Importance of Managerial Decision Making
Essay Preview: Importance of Managerial Decision Making
Report this essay
Being an effective decision maker as a manager is more than understanding the models that managers use to make decisions. Discuss showing you are aware of the importance of managerial decision making and the significant issues, which managers need to understand to be, able to make effective managerial decisions.Table of Contents PagesIntroduction 3-4 1.1 Research aim 4The objective 4Define decision making 5-6 2.1 Importance of managerial decision making 7 2.2 Importance of managerial decision making 8 2.3 Steps in the decision making process 9-10 2.4 Decision making models 11-12 2.5 Important attributes managers need to pay attention when making decisions 13Conclusion 14 1. IntroductionA manager is a person who does the planning, organizing, leading & controlling of the business. The manager has to be effective & efficient when they are making managerial decisions in order to achieve organizational goals & objectives. The effective decision maker the manager has three managerial skills. Conceptual skills, Human skills & technical skills. Conceptual skills refers to the managers ability to think, process information & plan. Top level managers require these skills when making organizational decisions. Human skill is the ability to work with & through other people to make decisions effectively as a group member. All level managers require this skill. Technical skill is where specialized knowledge, analytical ability & the competent use of tools & techniques in a specific subject area. Front line managers require these skills in order to make day to day operational decisions.
When considering the managers decision making styles in the present it has changed compared to the past. In the early stages employees did not want to take any responsibilities by making organizational decisions. They wanted the top managers to make the decisions. But in the modern world it has changed. Managers in every level want to make decisions & they like to contribute in different ways for the success of the company. Then only the employees feel motivated. But in the past generations this was not the idea. According to F.W. Taylor’s scientific management principle 4 “Establish a fair or acceptable level of performance for a task, & then develop a pay system that provides a reward for performance above the acceptable level.” (Jones George, 2003,page 44) Which means people are only motivated for money. But in the 19th century this idea has changed. According to Hawthrone studies “ Managers attitudes towards their employees affect the level of performance”. (Jones George, 2003,page 56)Moreover when managers make decisions they should consider about the environment. Internal environment as well as the external environment. Internal environment consist of elements that are within the boundaries of the organization. External environment consist of elements outside the boundaries of the organization. The organization does not have direct control over the external environment, but still this can influence the business. Also managers have to make ethical decisions for the success of the business. It is not easy to make ethical decisions as it is difficult to identify the right & the wrong. Also it is tuff because it has two sides, when some parts receive a benefit other parts will receive a negative impact. When making a decision it should be profitable for the business as well as it should not harm the society.1.1 Research aimAim of this research is to discuss & determine the importance of managerial decision making to achieve the future goals & objectives of the business entity. Also to identify the main elements which managers need to understand to make effective managerial decisions to survive in the business in the future.1.2 The objectiveIn order to achieve the above aims the following objectives are set.Define what is decision makingIdentifying the importance of effective management decision making to the organizationIdentify the type of decisions that managers makeWhat are the 6 steps involvedIdentify the three managerial decision making modelsIdentify other important attributes that managers need to pay attention when making effective decisions. 2.0 Define decision making Decision making means “the thought process of selecting a logical choice from the available options”.(