Managers often must make decisions quickly, using incomplete or ambiguous information, in risky or uncertain situations, and with high information costs. The decision-making process outlines steps that managers should follow in order to determine the best course of action in a given situation.
Companies like PUMA AG encounter numerous challenges to their profitability and survival. Review the actions taken by PUMA AG and relate them to the steps of the decision-making process model.
In 1993, PUMA AG was facing major threats. It had lost money for the past eight years and was facing imminent bankruptcy. In response, PUMA CEO Jochen Zeitz considered changing their strategy to focus more on style, colors, and lines of athletic shoes and less on performance capabilities. Other actions considered included reducing production costs and revising distribution in the United States. Zeitz and his top managers weighed the pros and cons of these ideas. As a result, PUMA created a new division, called “Sport Lifestyle,” and focused on creating experimental fashion products. For example, PUMA transformed cleated soccer shoes into trendy, colorful suede fashion sneakers. These new sneakers were sold in a variety of venues, such as Foot Locker, Barneys, and upscale boutiques and department stores. By shifting their strategy and focus, PUMA AG became the fourth-largest athletic apparel company worldwide.
Instructions : Place the actions that PUMA took to address the problems in the correct order. You must think about the decision-making process as your actions.
Rank the options below.
Choose among alternatives- Sport Lifestyle division
Assess alternatives- Weigh pros and cons
Generate alternatives- CEO considers possible actions
Facing bankruptcy- Recognize need for decision
Learn from feedback- Fourth-largest athletic apparel
Implement chosen alternative- sell fashion sneakers
