Management Decision Making Essay

3359 Words14 Pages
Introduction Decision-making is the one managerial function at every level of the organization which directly affects and overlaps all other functions. It is self-evident that better management decision making and problem solving can greatly improve an organization's profits and goals. Any decision is a choice made between two or more possible alternative actions. Therefore, decision-making is the process of deliberation which leads to a final course of action. Less important decisions may sometimes be made intuitively--relying on hunches or gut feelings. However, more important decisions require a more rational, logical approach. Systematic decision-making requires the following steps: 1. Define the problem. 2. Collect information. 3. Generate alternative options. 4. Evaluate alternative options. 5. Select one option for implementation (make the decision). As a general rule, the most important decisions are those which will impact many people, those which impact on departmental mission or goals, and/or those which could potentially cause serious negative consequences. Thus, quite often such decisions are referred to as "high risk" decisions. A manager is judged by the results of the decisions he/she makes. Few make mostly wrong decisions. Effective leaders make many high-quality decisions; they seldom make mistakes and on the few occasions that they do, they learn from those errors. Inexperienced decision makers and managers who make poor and mediocre decisions, often rely upon their personal experiences and preferences, previous decisions, or upon what others have done (past practice) or are doing (imitation). While past experience and tradition may be an invaluable source of data for reference (assuming quality decisions were made), what happens when a new question or problem arises for which there is no precedent upon which to draw? Trial and error?
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