Decision making is most important function of managers. In an organization leadership team makes long-term and strategic decisions after weighing both internal and external factors. Such as industry trends, economic swings, supply and demand, staff issues and liability are all considerations that leadership reviews. Once the team determines the impact of those factors, it makes decisions which it believes will benefit the organization in the long run. One main role of a manager is creating a plan to meet company goals and objectives. This involves allocating employee resources and delegating responsibilities, as well as setting realistic timelines and standards for completion.
A timeline is a chronological order of events. In most cases, it is a line with dates, events or actions. In most of the projects a Gantt chart timeline is the most popular and widespread type of timeline.
Types of decisions:
Strategic Decisions
Strategic decisions are the decisions that are concerned with whole environment in which the firm operates the entire resources and the people who form the company and the interface between the two. For example, buying warehouses for particular strategic business unit (SBU)
Routine Decisions
These are of repetitive in nature therefore they require relatively little consideration; e.g making purchase orders, sanctioning of different types of leave, increments in salary, etc. Managers in dealing with such issues of routine nature follow the established procedures.
Programmed Decisions
These are the decisions that are traditionally made using standard operating procedures (SOP) or other well-defined and documented methods. They are routine in type that deal with frequently occurring situations, such as requests for leaves of absence by employees, performance appraisal, deciding how many raw materials to order depending on anticipated sales and to be manufactured accordingly.
Non-Programmed Decisions
These are one-shot decisions which are handled by techniques such as judgment, intuition, and creativity. They are logical in nature which is approached to deal with extraordinary, unexpected, and unique problems. Managers take investigative problem-solving approaches in which logic, common sense and trial and error are used. These are rare and lack clear guidelines for reaching a solution. For example whether to acquire another firm, deciding to enter a foreign market with collaboration etc.
Policy Decisions
These inform the employees how to make choices in order to act in alignment with organizational purpose and goals. E.g Code of conduct, Attendance/vacation/time off policy, equal opportunity and non-discrimination policies, Workplace safety, Alcohol, drug-free workplace, smoking, cannabis policies, Whistle-blower policy, anti-harassment policy and privacy policy.
Operating Decisions
These decisions are determinations made in regard to the routine, on-going activities of an organization. Examples of operating decisions are: which customer orders to schedule first for production, which orders to keep pending, which components and raw materials to buy from which suppliers, scheduling production equipment for use etc.
Organizational Decisions
These decisions are broad in scope and long term in nature. Generally there are two types of decisions in an organization – organizational decisions and tactical decisions. Long term decisions set the direction for the entire organization, while tactical decisions are narrow in scope and short-term in nature. Example is setting up a new factory, replacing the plant and machinery.
Group Decisions
When an entire group does brainstorming for a purpose. This is also known as collaborative decision-making. In this situation individuals collectively make a choice from the alternatives. For example, groups tend to make decisions that are more extreme than those made by individual members. For example a group represents for some problems faced by them; change in timing, decision regarding salary hike, additional perks etc.
Committee decision making
Committees are assigned decision-making responsibility for particular projects or issues. These are decisions that are not taken lightly, and that require sufficient time for research and evaluation. An organization chooses committee members based on expertise in the subject, as well as representation across the organization.
Why decision making is an important function of managers?
It’s a shocking fact but according to multiple sources, on an average an adult makes about 35,000 decisions in a day. Young children make about 3,000 decisions each day. The decisions deviate from which dress to wear, what to eat for lunch, what to cook, whether to go in for a haircut, whether to go for voting, whether to continue sleeping, whether to say hello to someone on the road who is friendly or not so friendly etc, These are common decisions besides the serious issues on which we make decisions almost every moment in a day. However, there is no accuracy in each decision making of ours. For many of us decision making seems more of a challenge than it should be, for many of our decisions we rely on somebody’s opinions.
Decision-making is perhaps the most important component of a manager’s activities. It plays the most important role in the planning process. When the managers plan, they decide on many matters as what goals the organisation will pursue, what resources they will use, and who will perform each required task.
Leaders are responsible for establishing a process by which decisions are made. Leaders must determine at what level of the organizational decisions are made, how much participation and power employees must have and the best approach to making decisions.
Conclusion
Just as there are consequences for every action, there are also long-reaching consequences for business operation. Decisions can often be wrong; managers cannot afford to be myopic about the consequences. It is always better for managers to collect maximum information and make decision based on a sound footing. When decisions are made based on little information, they sound indecisive and can result into overwhelmed consequences.
Our ability to become great marketers, managers, leaders, and entrepreneurs depend on the fact that we are able to make poised and sound decisions on a regular and consistent basis. Timely decisions are pivotal for a business from designing a new product to sorting out accounting issues, our day-to-day routine works are developed with decisions. We cannot envisage successful leaders standing around appearing unclear and uncertain. Instead, we see them as people who are able to quickly arrive at their decisions and communicate the goals to others.
