Decision Making Essay

Managers transport arrangings by the ratiocinations they make on a daily basis. The quality of these determinations, to a smaller or great degree, impacts the success or failure of an organization. Managers encounter challenges and opportunities e genuinely day. Some situations require actions that ar very unbiased opposites, not so simple. Some decisions need to be made right away, while others take a long period of season to be made. Decision qualification can be challenging, and its crucial we understand why.In this paper, we willing cover the main characteristics of conduce offrial decisions, the coifs of decision reservation, and the tools a director has to give efficient decision making in a challenging and ambiguous contrive environment. Characteristics of Managerial Decisions construction For most r turn outine decisions, at that place is a determined procedure, or structure, that protagonists managers solve a problem. If its a routine problem, wheref ore they bear standard responses. In these situations, managers only have to implement precedently stated solutions, from past experiences in the organization. Unfortunately, not all decisions be programmed.New problems arise all the time in an organization, and thats when managers have to get creative to solve them. Past experience helps, so does intuition, but the decision maker, in this case, has to create, or rely on a method for making the decision. In this case, theres no standard response. Un sure thing and Risk As Schermerhorn, Hunt, & Osborn (1994) point out, problem solving decisions in organizations atomic number 18 typically made under three polar conditions or environments certainty, risk, and uncertainty. When information is sufficient, and answers of decisions are predictable, you are functional in an environment of certainty.However, for most alpha decisions, uncertainty is to be expected. Uncertainty exists when a manager doesnt have enough information to a ssign probabilities to the consequences of different possible decisions. A manager skill have a good guess, or opinion, but doesnt last for sure if something will or wont happen. Whenever theres uncertainty, and something to lose, then theres risk. Risk isnt a drear thing its exactly the fact that comes with any managerial decision. Choosing one alternative over other can imply losing time, or money, so every decision entails risk. Managers have to be aware that with their decisions they manage risk.With good planning and problem resolution, risk can be minimized and controlled. Contending Interests J. Davids (2012) talks about decisions that alter people with contending interests. An event of this is a CFO who argues in favor of increasing long-term debt to finance a purchase. On the other hand, the CEO wants to minimize long-term debt and find the funds somewhere else. In other example, a marketing department wants more product lines to sell, the engineers want higher qual ity of products, and the production manager wants less variety of products to lower costs.In these situations, its up to the decision maker to fashion a workable decision that reflects an appreciation of all these antagonizing point of views. If a key players perspective isnt taken into consideration, and the manager pushes forward in the decision process, the outcomes will probably not adjoin the decision makers plans. There are different approaches to managing appointment of multiple players that well touch on a post later. Stages of Decision Making Situation The first step in the decision making process is sagacious the situation. This means, recognizing a problematic situation that exists, and must be fixed.This usually implies comparing things the way they are now, to what they should be. An example of this is comparing the actual expenses to the budgeted expenses. Another example is looking at this quarters sales, and comparing them to the previous quarter. The problem th at needs to be solved is usually an opportunity that managers exitk to take advantage of. Bowen, Lewicki, sign, Hall (1997) present an interesting approach of looking at a problem. Its a technique referred to as framing or reframing. There are four essential perspectives of organization and management theory that help us define a situation.* Structural.This perspective deals with the activities, functions assignments, tasks and so forth. Its basically who does what and who reports to whom. * Human. This point of view looks at issues of how people and organizations relate, how organizations satisfy peoples needs, provide meaningful work, productivity, and relationships in the organization. * Political. This frame of mind looks at the organization as a system with shifting bases of power, and conflicts between different groups fighting for limited resources. * Symbolic. The symbolical frame references the culture of the organization, made up by ceremonies, rites, stories, and so on. When dealing with a problem challenging to resolve, the manager can look at it, and use these different vantage points. This will help see the problem from a new perspective, and define the situation with a different understanding, and meaning of the problem. Options Bateman and Snell (2011) refer to this stage in the decision making process, as generating and evaluating alternative solutions. What they mean by this is, once the problem is defined, the manager, or decision maker, has to develop different courses of action aimed at solving the problem. Solutions might be found by using similar tactics used in previous problems.Custom made solutions are the other option. These take creativity and probably more resources. This step is key in the decision making process. legion(predicate) an(prenominal) times managers dont take the time to brainstorm and come up with alternatives. In a hypothetical situation where the decision maker is trying to improve the organizations bottom line, there are many options. You can add prices to improve margin, advertise your products quality to increase sales, drop prices to increase sales, open new service lines that will give you higher participation in the market, just to piss a fewer.The point is its important for the manager to take his time and consider all the options. one time managers have different options, they have to evaluate them, and come up with the best one. The best way of evaluating the options is standard the consequences of the different alternatives. Measures such as lower costs, higher market share, bigger bottom line, employee satisfaction, customer satisfaction, just to name a few. Ethical aspects of decision making should also be considered in this step. Richard Ritti and Steve Levy (2010) liquify what we previously mentioned about certainty, risk, and uncertainty, with alternative decisions.We can have an alternative solution that implies increasing production of a service line by 15%, but base d on the uncertainty of the environment, we have a decrease in the demand by 20%. This, in retrospect would be a no-good choice. What I mean by this is, not all results can be predicted with perfect precision. In an uncertain environment, what decision makers have to consider, is creating contingency plans. These are plans that will be implemented if the future develops differently than what expected. fill Once youve generated different options, and evaluated them, its time to choose which one is best.The manager must have an emphatic attitude, and not over think the decision. Once the decision maker has all the information hes going to have, he just has to take the leap and make the decision. Bateman and Snell (2011) bring in a few interesting concepts to this decision making step. These steps are maximizing, satisficing, and optimizing. * Maximizing Maximize means, to make the most out of something, in this case, the decision. Maximizing requires looking carefully for a complet e variety of alternatives, evaluating them, and then choosing the best. Maximizing is the erupt strategy for important decisions.Managers that are maximizers, plan systematically in solving problems, and their high expectations of quality drives them to accomplish great results. * Satisficing Satisficing is choosing the first satisfactory option, rather than looking for the optimal decision alternative. This concept was originally referred to by Herbert Simon (1947). He stated Most human decision making, whether individual or organizational, is concerned with the discovery and survival of the fittest of satisfactory alternatives only in exceptional cases is it concerned with the discovery and selection of optimal decisions. When managers make decisions, many times they are facing limitations, such as time barriers, unavailability of information, and other situations that make purpose the optimal option impossible. When the decision isnt of great importance, satisficing could be the optimal approach. * Optimizing Managers have to balance their decisions. Since there are contending interests in many of the important decisions in the organization, managers have to find an alternative that meets multiple criteria, and achieves the organizations goals.ActOnce the problem has been recognized, alternatives generated and evaluated, and the choice has been made, someone has to act. Also known as the carrying out process, managers have to plan it vigilantly. Sometimes theres a disconnect between what was planned, and what is implemented. The people refer in the process assume things are just magically going to occur. This isnt the case, so its up to the manager to ensure things are taking shape. Good communication is essential in this death penalty process, especially since this is when all the diversify happens.People arent naturally comfortable with change, so the manager has to be clear with the steps that have to take place. The manager must manage the chron ological order in which things have to happen and delegate the individuals responsible for each task. He must ensure everyone understands their role, and knows what the final outcome should look the like. The buy-in from the different players in the organization, when implementing decisions that cause change, will dictate the outcome of the implementation stage.If needs were cut when making the decision, or if the paths of communication havent been fluid in the process, it will be very hard to implement change effectively. The manager must take these things into consideration if he wants to avoid potentiality problems that arise in this step of the process. Evaluate Evaluating the decision is the last step in the decision making process. Its time for the results to determine whether the managers choice is having the effect it was intended to have. For this stage to be successful, there has to be measurable results they must be quantifiable.For an adequate evaluation of the decisi on, a validating appliance collects information and compares it to an expected value. That validating mechanism can be set and developed even in the first place the solution to the problem is determined. If the decision made proves to be effective, and the results show that the goals were met, then this decision could serve another(prenominal) purpose elsewhere in the organization. The positive feedback will be welcomed by the manager, and reinforce the decision making process. If the results demonstrate negative results, then itll take some good analysis to see where things have done for(p) wrong.Things might have gone wrong in any of the previous stages. Itll take brainstorming, and hunting expedition to assess what things need to happen to put things on the right track. Participation in Decision Making As Bowen et al. (1997) point out, most changes in organizations not only require technical modifications, but alterations in the work and social satisfactions of the employees. This makes the challenge of implementing change even greater. Its not only important that the new methods are efficient they must also be accepted by the employees who will be implementing these changes.In this context, managing the participation of the employees in making a decision plays an important role. There are different approaches when making decisions that entail change. They can be grouped into different variants of domineering decisions, mutual problem solving, and consultative decisions. In the authoritative decision alternative, the manager makes the decision alone. Then he puts together arguments and rational information to show the employees the advantages of change. In the mutual problem solving approach, the manager shares the problem with his employees, and the group works together to come up with a final decision.The consultative approach is a middle ground the manager shares the problem with the group, obtains ideas and suggestions, and then makes a decision t hat may or may not reflect the employees contribution. There are advantages and disadvantages in making group decisions. The biggest one is that the acceptance of participants is high, mainly because theyve had an opportunity to give their opinion. They feel like theyve had a say in the new process, so theyll naturally acquit it. Its also a huge advantage in the implementation stage, because the employees understand what management is trying to achieve.Many times the subordinates bring knowledge and experience that even the manager might not have. Its the employees who work in the details, and they might have good input in solving problems. One of the disadvantages of group decision making is the time it takes. A lot of time can be wasted meeting in groups to come up with good ideas. Another negative aspect is that groups tend to make riskier decisions because the indebtedness doesnt fall on just one person. In the same sense, group embers might not put that much effort into think ing of all the ramifications of their decisions, because they think someone else is probably thinking of that already.The main takeaway from participation in decision making is that it really depends on the situation, and the problem being solved. The challenge for the manager is to know when he should employ each of the decision making approaches according to the situation. A cleverness manager will know how to use these managing tools to make decisions that are not only efficient, but will also have the support and buy-in from the employees.Conclusion A good manager will assess each situation and find opportunities where change can be made always looking for the organizations best interest. When making important decisions, the manager will see the type of environment hes in, if theres certainty or not, and always account for the contending interests his decisions will undoubtedly face. A wise decision maker will recognize a situation that requires an intervention on his behalf. H e will generate and evaluate different options, and apply the concepts of maximizing, satisficing, and optimizing to make the best decision.Not only does the manager choose he acts. He takes responsibility and accountability for his choices, and makes sure theres follow through in the implementation stage of the process. The decision maker will then evaluate the results, to validate that his decisions are having the results that were intended. If not, hell go back to the outline board. Organizations live and die by the decisions made by managers, and to the extent that they can define problems, and make smart choices. Good decision making is found at the heart of all successful businesses.