IT specialist)
-IT Program
When ordering more than one unit is the delivery free of charge. The estimated cost for the
project is $48036.2.
Risks
-The appearance of competitors on the market with a product like
-The price of inaccessible for some consumers
-Lack of specialists in the field for the development of the idea
-In the event that ends the phone battery may not work
-Not compatible with all models of mobile phones
A risk would be if the persons contacted are away will require more time to reach the place
where you are in danger.
Income
Purchase price of the p roduct in 50 $
Profit margin 16%
Mark -up price = price per unit margin/(1 -income margin) = 50/(1 -0.16) = 59,52 ≈ $60
The estimated price per unit in lei is $60 * 20 = 1200lei
Sales income=Sales price unit*quantity sold
Proceeds from sales = 1200lei * 922 = 1.106.400 lei
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Benefits
As we launch a new product in the market do not have competitors so we will hold the largest
market share. This innovative product offer on the town square in Chisinau will help ensure the
well-being of the population.
General des cription of the project
Name of proposed project: S + P (safe + protection) this project provides for the reduction of the
number of violent attacks, attacks of stray dogs, trafficking in human beings and satisfying one
of Maslow's pyramid of needs -from th e safe. This innovative idea provides for the safety and
protection of the population from Chisinau city.
Field: industrial -commercial, based on nanotechnologies
The essence of the project: Bringing to market an innovative product for the Republic of
Moldova, and the idea for the well -being and needs of society.
Project direction: our plans for the future are to expand our market across the country and to
minimize the costs of supply to reduce the price and to be accessible to all consumers, we are all
schoolchildren and the elderly who do not have opportunities to purchase our device to hold one,
because usually these people are most often placed in danger given that to be physically abused,
bullied and we want you all to know our product.
To implement the investment project we need for the implementation of this plan. We also have
to work over to consumers about this device accepted by the media, social websites, section:
innovations, flyers, radio, box -news, saloons where cell phones are marketed.
This project has an important enough for the city, because it decreases the rate of violent attacks,
traffic in human beings, dogs stray attacks and other dangers. Is geared to maintain the safety of
the city's inhabitants, thus raising their well -being.
The price of a product constitutes $60 per unit, in the case of purchase of 2 items discount 10%
is made, and in the case of procurement of 3 products or more 15% discount is made.
The project is innovative in that it represents a new and useful device on the Moldovan market,
because it has a bluetooth system that notifies the person's location in the event of danger, it has
a button with the function to start the ultrasound for the removal of stray dogs, has a mini
speaker where spreads a powerful sound (alarm ).
Description of product or service
S + P is a small device namely 5/2 centimeters. It is made of silicone and plastic with a
Bluetooth system, alarm system, and an ultrasound system what's bothering them off and
homeless dogs, so it has two buttons, one that if you keep pressed Bluetooth and sets off an
alarm and the second beginning Ultrasound as if keep pressed 2 -3 seconds on him. It contains a
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battery CR2032 and can be freely bought in case that doesn't work anymore. His color differs,
we have colors green, pink, blue, gray, black and Brown. For that to work you need to download
our software for free from the App Store and is compatible only for Android version. The
application must set the country and city where you are, then call option, message and mail must
choose the person from your list of contacts you want to call automatically when the Bluetooth,
S + P has 2 options, i.e. two buttons that can be pressed :
1. In case of danger when you are attacked by anyone, given the pressed 2 -3 seconds to sta rt a loud
sound that can alert the offender and may attract the attention of those around him, plus the turns
on Bluetooth, which in turn connects with the personal phone and automatically transmits a
message, sound, at 3 different people that you choose o n the basis of preventive programs that
you download to your phone. Information transmitted via message or email will be updated once
every 2 -3 min with your location, heralding subjects were transmitted the message and email
with your location on the map.
2. In the event that you were attacked by dogs keep pressed on the other button that emits an
ultrasonic anti dog what will bother them and put them on the run, this sound has the area of
maximum efficiency of 1 -2 m versus animal but can reach and the ra dius of 8 m.
Marketing plan
Potential customers: Populate with ages ranging between 15 -65 years, constituting 78.7% of
the population of Chisinau city.
How to distribute the product: we distribute information about our product OnLine on social
networks namely on the whereabouts of our consumers than spend more time namely Facebook
and Odnoklassniki, these are popular social networks in the Republic of Moldova according to
the diez.md recently there has been a number of 500,000 users Facebook in Moldova, and in
accordance with the indigital.md on the site are about Odnoklassniki 759.669 visitors what helps
us to promote the product. Of course that'll create during our official site with everything related
to our product and where you will be able to order without paying for delivery. Our products also
will be available in stores for mobile phones where you can procure.
We will be limited to the city of Chisinau that will be in our market.
Advantages:
-Provides safety when you wal k through on city streets;
-Protects you from dogs tramps the streets;
-Scare people who want to attack you;
-Show your location for a close person.
Disadvantages:
80
-In case that turns your mobile phone this application does not work;
-Alarm can scare but cannot prevent some physical attacks and may take a long time until the
person has been contacted to come to the place where you are;
-Your mobile phone may not catch in some areas, however our application copes with unreliable
networks.
Forecast sales
After the questionnaire conducted among students, currently we focus on this group of
consumers, from which we can deduce an estimate of sales. On the basis of the questionnaire
developed over 90 students have determined the likelihood that they will buy o ur product by
65.2% and the price that would buy this cartrawler branding of 951. According to the NBS total
number of college students in Chisinau represents 117 thousand and occupancy rate for ages 15-
24 years is 29%, so we have the following calculation:
1) 117 000*65,2%=76284 pottential consumers
2) 76284*29%=22122 consumers will have enough resources to buy our product
3)22122/12=1843 number of units per month
However, considering that these data may not be accurate and many factors could influence this
demand we estimate at 922 units to minimize the risk of increasing the stocks of products which
are not sold.
Estimated expenditure for the purchase of those units will be
$50 * 922 = 46100 $
Control 4.2%
1)46100$*4,20%=1936.2$
2)46100$+1936,2$=48036,2$
These are estimated costs for implementation of the given project.
Consumers are typically reluctant and therefore we will deal with sales namely stimulation free
product they attempt will take place at the trainings organized by us will know people with
details about our product and about the benefits of the product, we will attach a gift, and we also
offer discounts when purchasing multiple products, promoting social networks Facebook and
Odnoklassniki and through the official website.
In carrying out the project we have the following risks:
-lack of investors
-lack of specialists in IT
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Analysis of the market and competitors
Observation of the tables below we infer that launching the product we will fit into one of the 4
quadrant and you will need to use strategies for growth
The evaluation of internal factors
Indicators Coefficient
of influence Appraiser
1 Appraiser
2 Average Weighted score
1. Qualified specialists in
technology and IT 0.1 3 3 3 0.3
2. Investment Program
Kick starter 0.2 4 3 3.5 0.7
3. Asked the market 0.1 3 3 3 0.3
4. to increase the welfare
of population 0.2 3 3 3 0.6
5. to increase the power
of the national currency 0.1 2 2 2 0.2
6. economic Instability 0.1 1 1 1 0.1
7. Advanced Technology 0.1 2 2 2 0.1
8. Competition 0.1 1 1 1 0.1
TOTAL 1 – – – 2.5
The assessment of external factors
Indicators Coefficient
for
importance Appraiser
1 Assessor
2 Average Weighted
Pnctaj
1. Innovative product 0.2 4 3 3.5 0.7
2. Creating brand image
at regional level 0.1 3 3 3 0.3
3. Product quality 0.1 3 3 3 0.3
4. sales volume
Expansion 0.1 3 3 3 0.3
5. financial Insufficiency 0.2 1 1 1 0.2
6. the absence of raw
material 0.1 2 2 2 0.2
7. the absence of
investors 0.1 1 1 1 0.1
8. extension of
advertising 0.1 3 2 2.5 0.25
TOTAL 1 – – – 2.35
Financial plan
Initially we will commercialize 922 units. Estimated costs for these 922 units are:
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-Bluetooth System and alarm
-Drums
-Ultrasound Device
-Material (silicone and plastic)
-Working (paid salary for an IT specialist)
-IT Program
Estimated costs for procurement of 922 units are
$50 * 922 = 46100 $
Delivery to the purchase of more than one unit is free
Control 4.2%
1)46.100$*4,20%=1.936,2$
2)46.100$+1936,2$=48.036,2$
This amount is expected to implement this project -$48036.2. Accordi ng to NBM below the
dollar rate dynamics in the last 3 months, where we can determine the course of the environment
with which I could buy foreign currency. We can do a mean to have a threshold of profitability
and to estimate and price in local currency.
The last value of the course and the first of September to see the media throughout this period of
time:
(20,22$+19,78$)/2=20$
Estimated amount in national currency for the project is 960,720 lei
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Figure 3.4. The evolution of the exchange rate for the months of September to December
6) Possible risks and results of the project
Risk analysis
Risk category and name Consequences Preventive measures
The appearance of
competitors on the market
with a product like
The need to lower the price to
maintain its market position.
Due to the encroachment of
competitors ' expansion new
markets. Implementation of creative
ideas to improve the product.
Using diverse techniques for
attracting consumers.
Innacesibil price for some
consumers As a consequence may be weak
demand on the market. Introduction of price
reductions to purchase more
products.
Lack of experts for the
development of the idea We cannot provide the service
of repair of the product in the
event of failure. Specialization in the field of
IT engine ers.
Where ends the phone
battery cannot function. The decrease in demand of our
product. Activating the program to
save battery when you reach
10%.
Not compatible with all
models of mobile phones It will not be useful for
consumers IT training programme s
which will allow
compatibility with other
mobile phones
Conclusions
On the basis of the market survey and analysis of the questionnaire implemented we have
determined that there will be a greater demand on the part of students and adults that have
children. We strive to expand our market throughout Moldova so as to expand our trading area of
our product. We form a team that will work more intensely on the design of the device, to its
promotion by new methods, the addition of new functions thanks to creative ideas. Due to the
implementation of this innovative ideas in Chisin au will have greater success as an adult average
income is higher when compared to other geographies which allows the sale of the product, that
is to say we have a great potential of outlets in that market.
3.2 Smart alarm
Name: Smart Alarm
About 33% of the population is late at work, university, school.
According to a study conducted by Magenda Consulting in the Republic of Moldova, the rate of
delays reached 9%.
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The goal is to provide an effective, effortless wake -up method that saves us time and energy ,
motivating us for the whole day.
Objectives
Fundamental objective: Reduce the 9% rate (of the RM population) to 1 -2% over the next 2
years.
Goal 1 derived objective : Introduce this innovative product to the market.
Goal 2: Enter a specific element (the cooler area than the room temperature and a digital
balance)
Specific objective: Educate the consumer. To present its effects.
Individual objective: Each member of the organization is responsible for promoting creative
ideas that will help us get into the market faster.
Individual objective: Each member of the organization is responsible for promoting creative
ideas that will help us get into the market faster.
The characteristics of the innovative product
It is a soft touch mat, on the surface of which is an LCD display (digital display with
touchscreens and in tegrated speakers) that shows the time and allows to set the alarm.
Moreover, it reflects a strong light (which comes on when an alarm sounds) that could bother
you while you sleep. It has a simple design but the material it is made of – is a qualitative and
pleasant to the touch. The opposite side the surface is made to prevent from sliding on the floor
of the mat.
This mat is in size: 15.5 * 23.5 cm.
Its surface ha s a lower temperature than the temperature of the room.
It works in the following way:
1. Set the wakeup time
2. With USB, user can load the song and motto what he/she want to listen in the morning
3. It is set the weight in order to customize the alarm
4. Once the alarm sounds, user needs to stand up and stay on it
5. Stand for 10 seconds to stop it
6. Start the day with mottoes that will motivate you to do great things
Note:
– Put both feet on the mat, otherwise it does not stop
– After the sound is off , the carpet is lit for 20 seconds. It will bother you if you try to asleep
back
– The digital balance that is part of the functions of this mat, also can be used.
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Market analysis
This product will be destined for the Republic of Moldova market, namely Chisinau city,
because there are about 23% of the population living here, according to the NBS.The final
consumer is population that include 15 -64 age, which accounts for 78.7% of the urban
population.
Figure 3.5 . Age structure of Chisinau population
The product is intended especially for schoolchildren, liciens, students, and adults in the
workplace.In order to be able to ensure that this product is easy to trade, we have researched the
number of occupied population in Chisinau municipality, a ccording to the NBS (2013 -2015)
Table 3.2. Population occupied in the Republic of Moldova. Source NBS.
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If we analyze potential customers by their revenue and expense:
The expenditures in the urban environment in the urban area are estimated at 2407,3 lei
(of which 3,5% are expenditures for the home furnishing)
Table 3.3 . Incomes of Republic of Moldova Source NBS.
By making a questionnaire at the university, we have reached a pretty good and
promising result. Approximately 72% of students want this product.
The uniqueness of the innovative product and the success factors
Why is the product unique? Because:
Motivates you daily
It can cheer you on immediately after you get up with motivational quotes you
can customize. Motivating you to accomplish your daily goals!
Save more time for you
Wake up on time, every time! The average people, spends 26 years in bed! How
much of that is from over snoozing? Cheers to life extension!
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Easier to wake up in time
We’re most efficient in the morning, with limited distractions and our will -power
maxed. As we wake up more efficiently, we’ll naturally get more done!
Helps you to be more productive
Reduces stress
Easy to set
All you got do is plug in the batteries and it is good to go! For customized
speeches you just need to plug it into to computer and our easy to use software
will pop up
Has special functions
Required financial resources:
All expenses are made for the following items of the product:
– Touch Sensor Digital Display (reflects light that can bother while sleeping)
-Powerful Built -In Speakers (wakes you up with your favorite tunes)
-CSlow Rebounding Memory Foam Padding (keeps the information set up)
– Special USB (which allows you to download your favorite song and motto)
– Instruction card
-Material (provides smooth surface)
– Work (labor)
– IT program (enables memory capture and product functionality)
-Design (displayable)
If we do a sales forecast and admit we will initially sell 100 units, we'll have the
following costs:
100* 50 (per unit)= 5000 $
6 u * 40 (per 6 units)= 240 $
We find out how many sets of 6 units are included in 100 units
100/6 = 16 (and we have 4 units)
Add 2 units
We estimate spending for 17 sets
Total: 17 * 240 = 4080 $
5000 -4080 = 920 $ (save if we o nly buy a set of 6 units)
We add the expense for the custom taxes, which is 4.2%
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4080 + 4.2% = 4251.4 $ ≈ 71847.9 lei
Risks
– The emergence of competitors on the market with a similar product
– High price for some categories of consumers
– Lack of special ists in the field
– In case of malfunction – the product can not be repaired
Income
According to market analyzes, the price of 39 $ ≈ 659 lei is affordable for the population
of the Republic of Moldova.
Note: this price includes custom duty 4.2%
Import 40 $ / unit.
Cusrtom duty 4.2% = $ 1.2
Selling 50 $
Unit profit = 50 $ -40 $ -1.2 $ = $ 8.8
8.8 $ ≈ 150 lei
Income from sales = Price per unit * Quantity sold
If we focus on the 100 units, then:
Income from sales = 50 $ * 100 = 5000 ≈ 84500 lei
Net profit = 880 $= 14872 lei
1 USD=16.9 lei (curs.md 21.01.18)
General description of the project
Domain: Industrial – commercial, based on nano -technologies
Essence of the project
Bringing a new and innovative product to market that will help us save time and st art the
day with good mood.
Project Direction
Our goal is to introduce this product on the market of the Republic of Moldova, the target
city being Chisinau, where approximately lives 23% of the population , according to the NBS.
What should be done to im plement the project
Making consumers aware of this product by:
– mass media
– social networking sites
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– leaflets
– radio: news / innovations
-Soft furniture for the bedroom
Social orientation of the project
– Decrease of the delay rate -> decrease of the p enalties -> increase of the productivity ->
increase of the income (within the jobs)
-Reduce the delay rate -> increase productivity -> increase the level of culture (within
schools / universities)
The main results of the successful implementation of the proje ct
The price of a product is $ 39, for purchasing 2 products, it is made a 10% discount and
15% discount on the purchase of 3 products.
Innovative element of the project
The project is innovative because it is a SMART alarm, it's digital, it has touch speakers
all combined into a compact rug, which you can easily set up with the help of the instructions. It
can function as an electronic balance (if you set this function)
3. Description of the product or service
Alarm / carpet – care can be easily used b y all family members.It is the best "friend" of
the students. There are interesting features that allow the loading of various pleasant songs, witty
quotes, motto. It can be helpful during the night, it is enough to press it and the display will turn
on and illuminate your room.
Marketing Plan
Potential customers
Population aged between 15 -65 years, representing 78.7% of the Chisinau population,
namely the active and school population, the students occupying 57% of the country's
population.
How to promote the product
OnLine, on social networks like Facebook and Odnoklassniki, a specialized store.
Geographic sales limits
The entire territory of the Republic of Moldova through delivery system.
Competitors
This is a competitor for many brands that have products with the same target, such as: Sonny,
Philips (with the largest sale in the MAXIMUM store), Vitek (PandaShop.md)
Advantages of the product:
-It's easy to use
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– There are special functions
– It's nice to touch
– It's useful
– It's innovative
– It does not take up much space
– Combines several functions (alarm, digital digits, light source)
Disadvantages of the product:
– It gets so dirty
– Can not be repaired (currently)
– It's just for a person ( it can not be used by several persons in the sa me time)
Level of demand on the market
After making a questionnaire at the State University of Moldova, we obtained the
following results:
72% want this product
28% do not want it
Estimated average price: 570lei (30% less than the proposed price)
Selling forecast
According to the questionnaire made by the students, we will focus on this group of
consumers, from where we can deduct a forecast of sales. According to NBS, the total number of
students in Chisinau is 117 thousand and the employment rate for ag es 15 -24 is 29%, so we will
have the following calculation:
1) 117 thousand * 72% = 84240 potential consumers
2) 84240 * 29% = 24430 will have the necessary resources to buy our product
3) 24430/12 = 2035 units per month
However, considering that these data can not be accurate and many factors could
influence this demand we will estimate at 1,000 units to minimize the risk of increasing stocks of
non-sold products.
Estimated costs to purchase these units will be
50 $ * 1000 = $ 50000
How to stimulate pr oduct sales
Sales promotion is done through the Facebook and Social Network and through the
official website, informational trainings.
In the implementation of the project, we have the following risks:
– Absence of investments
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– the absence of specialists in the field
– low demand
Analysis of the market and competitors
Possible risks and project outcomes
Type of risk Consequences Methods of Prevention
1) Appearance
of competitors
with similar
product 1) The need to
decrease the
price to maintain
market position
2) The tendency
of improvement – Using various techniques to attract consumers
– Implement creative ideas for product improvement
2) High price for
some consumer
categories Low product
demand -The introduction of various forms of discounts
-use discriminatory price method.
3) Absence of
specialists in the
field We cannot
provide product
repair services -Specialization of engineers in the given field
-Training IT staff
4) Defect – new
product its futility – Use of replaceable parts
-The ability to change the defective mat
5) Absence of
investors We cannot
implement the
project -Developing the right arguments for the success of the
project
Conclusions
We are in a world of new technologies that tend to make our work and the way we live
easier , this product is an element of a whole range of innovations that must be on the Moldovan
market and help us fight with our vices.
Its price is accessible, we have a large number of the consumers who want this product,
but there is a lack of financial resources – we tend to offer some promotions, discounts.
As a result of our feedback, we have come to the conclusion that the Smart Alarm wakes
up the interest of the population, so, it increases the probability of the success of the project.
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General conclusuion to the chapter
The projects are presuposing placing prototypes in only 1 of the “Moldcell”`s direct (own) shops
as to test the actual potencial of the innovative products sales and mark the grown numbers
obtained by this shop.
The project “S+P” will bring the firm an ammount of 1 106 400 lei , consuming 768 579,2 lei,
leading to a net profit of 337 820.2 lei.
The project “Smartalarm” was proven to be less risky but will bring less profit. The net profit of
the trial of the smart allarm would be just 14872 lei and will require the company only 71847.9
lei to obtain this money.
The biggest advantage of these products consists in the fact that “Moldcell” SA will be the only
one to sell this products. With the power of money and name of the company it would be easier
to rise the awareness of the product in order to maximize the ammount of sales and decrease the
cost of the products.
Besides that, the implementation of the products will rise the cash flow of the company, easying
the sit uation mentioned in Chapter 2.
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Bilbiografie
1) Ovidiu Nicolescu – Management (editia a III -a revizuita)
2) Earl and Hopwood – From management information to information management. The
Information Systems Environment . 1980 , North -Holland: Elsevier
3) Thompson, J. D., & Tuden, A. – Strategies in decision making. Comparative Studies in
Administration , 1959 .
4) Earl & Hopwood – From management information to information management. The
Information Systems Environment . North -Holland: Elsevier , 1980 .
5) Simon – The new science of management decision , 1977 .
6) Gorry & Scott -Morton – management , 1971 .
7) Earl, M. J., & Hopwood, A. G From management information to information management.
The Information Systems Environment . North -Holland: Elsevier , 1980.
8) Earl & Hopwood – From management information to information management. The
Information Systems Environment .
9) Brown & Vari, Brown – Towards a research agenda for prescriptive decision science: The
normative tempered by the descriptive. Acta Psychologica
10) Mason, R. O., & Mitroff, I. I. – A program for research on management information
systems. Management Science,19 , 475–487.
11) Feldman & March – Information in organizations as signal and symbol. Administrative
Science Quarterly, 26, 171–186.
12) Hiltunen, 2008 Hiltunen, E. – The future sign and its three dimensions. Futures, 40, 247–260.
13)Drucker, 1995 Drucker, P – Long -range planning: Challenge to management
science. Management Science, 5, 238–249.
14) Alter – A work system view of DSS in its fourth decade . Decision Support Systems,38 , 319–
327.
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15) Silver, M.- Decisional guidance for computer -based decision support . MIS Quarterly, 105–
122.
16) Schoemaker, P. J. – Experiments on decisions under risk: The expected utility hypothesis
17) Sage, A. P – Behavioral and organizational considerations in the design of information
systems and processes for planning and decision support . Systems, Man and Cybernetics, IEEE
Transactions on, 11, 640–678.
18) Pomerol, J.-C. – Artificial intelligence and human decision making . European Journal of
Operational Research, 99, 3–25.
19) Einhorn & Hogarth, – Behavioral decision theory: Processes of judgment and choice . Journal
of Accounting Research, 19(1), 1–31.
20) Newell & Simon – Human problem solving .
21) Hopkins and Brokaw – Customers matchmaking with math: how analytics beats
intuition . MIT Sloan Management Review, 52, 35.
22) Sage, A. P. – Behavioral and organizational considerations in the design of information
systems and processes for planning and decision support . Systems, Man and Cybernetics, IEEE
Transactions on, 11, 640–678.
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Management Review, 32, 33–54.
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Annotation
Theme actuality is imposed by a very underused and underestimated aspect of the managerial
activity – the decision -making process. Usually, almost all of the present firms of Republic of
Moldova are making the decisions spontaneously, or simply using a brainstorming technique
with the people occupying the related to the problem posts. In this work will be told about the
advantages of following a strictly structured process, which takes in consideration the aspects of
the environment reality, such as risks possible profits and losses that may occur, in order to
ensure an effective and positive follow -up of the decission, easily adapting to the nearest future.
The purpose of the work is to relatate about the ways a decision -making system may be
created/improved in the organizations, aswell as the what fie ld is needed to implement it and
successful exploit.
Tasks of the work:
1. Making clear what a decisional system is;
2. Understand the process of decisio -making;
3. Understand the requirements of a good -working decision -making system and how to meet
them;
4. Study the decision -making system in a concrete organization, with it`s impact over the
economico -financial situation;
5. Find the lacks and a method to improve the existing decision -making system at the studied
organization.
The subject of the research was “Moldcell” SA.
Methodology of investigation has varied, including observation, interview and implication in the
business processes of the subject of research – in the management field as in executive field.
Theoretical value is to understand the actual level of aplication of the management techniques in
big firms, with a good reputation and a long term of successful activity and find out the impact
they have over the firm.
Practical value is understand the quota of theory that is applied in big enterpri ses and the actual
mechanism by which the managerial processes work.
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The structure of the thesys consists of introductory part, 3 chapters , conclusion,
recommendations and appendixes.
97
Adnotare
Actualitatea temei este impuis ă de un aspect foarte subestimat al activității manageriale –
procesul decizional. Deobicei, aproape toate firmele actuale a Republicii Moldova iau deciziile
in mod spontan sau aplică doar tehnica de brainstorming, implicînd persoanele ce ocupă pozițiile
relatate la natura problemei întîlnite. În această lucrare va fi relatat despre avantajele aplicării
unui unui proces strict și structurat, care ia in vedere aspectele mediului in care activează firma ,
precum riscurile si pierderile posibile, cu scopul de a obți ne rezultate cît mai eficiente ale luarii
decizie, precum și sporirea adaptibilității firmei viitorului apropiat.
Scopul lucrării este de a relata despre metoda de creare/raționalizare a sistemului decizional in
organizație, precum și despre tehnici și met ode de adoptare a deciziilor mai eficiente pentru a
asigura exploatarea sistemului decizional mai eficientă.
Obiectivele tezei :
1. Definirea sistemului și procesului decizional.
2. Înțelegerea procesului decizional.
3. Înțelegerea necesităților unui sistem decizional eficient și modul de asigurare a acestor
necesități.
4. Studierea sistemului decizional într -o organizatție concretă.
5. Identificarea neajunsurilor și stabilirea metodei de îmunătățire a sistemului decizional in
intreprinderea analizată.
Subiectul studiului a fost “Moldcell” SA.
Metodologia investigației a variat, incluzînd observația, intervievarea și implicarea in procesul
de management și executiv al subiectului cercetării.
Valoarea practică a lucrării a fost identificarea cotei de teorie care este aplicată în întreprinderile
mari și mecanismului actual de lucru al procesului managerial.
Valoarea teoretică a lucrării este de a studia nivelul de aplicare a tehnicilor manageriale în
întreprinderile mari cu reputație bună și un termen l ung de activitate pe piața Republicii Moldova
și studierea gradului de influență a acestora asupra bunăstării firmei.
Structura tezei o constituie partea introductivă, 3 capitole, concluzia, recomandările și anexele.
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