Decision making in management: importance, types, process

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What are the factors that affect decision making?

There is a wide range of factors that affect or influence decision making. While it is difficult to make an exhaustive list of these factors, the following are the most important factors.

• Inclination It is a common factor that affects people when they make decisions. Everyone has their set of prejudices based on their experiences, perception. These biases are mostly subconscious.
• Emotions They are another important factor that influences decisions. The way it influences can vary from person to person.
• Information quality And punctuality can play an important role in decision making. To make good decisions, one must have access to reliable information that is updated.
• Time It is one of the most critical factors that affect decision making. Fast and impulsive decision -making may have long -range impacts. The doubt to make timely decisions can also weaken the position or lead to lost opportunities.
• Social pressure Like organizational culture, beliefs in the power of leadership, expert opinions, etc., can influence decisions even if they do not seem the best option.
• Risk tolerance It varies from person to person, while some may assume risks that will be reckless, others may be reluctant to take an opportunity.
• Securities systems It can also vary in different people, which makes them see the same information of a different light and boost decisions that prioritize better results for all interested parties.

Understanding all these factors and taking them into account would help make more informed decisions without falling prey to the many difficulties that affect the decision -making process.

Rational decision making versus intuitive decision making

Each decision -making style will have its strengths and limitations. Each decision maker will have its preference and use a little rational and intuitive approach to make decisions depending on the context. Let’s examine the merits of each approach and when they should be used.

One type of decision -making is not necessarily superior to the other. Each industry, profession and circumstance may demand a different type of decision making.

Example of decision -making process

Let’s see the decision -making process in management with examples.

1. Establish objectives

Establishing objectives is among the crucial decision -making steps in management. Without clear objectives, it may be difficult to make effective decisions that help the organization meet its objectives. Establishing objectives implies establishing specific objectives that must be achieved within a certain period of time.

For example, if you are the CEO of a new electronic commerce company with the expansion of your business, you want to hire the right employees for several roles. First, he would have to establish his goals regarding what parts of his business he would need to hire new people.

2. Identify the decision

The next important step in the decision -making process in management is to identify the problem that must be addressed. Once the problem has been identified, the manager will collect information on possible solutions. This may involve consulting others, investigate or execute simulations. After weighing the pros and cons of each option, the manager will choose the course of action that they believe is more likely to succeed.

For example, after establishing the objectives with respect to what parts of your business they need new recruits, you would have to identify the course of action with others to recruit employees ideal for various labor roles.

3. Collect the appropriate information

This information collection process is known as information collection. The different sources of information that managers can use include surveys, interviews, focal groups, observation and secondary data sources, such as articles and reports. After collecting this information, managers must analyze it to determine which option is the best.

For example, after identifying the course of action for new recruits, you, together with your team, have to collect adequate information about the various hiring trends and how to recruit ideal talents.

4. Identify alternatives

One of the most important aspects of the decision -making process is to identify the alternatives. Without knowing what your options are, it may be difficult to make an informed decision. There are several different ways of identifying alternatives, but some of the most common methods include brainstorming, research and consultation.

For example, after collecting appropriate information on how to recruit ideal talents, identify which alternatives can offer to attract talents. As can you offer remote work or a hybrid work model?

5. Weigh the evidence

When we define decision making in the administration, a key step in this process is known as ‘weighing evidence’. This simply means taking the time to consider all the information available before making a final decision. This may include things such as market research, financial data and even instinct. When taking the time to weigh the evidence, managers can make better informed decisions that are more likely to lead to success.

For example, after identifying which alternatives you can offer to attract new recruits, consider all the options to understand which would be the most profitable for your business. For this, you can take market research information, financial data and even instinct.

6. Choose among the alternatives

One of the most important decisions that a manager has to take is what alternative to choose. There are multiple ways of addressing this, as first considering all available alternatives, then evaluating each one against an explicit set of criteria. Finally, choosing an alternative on another could depend on other factors, such as political considerations and the influence of interested parties.

For example, after considering all alternatives and research on the hiring of new recruits, choose the alternative that is the most profitable for your business.

7. Take measures

There are many approaches to decision making, but one of the most popular is the “acting” approach. This approach involves taking decisive measures in response to a problem, without thinking too much or guessed. While this approach can lead to rapid results, it also entails the risk of making impulsive decisions that may not be the best for the company.

For example, after choosing the most profitable ways to hire new talents, take the course of action to search and interview people.

8. Check the decision

Finally, after making a decision, it is important to review the results and make the necessary adjustments.

For example, after hiring the new recruits, check the whole process to see where some changes can make so that the process is more efficient.

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Management decision -making styles

1. Psychological

Psychological decision -making styles tend to be more creative and flexible, since they allow instinct to play a role in the process. However, this style can also lead to impulsive decisions that are not well thought out.

2. Cognitive

Among the many decision -making styles, one of the most popular is the cognitive style. This implies making decisions based on logic and reasoning, instead of intuition or emotion. By using cognitive style, it is important to consider all the information available before reaching a conclusion. This can sometimes mean taking a long time to make a decision, but it also means that it is more likely to make a sensible decision.

3. Normative

Normative decision making in project management It is a decision -making style that is based on adherence to the established rules and procedures. This type of decision -making is often used in situations where there is little time for deliberation and bets are low.

Management decision -making techniques

1. SWOT analysis

A popular decision making, a step in management is known as ANALYSIS FODS. This implies identifying strengths, weaknesses, opportunities and threats associated with a particular decision. By taking into account all these factors, people can make informed and effective decisions.