Technology for making managerial decisions: requirements, methods and analysis

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Technology for the development and adoption of managerial decisions is critical for the long-term efficient operation of any enterprise. Indeed, the success and prosperity of the managed organizational structure depends on their quality and adequacy.

General information

In most cases, managers do not resort to consulting services. They make decisions on their own, taking all the risks. To increase the efficiency of business activities and ensure communication processes, decision-making technology is used. The implementation of a management decision should be carried out with the fulfillment of the requirements of optimality, legality, efficiency, specificity, simplicity of form and clarity of content. For control, it is desirable to have mechanisms of self-regulation. In particular, it is possible to ensure the presence of feedback in the field of management. Today, there is no single universal technology for the management decision-making process that can be used anywhere. This is due to the fact that eachThe leader has specific skills and approaches to problem solving. So, depending on the level of complexity of the decisions made, the number of stages and the decision-making process change. In addition, one should not forget about personal characteristics. After all, they contribute to various diagnostics of the causes of occurrence, as well as assessment of the severity of the management problem. But if the technology of the managerial decision-making process is nevertheless developed and applied, then this allows for the professional performance of functions and the achievement of goals. And rash and unreasonable decisions contribute to financial losses and bankruptcy of enterprises. Competitiveness, as well as the successful functioning and even development of an enterprise, depend on timeliness, rationality and efficiency.

Company management

Entrepreneurship has its own specifics of economic work. As a rule, it is accompanied by an increased risk. The technology for developing and making managerial decisions for entrepreneurs has a number of features. Consider a short list of them:

1. The concentration of management functions on one person, namely the leader.
2. The process of analysis, formation, adoption and implementation takes a very short period of time.
3. Leaders do not resort to the services of consulting companies. The decision is made independently. Therefore, they bear all the consequences and risks of making ill-considered and erroneoussolutions.
4. The owners of commercial structures are often also their leaders.

What does decision making technology look like? Is the implementation of a managerial decision after its development very different from other practices? In fact, it is a logically ordered sequence of stages, each of which performs a certain set of procedures. Their implementation allows you to choose the best solution to the existing problem situation. At the same time, an analysis of the internal and external environment, goals and selected criteria is carried out. The potential and prospects for the development of the organization are taken into account. But, as we remember, there is no single right recipe. Although we can talk about the main technologies for making managerial decisions that are used in this case. What do you mean?

Information Technology

Computer technology entered our lives only a few decades ago. But how could she transform her! It is difficult to imagine effective entrepreneurial activity and adequate management decisions for any small organization without information technology. Many communication processes are now based and provided on them. In addition, they allow you to act more quickly, develop and make decisions. When there are sharp changes in the market, the duration of the cycle is reduced, there is an unstable consumer demand, then it is important to have adequate data on which the strategy will be based andwork tactics. What can be cited as information technology? First of all, it is a telephone connection. With its help, you can quickly manage at the tactical level, contact the necessary specialist, and so on. Also, if you need to hold a meeting with several specialists at a considerable distance, you can use tele-, audio- and videoconferences. We should not forget about the possibilities of accounting, financial and management reporting. And also about the means of their formation. Now there is no need to sort through a large number of securities and / or look for total values. The introduction of information technology has made it possible to move this monotonous work to a computer, from which it is much easier to extract the necessary data. After all, there is no need to look for the necessary papers among various waste paper. In addition, it is possible to set the task of forming and displaying the necessary array of information on the screen, if it is not available. Fortunately, modern data processing systems have extremely wide functionality.

About management decision

What is it? In essence, this is a choice that a decision maker (DDM) must make in order to fulfill the tasks assigned to him by his job responsibilities. How can it be viewed? There are two main points:

1. Decision as the process of selecting a particular option from a number of available alternatives. As a selection criterion, one can choose the required efforts, risks, investments (cost, costs), time periods, the degree of progress towards the designatedgoals.
2. Decision as the result of choosing a certain option from a set of alternatives. This excludes the possibility to select more than one.

From this we can conclude that the decision is the choice of the best, according to the CPR, alternative from the available set, each representative of which can be implemented in practice and bring a certain final result. An analysis of the management decision-making technology allows us to say that the following sequence is optimal:

1. Developing and setting a goal.
2. Analysis of the existing situation based on available data.
3. Formation and justification of a set of performance criteria (efficiency) with subsequent assessment of the possible consequences when choosing a particular option.
4. Determine the optimal solution from the available set.
5. Approval and acceptance of the selected option.
6. Specification followed by bringing to the attention of the contractor for the purpose of implementation.

About stages

Requirements and management decision-making technology, in fact, are the basis of management. This is a specific process of activity that is continuously carried out at all levels of management. In the most general terms, it can be considered a combination of three stages:

1. Preparing a management decision. At this stage, the analysis of the existing situation is carried out, the external and internal environment of the enterprise is assessed, the search, collection and processing of the necessary information is carried out. In addition, attention is paid to the diagnosis andspecification of the problem to be solved.
2. Decision making. Based on the available information, the available solutions are being developed and evaluated, as well as the actions that are needed to implement them. A system of criteria is being created that will allow choosing the best approach to achieve the task.
3. Implementation of the solution. It implies the existence and implementation of a set of measures aimed at detailing and bringing to the attention of specific performers, monitoring their implementation, making the necessary adjustments and assessing the result.

Here, the basics of management decision-making technology are already there. But is it possible to somehow detail the process? Yes, for this it is necessary to divide into stages and outline the individual procedures that will be included in them. As a guide, you can take the diagram below.

Steps and procedures

In the considered model of technology for preparing and making managerial decisions, there are six separate components. They are stages. They include individual treatments:

1. Analysis of the problem situation. The first step is scheduled diagnostics. It is conducted to identify potential threats as well as existing problems. The symptoms of an unsatisfactory situation are identified and fixed, as well as the root of the problems. This may be a change in the external / internal environment or inadequate management. After that, the problem situation is formalized into a specific task so that it can be successfullyexecute.
2. Development of a management solution. The external / internal environment of the enterprise is analyzed. Goals are defined. Criteria for their achievement are being developed. Possible solutions are generated. They are being evaluated and approved. The best option is selected. After that, it is approved.
3. Implementation of a management decision. It is carried out by changing the parameters of the controlled system.
4. Control of the implementation of the solution. Execution is monitored by comparing the actual parameters with the planned ones.
5. Assessing the effectiveness of the decision. For this, the amount of additional profit received per unit of funds that were invested in development and implementation is used. Additionally, you can take control.
6. Improving the process of developing and implementing a management decision. The data on information preparation and the quality of the previous stages are analyzed. The toolkit for the development and implementation of management decisions is expanding.

About the quality aspect

Providing adequate technology is half the battle. It needs to be monitored to ensure that it is carried out. That is, it is necessary to provide a single mechanism that will maintain the integrity and consistency of the described procedures at each stage. This will increase the quality of performance and get more satisfactory results at the control stage. What else will allow you to get a more pleasant result? On qualityinfluence:

1. Proper statement (recognition) of problems.
2. Quality of information received (timeliness, relevance, reliability).
3. Value orientations and qualifications of CPR.

To improve overall efficiency, it is also necessary to pay attention to planning, accounting, analysis and control. That is, it is necessary to create a unified system for collecting, processing and summarizing information. If such data is transferred to those who make decisions, then the quality indicator of their work will improve. After all, decisions made on complete and reliable information are more effective and comprehensive than those that appear through intuition. How can you improve their quality? Follow these ten principles in your work:

1. Before getting into details, you should assess the problem as a whole.
2. Don't make a decision until all options have been considered.
3. Doubt.
4. It is necessary to evaluate the problem from several points of view.
5. Look for analogues or a model that will help you better understand the essence of the issue being addressed.
6. A lot of questions should be asked.
7. Don't be satisfied with the first solution that comes to mind.
8. Science should not be neglected.
9. It makes sense to listen to the experts.
10. Remember that issues are seen by people from their unique perspective.

About requirements

If an important issue is being resolved, what should be expected from the process? For example we haveinformation technologies for making managerial decisions. They need computers. But what about the decisions that are made in the human head? How to be in this case? To avoid various problems, management decisions must meet the following requirements:

1. Have a clear purpose. Otherwise, there is no need to talk about making informed rational decisions.
2. Be grounded. For the decision, there must be a quantitative / calculated basis, which explains the motive for choosing it from a number of others.
3. To have an addressee, as well as deadlines. That is, it is necessary to ensure that the decision is carried out by a certain person or unit. Also, do not forget about the time limit.
4. Don't be controversial. It is necessary to provide that the solution coincides with the requirements of internal and external circumstances. And also with the events that have taken place and what is planned.
5. Eligibility. That is, it is necessary that the decision had a base in the form of regulatory documents, orders and instructions from managers. At the same time, it is necessary to take into account their rights and obligations, as well as the employees who are selected as executors.
6. Efficiency. It is necessary that the decision be the best in terms of the expected outcome.
7. Specific. It should answer the questions of where, when and how to act.
8. Timeliness. It is necessary to make a decision when it can contribute to the achievement of the goal.
9. Completeness, brevity, clarity, clarity to the performer withoutadditional clarifications and clarifications.

This is the organization and technology of managerial decision-making that will maximize the result.

About Methods

This is the only aspect that has not yet been considered. It should be noted that the methods and technology of managerial decision-making, when combined, make it possible to obtain very accurate and reliable results. Although a high-class specialist is required for simultaneous use. By the way, there are a lot of methods. Therefore, only the most popular of them will be considered:

1. Game theory. This method is used to model the outcome of a decision under uncertainty. For example, if there are competitors.
2. Theory of queues. Also known as the optimal service model. Used to calculate the best number of channels for interacting with visitors and the quantitative need for them.
3. Inventory management models. Used to determine the required amount of resources and finished products in warehouses.
4. Linear programming model. Used to optimally allocate scarce resources when there are competing needs.
5. Decision tree. This is a model that is built in graphical form. In doing so, all the steps that can be taken are plotted and various alternatives are evaluated.
6. Simulation. It involves creating a simplified construction of the existing situation, making adjustments and evaluating the result with subsequent application in reality.
7. Economicanalysis. Combines methods for assessing economic benefits and costs. It can also be used to calculate the relative profitability of the enterprise. For example, to analyze the break-even point.
8. Payment matrix. This is the method of statistical decision theory. It is used if it is necessary to choose one of several options that are similar in results.
9. Forecasting. A method that is based on using past experience to apply it to building assumptions for the future.

Conclusion

Alas, it is difficult to cover everything with one theory within the framework of a small article. One could also talk about the target technologies for making managerial decisions that are used for individual tasks, give examples from real life or show how to calculate situations using the methods discussed above. But, alas, the size of the article is not enough. For these purposes, writing a book is more suitable. In addition, it would not be superfluous to simulate the operation of the technology according to the described stages and procedures. But if there is a mind and understanding of the material, then the theoretical base provided should be more than enough to have an idea of how and where to move. After all, you will not be full of knowledge without practice. Information received should always be reinforced if there is no desire to say goodbye to it.