Decision Making in Management

decision making in management

As we may already know, decision making and problem solving in management constitute the very core of business. Basically, key management decisions go a long way to shape the business even in the future.

Every day, leaders and managers are faced with situations where they have to make decisions. This is where decision making strategies in management come to light, as the business eventually become a product of the various decisions as made by its leaders.

Various decision making styles have been in play for the longest part of human existence, consequently, business professionals have had to find ways to make use of available decision making tools and techniques in management as a way of making efficient, more informed and thoughtful decisions, inspiring positive impact on the organizations goals, both short-and long-term.

 

Management Decision Making

 

Decision making in management entails choosing from a given set of alternatives, implementing resolutions or opinions that will lead in the achievement of set goals.

Decision making roles in management are often broken into bits and pieces. A lot of steps come into play when managers implement management and decision making strategies to achieve best results. A lot of businesses may even utilize the steps in decision making in management without even realizing it. A deeper understanding of best practices and approach in decision making in management will improve the effectiveness of your decisions and lead to a much quicker realization of business objectives.

Let us go further to understand what effective decision making in management entails.

 

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Effective Decision Making in Management

 

Every perceived action of a business executive is often a product or outcome of a decision. To say that much of what a manager does in business has to come to effect through decision making is merely stating the obvious. In fact, most persons today are of the viewpoint or opinion that a leader’s role in business is simply limited to decision making.

To effectively make far-reaching and effective decisions, leaders must firstly consider several alternatives, and only after this can they go further to set a course of action based on a thorough consideration of the effects that the chosen options will have on the set goals of the business.

To make effective decisions, leaders must do the following:

  • Identify the decision: This is an all important step of determining the nature of the decision to be made, and clearly defining it
  • Gather relevant information: You may work internally and externally to gather relevant information that cut across the problem. This will help you appreciate each choice more
  • Identify alternatives: There isn’t always on specific way of doing something. Gathering relevant alternatives will ensure selection of the most desirable choice.
  • Weigh the evidence: It is important to determine whether the choice which is made can solve the problem at hand.
  • Choose among alternatives: Once you have properly weighed each decision, a proper alternative can then be chosen. It may be possible to choose more than one at times.
  • Take action: You are now ready to implement the decision which you have made.
  • Review your decision: After certain period of time, it may be necessary to consider the choice you.ve made to know whether it had solved the problem or not.

Let us quickly run through various decision making styles in management and see what each portends for the business world.

 

Decision Making and Problem Solving in Management

 

Here, we are going to look at the various types and examples of decision making in management, and how they affect the outcomes of business decisions.

  • Cognitive Style

This style of decision making is greatly influenced by a plethora of external factors. It often takes a lot into consideration, including how a course of action will generally impact the business, as well as a comprehensive look at its effect on the business surroundings.

  • Psychological

This style of decision making in management stems from a broader desire, needs and preferences of the person on whose hands lies the power to make such decisions. In this case, only one individual may decide.

  • Normative Decision Making Style

The normative style in literal terms, hands power back to the groups or teams within a business/ organization. Here teams are advised to communicate and share knowledge and information as well as opinion regarding a matter before final decision can be made collectively.

 

Decision Making in Management Accounting

 

Judging from the countless decisions that management have to make daily, it becomes necessary to produce reports from available information on operations which will provide valuable insight into business performance. It is necessary for a business to be aware if it is making profit or acquiring losses. Thus, such calculations as profit margin and labor utilization can provide direction regarding the effectiveness of daily operation management decision making. If properly done, the idea of informed decision making in business management will lead to higher profitability and increased competitive advantage.

Several decision making tools and techniques in management exist. A proper implementation of these will in the long run, be the difference between failing and success. These tools hold insights on features which enable business leaders to make impartial and well-informed decisions.

Relying on implementing effective and far-reaching approaches to decision making in management that have been weighed, tried and tested, managers can make decisions that position the company or business for continuous improvement. Focus should be on leveraging intelligent analysis of information for better planning and decision making in management as opposed to making irrational and or emotionally clouded decisions.

 

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