An essential deciding factor for any leaders and management is the way they make their decisions, and the people who lack this singular skill is simply not suitable for the leadership roles in this cutthroat competition of today’s world.
Decisions can range from quitesimple ones, like which ice-cream flavour to choose – chocolate or strawberry, tothe complicated ones that involve huge stake. It was truly the most difficult decision for Harry S. Trumantook when he decided to use the atomic bomb to end World War II.
Wrong decisions can bring in consequences,which forces us to live with it for a long time, while better decision-makers can change the consequences for the greater good. The entire decision-making process is dependent on the right information available to the right person at the right time.
The core of modern management training is to develop this decision-making skill, as it determines both the organisational and managerial activities. One decides to solve problems, so both decision-making and problem-solving are intertwined processes of evaluating situations, considering alternatives, making choices and following them up with required actions.
Throughout any business cycle, decisions play a crucial role in higher management levels to attain the ultimate business objective or to set the ball rolling. The overall performance of any organisation involving planning, organizing and control results from all kinds of decisions taken by the management.
The word ‘decision’ has its root in its Latin origin – de ciso that means ‘a cutting away to conclude’. The relative factor that helps people to conclude is to understand the goal one wants to achieve.
Decision-making Process – Factors and Steps
Factors that determine any decision-making processes are – Information, the time factor, and personality of the decision-maker, participation, acceptance and implementation, experience and the power to decide.
Decision-making process also involves certain steps like – defining the problem, identifying limiting factors, developing potential alternatives, choosing the best alternative after analysing other options, implement the decision and lastly to establish control and evaluate the situation. Decision-making cannot always be quantified completely as certain decisions are also based on human or rational intuitions and instincts.
Creating and Choosing Alternatives
The essence of all business decisions is to construct the relevant alternatives based on one’s experience and imagination; sensibly estimating the consequences – with the costs and benefits, the incomes and outgoes, for each of the choices, and finally calculating the alternative to have maximum profit.
Managers always like to make the best decision, though they often operate in an environment that does not provide ideal resources, so they need to choose to satisfice – the best possible decision with the information, resources and available time.
Brainstorming is said to be the best method to develop alternatives, where a group works together to generate ideas and alternative solutions to a problem.
Difficult decisions, those are considered have a major impact can be grouped into three categories – impact, problem complexity and context.
High Impact personal decisions are often job-related, whereas, at the corporate levels, mergers, acquisitions, bankruptcy may have a major impact on their thousands of workers.
The challenge of balancing the multiple, often conflicting objectives leads to the complexity of a Problem; as there will be always financial objectives to consider along with performance objectives.
The Context under which any decision is taken also adds to its difficulty. High-quality decisions often become difficult if taken under the pressure of time; that often forces the managers to take the short cuts without evaluating or considering the other alternatives; so that complex decision is simplified into absurdity.
Poor Decision-Making Process
Intuition as the primary decision negotiator is considered to be a symptom of a poor decision-making process. Others include – a tendency to consider only one alternative, failing to look at the bigger picture, frequently revisiting one’s decision, allowing strong personalities to drive decisions, ignoring uncertainties, overusing inexpert opinion and establishing a weak link between decision and implementation etc.
Development of Decision-Making Skills through Globsyn’s Beyond Education Program
Globsyn Business School nurtures these decision-making skills into its budding managers right from their initiation days. Students develop their decision-making goals through various carefully designed exercises to assess their desires systematically. The Beyond Education Program and its collaterals with KYLF, Serendipity, Embryon and others involve all the management students to wisely choose the right alternative, and not to make their decision any hit or miss game due to lack of enough time. Globsyn’s Management Program investigates the individual’s courage to see as they are, and allows them to admit the truth of reality way before the would-be managers hit the competition ground.
Hence, we can conclude that managerial decision-making is not a one-time event; it is part of a continuous journey of learning and improvement. Observe, think and experiment are the three critical steps, as the total outcome of managerial decisions can be well optimized by the continuous improvement process.