Decision-making is one of the most important functions of a manager. Every manager has to routinely make decisions that can have drastic consequences. Because of the unpredictable nature of the effects of these decisions, managers must be very careful. They can always refer to some general guidelines for effective decision making for this purpose.
Decision Making Process
Decision-making is an indispensable part of management. In fact, some experts equate management itself with decision-making. This is because the entire process of management involves decisions, which makes them all-pervasive.
Managers have to take decisions routinely for long-term as well as short-term plans. In the short term, managers have to decide day-to-day activities involving other employees. On the other hand, long term decision-making involves policies and strategies to make the business grow.
Making effective decisions which do not require many changes and are easy to implement is difficult. However, managers can employ some general guidelines for effective decision making for this purpose.
Learn more about the Steps in Decision Making here in detail
Effective Decision Making
One of the best ways to gauge the performance of a manager depends on how he adapts to changing situations. Managers should be able to look at the big picture and also balance immediate challenges.
All important decisions must be successful as well as implementable in diverse situations. This is because changing decisions constantly leads to instability. Therefore, managers must consider applying all techniques of decision-making.
Guidelines for Effective Decision Making
The subject of management contains various guidelines for effective decision making. Managers must employ all of them in order to come up with decisions they can implement smoothly. Although they might not have to use all of these guidelines, they must definitely consider them.
The following are some such effective guidelines:
1) Multiple decentralized centres
Centralization of powers is always a hindrance in large organizations. This is because such business structures have people with diverse responsibilities functioning at various levels. In this case, it is inadvisable to hoard decision-making powers in a few hands at the top level.
This is why managers at all levels must have adequate decision-making powers. Furthermore, they must also be answerable to a centralized authority at the top. This makes decision-making quick as well as effective.
2) Distribution of workload
The responsibilities of decision-making must exist at all levels in reasonable proportions. If the top level of management keeps more powers with itself, its workload increases. This, in turn, makes it less efficient.
3) Effective communication
Apart from distribution of workload at all levels, there must be an effective communication system as well. Co-ordination between all levels makes work easier, efficient and consistent.
4) Advisory units
Each level of decision-making must have a team of advisory units. These units could comprise of staff members as well as outsiders in a limited capacity. The main responsibility of these units is to provide intelligent and creative expertise in decision-making.
5) A regulatory framework for decision making
This is one of the most important guidelines for effective decision making. There must always be several tools for regulating the process of decision-making.
For example, managers must frame effective rules, policies, goals, and procedures for this purpose. Furthermore, the management must ensure that they update this regulatory framework as per requirements. They should also communicate all changes to managers immediately.
6) Decision support systems
All levels of management must have effective decision support systems. These include information and control systems that make communication easier for managers. The management at all levels should use these systems to get logistical support for decision-making.
Questions on Effective Decision Making
Question: Fill in the blanks with missing words in the following statements.
(a) __________ of powers generally makes decision-making ineffective and slow to implement.
(b) __________ comprising of employees and outsiders must exist at all levels to facilitate intelligent decision-making.
(c) A __________ for decision making includes rules, guidelines, policies, procedures, etc.
Answers: (a) centralization (b) advisory units (c) regulatory framework