Question

How do manager's make decisions? Is it a logical process? Whats the criteria? What are the many steps to making a good decision? Give examples of how some famous managers had to decide in tough situations.

Answer 1

Managers make decisions constantly to solve organizational problems. Decision making is an ongoing process that does not stop until the manager finds a good solution to the proposed problem. Managers make a decision by considering the problem, finding alternatives, analyzing the available alternatives and choosing the best out of rest.

Yes, decision making by the managers is completely a logical process. Managers find a solution to a problem by investigating and thoroughly analyzing the problem. After analyzing the situation that requires an action, the manager makes a decision. Without having a problem or situation that requires an action to be conducted, it is useless to make a decision. There must be a goal and a predefined purpose for the decision-making process.

Following are some decision-making criteria that are undertaken by the managers:

1. Cost incurred
2. Ease of implementation of an idea
3. Level of risks
4. Saving in cost
5. Return on investments

Following are the steps of good decision making:

Step-1: It is necessary to have a fixed goal for decision making. if the manager wants to find the solution to a problem, it is of utmost importance to define the goal clearly. defining a goal clearly and specifically provides a vision to the manager to make a good decision.

Step-2: Investigate the problem and find several alternatives to solve the problem. For this step, gathering information must be an important thing to consider.

Step-3: Evaluating the alternatives and finding the consequences carefully and thoroughly.

Step-4: Choosing the best alternative among the rest and make the decision. Ignore those alternatives that are not up to the defined standard or criteria.

Step-5: Evaluate the strength of the decision taken by following up on the decision.

Example: A famous personality is Ian Wright who is the founder of British Business energy. The toughest decision made by him was to fire the best supplier who was offering the best deal to the company. The reason for firing such a good supplier despite a good offering was that the supplier was not providing anything that can be considered as competitive in the market. This was the tough decision that many managers have to take for the benefit of the company and its profitability.

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