Static and effectiveness point out theimportance of

Static effectiveness refers to management having consistency in their vision relating to theirbusiness activities and in how to accomplish said vision. A vision they will not deviate from,since they want their organization to be as effective as possible, which is not something youcan accomplish according to this perspective by changing. The dynamic effectivenessperspective is about challenging existing values and perspectives when new knowledge comesto hand. The new knowledge will be taken into consideration regarding the already existingvalues, which will launch a learning process that can end up with management altering theirvalues, and ultimately the company’s vision (Kuada, 2016).The above-mentioned different perspectives on efficiency and effectiveness point out theimportance of decision makers always being considerate with their decisions in respect to theorganizational resources, goals and visions, since it will determine whether the organizationalwill perform positively or not. This is done by identifying market opportunities in the externalenvironment in order to ensure the company’s sustained success and at the same time raise itsvalue over time. Furthermore to determine to which extend an organizing is performingpositively, it is also important to look beyond the organization itself and, and notice the roleof stakeholders and their expectations. Therefore, the business environment plays animportant part concerning both operational and strategic decisions made by management,since the environment has a significant impact on the organizations within that givenenvironment. Thus, the environment and how it affects the decision-making will be discussed(Kuada, 2016).Environment is characterized by uncertainty, which itself is defined by the absence ofinformation or knowledge to make a decision (Duncan, 1972; Jabnoun, et al., 2003). There arethree levels of uncertainty in an environment: low, moderate, and high uncertainty (Jabnoun,et al., 2003). The higher the uncertainty is, the higher is the risk, which is “defined as afunction of the probability of the desired outcome of a defined action” (Görling & Rehn,2008, p. 97). In an environment with low uncertainty, management has the knowledge andinformation at their disposal to make a decision, where the outcome can be predicted (Kuada,2016). Thus, management will be inclined to apply a rational approach in gathering andanalyzing all the information and knowledge available and choosing the best option. Moderateuncertainty in an environment signifies that there are either a lot of factors to take intoaccount, in order to make a decision or that the factors to be taken into account change6 of 37frequently, thus making the outcome prediction difficult, albeit not impossible (Daft, 2012).High uncertainty means that the outcome of a decision is unpredictable (Kuada, 2016).A company’s environment therefore has strong implications regarding which analyticalapproach the decision-makers should employ (Johnson, et al., 2014). For example,management will be inclined to apply a rational approach given low uncertainty. This meansgathering and analyzing all the information and knowledge available and choosing the bestoption and reducing risk to a minimum (López-Gamero, et al., 2011; Kuada, 2016). Thedecision will be both single and very decisive, since management knows how the organizationshould perform on an operational level in order to attain its goals focusing on maximizing theorganizations resources (Daft, 2012). The downside of a rational approach is that the processof mapping and analyzing all the possibilities is a very time-consuming process and willaffect the organizational efficiency in a negative way (Kuada, 2016). Furthermore, the rationalperspective does not take into account, that there are limits to efficiency both regarding limitsof human capacity and technological usage (Keh, et al., 2006). The limitations to the humancapacity in regard to the decision-making is referring to our limited cognitive capabilities,which in the rational perspective are assumed to be unlimited since management has to takeall information into account (Kuada, 2016). However even considering these downsides, in anenvironment of low uncertainty applying a rational approach is recommended (Fredrickson , 1989; Goll, 1997).If the company is in an environment of moderate uncertainty, the decision-making processmay be influenced by a high demand for information if the decision-maker applies a rationalapproach, as the information gathering will lay the foundation for risk assessment; howeverthe same downsides as the ones mentioned in the previous paragraph apply (Kuada, 2016).Another option to decision-making in a moderately uncertain environment is a moresubjective approach, which is based on human beliefs instead of statistical methodsconcerning the assessment of risk and probability of goal attainment. The decision-maker willbase his reasoning on past experiences and intuition, which allows for a very swift andadaptive decision-making process (Woiceshyn, 2009). The drawback by using a subjectiveapproach is that management can be exposed to error in judgment and cognitive biases suchas being overconfident or being reluctant to use what past experience has taught themregarding the present-day set of problems resulting in inferior decisions (Kuada, 2016). It isworth emphasizing that using a combination of both a rational and subjective approach is apossibility, which is mostly the case for decision-makers in a moderately uncertain7 of 37environment (Kuada, 2016). Because individuals do not process all information available -because of limited cognitive capabilities – it leads decision-makers to supplement the rationalapproach with a more non-rational approach, where they make use of intuition, rule of thumband past experiences (Woiceshyn, 2009; Johnson, et al., 2014; Kuada, 2016). A concept thatincorporates both a rational and a non-rational approach is Henry Mintzberg’s idea ofcombining deliberate strategy and emergent strategy to form a realized strategy (Johnson, etal., 2014). Management starts with an intentionally planned strategy process, which theorganization begins executing. But during the process something happens in the environmentwhich the company has to take into account concerning their intended strategy. Thisenvironmental impact is characterized as emergent strategy (Mintzberg & Waters, 1985).Finally, in a highly uncertain environment it is suggested to not apply a rational approachsince it is hard to assess risks (Fredrickson & Iaquinto, 1989). Managers will therefore tendtowards a more non-rational or subjective approach, where the decision-makers rely on thesame subjective decision-making processes as mentioned-above in the passage aboutuncertain environments (Kuada, 2016). The reason is, that managers need their decisions to beboth adaptive and flexible, in order be able to take changes in the environment into account(Fredrickson & Iaquinto, 1989; Goll, 1997). The criticism of this approach is similar to theabove-mentioned passage about the subjective approach.b) Critically examine the decision-making processes in Med24 since its establishment.Discuss the environmental characteristics influencing choices made by the founders andthe implications of their choices for the efficiency and effectiveness of the company’soperations.Med 24 is one of the leading companies in the area of online sales of health products inDenmark. The idea behind the company was born in Løkken back in 2003 when two friends,Nils and Kristian, developed a business idea to sell ovulation as well as pregnancy teststhrough a website. They named their company “Baby or Not” in order for the customers torelate the company to the offered products. Through the years “Baby or Not” evolved into thefounding of their new business to business company “Blue Medico ApS”, which Med24 is apart of. Nowadays Med24 is active in Denmark, Sweden and Norway. The company has agreat vision for the next 5 to 10 years, to become the largest online distributor of healthrelatedproducts and the largest health related e-shop in Denmark