Managerial Decision Making

Effective managers are tasked with making decisions ranging from large to small on a daily basis. An effective organization employs managers who are problem-solvers and who can make decisions constantly.

It is critical to first prioritize issues and problems based on the issues potential effect on the organization. Those that stand to have the greatest impact should be dealt with first, and all problems need to be addressed in a systematic way prior to a decision being made.

Because a first impression is just that, and does not necessarily reflect the entire situation, a manager must avoid jumping to conclusions. Collecting information from more than one source to avoid bias, and completely assessing all pertinent (and verifiable) information prior to rendering a decision is strongly recommended.

Collecting information in order to obtain a complete understanding of the issue is only the first step, however. Once the information is available, then it is wise to brainstorm different solutions and possible options in order to get more than one perspective. Such options can start out as wide-ranging, and then can be narrowed down to fit the scope of the problem.

Having identified a set of options and solutions, feedback and suggestions on them, along with alternatives, should be sought from consultations with others. For the most part, group decisions (particularly where the group contains people who the end decision will affect) are preferable to those made by individuals as a pool of knowledge, skills and experience can be drawn upon.

Tools, techniques and analysis methods (such as: Pareto Analysis; Paired Comparison Analysis; Grid Analysis; PMI; Six Thinking Hats; Starbursting; Decision Trees) can then be applied. These are not conclusive, but they do offer an objective and somewhat scientific approach to decision making. Theyre particularly useful when the decision-makers judgment is liable to be clouded by being too closely involved with the issue at hand.

Then comes the time to weigh the pros and cons of a decision. Which option or solution gives most to the organization whilst taking least from it? Few decisions will be as clear cut to hold no drawbacks. Negatives are acceptable though, so long as the positives sufficiently outweigh them.