Methods for optimizing managerial decisions in management

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

The most popular management decision optimization methods include: math-based modeling, peer review, brainstorming, game theory.

All of the above methods can complement each other or work in combination. The choice depends entirely on the information. These methods should be approached prudently, because their correct implementation guarantees a positive result.

Characteristics of methods

Mathematical-based modeling is mainly used in those moments when digital information is used in control. This method allows you to give quantitative characteristics to the problems that have arisen in the course of work, and the ability to find a way to solve them.

This method optimizes the management decision using the following steps:

1. A problem is set, the solution of which is to be found.
2. Mathematical model under construction.
3. A solution is found forbuilt model.
4. Verification is carried out with the help of experiments and the solution obtained on its basis is subsequently verified.
5. Developing recommendations for using the result obtained.

The method of optimizing a management decision based on an expert's assessment is used at a time when the goal is difficult to solve and formulate mathematically. This method involves the consideration of complex issues at the decision-making stage by individuals who have knowledge and experience. The expert opinion is documented, with the recording of all decisions and results of the study. First of all, the report indicates data on who, where, when and why conducted the research. Only after that they describe the object, the method and the result that was obtained in the process of the work done. In conclusion, the conclusions and recommendations of experts are written.

The method of optimizing a management decision based on brainstorming is used at the moment when there is minimal information about the problem that has arisen and at the same time a short time frame is set for a solution. At such moments, they invite specialists who understand this. They take part in discussions and decision making. At such moments, the requirements must be strictly observed:

1. Speak in order and do not interrupt other experts.
2. Speak up only when there is something to offer.
3. No statement is criticized.
4. Any proposal must be fixed.

This approachallows you to solve the problem quickly enough. It includes the method of optimizing managerial decisions, a variation of which is the jury. To solve the problem, specialists from different fields and areas are involved. This allows you to get an alternative solution and new ideas.

The essence of the game is to influence the competitive environment. For example, if after using this method, the entrepreneur decided that after increasing the cost of goods and services, competitors would not do the same manipulation, then it is best not to use the idea. Since you can get into an awkward situation when fighting competitors.

Proposal development

The method of developing and optimizing a management decision is a way of performing operations. These methods are classified into groups:

• recognition;
• analysis;
• evaluation;
• measurement;
• calculation;
• simulation;
• choice;
• presentation.

There is a special group of methods for optimizing management decisions:

• search for necessary information;
• transmission;
• aggregation;
• structuring;
• data processing;
• save;
• distribution of powers.

Designing a solution involves using organization and implementation techniques. They are able to distribute duties, responsibilities, motivation and much more. Do not forget that the solution is not only options for further actions or formulas for behavior, it can solve the problem.

Dividing methods into groups

The set of methods is divided into individual and group. Methods for developing and optimizing management decisions are divided into two groups:

1. Intellectual.
2. Social activities.

Based on this, a matrix is built for the development of a management decision. With its help, you can streamline knowledge, make the right choice and improve the quality of management decisions.

During teamwork, in most cases, brainstorming, general discussion, conferences are used, and opinions are processed and problems are raised. Such work can be considered individual, but at the same time it is realized in a group, a team. With the help of a special commission, the received information is processed and analyzed.

Organizational work is carried out by the manager. In this case, questions on motivation, persuasion, control are submitted for discussion.

The variety of these methods allows you to combine them, combine them. All this will allow you to get a high quality decision.

Algorithm for making decisions

There are a large number of methods for making and optimizing management decisions. Despite this, they have a single algorithm of actions.

There are many problems to solve in the process of work: sales at a low level, constant turnover of employees, decrease in profits, negative customer attitudes and much more. Each manager, when looking for an effective way to solve a problem, relies on his experience and knowledge. Solving problems is much more difficult from the level of responsibility that a specialist bears.

The algorithm of methods for making and optimizing managerial decisions includes several stages:

1. Detailed description of the problem and all that worries. You can specify the work of the organization, staff members, results achieved.
2. Description of the desired result, set a clearly articulated goal. The more detailed the goal is described, the easier it will be to find a solution. With blurred information, the work will be difficult, since everyone will understand it in their own way, and give completely opposite solutions.
3. Collect all information related to the issue. It is necessary to describe what situation has arisen, what level of professionalism the employees have, in what conditions the work is carried out. After that, data analysis is to be carried out. If necessary, remove the excess.
4. Develop multiple options to solve the problem. In this case, the method of development and use is determined. Each goal needs its own method. If you choose the wrong method, then the plan will be incorrect.
5. Choose and implement the most optimal solution. It should detail who is responsible for what. To select a solution, a responsible person is involved, who will further divide tasks into parts and entrust their implementation to employees.
6. A separate connection must be provided, which will allowmake some changes and corrections. Based on the results of the work, the analysis of the result obtained is repeated, on the basis of which it can be decided whether the chosen method was effective.

Optimization models

Methods and models for optimizing management decisions is a process of processing data that can affect the result. The optimization process is quite expensive, but it justifies the result after solving the problem. Optimization methods include:

• analysis;
• forecast;
• model.

Along with the most popular methods and models for optimizing management decisions, there are basic ones. Includes:

1. Physical - research is carried out by reducing and increasing the described system.
2. Analog - the study uses an analog close to the real object.
3. Mathematical - use symbols to solve problems.

Common patterns include:

• game theory - predicts the activities and actions of competitors;
• queue theory - it determines the optimal service used for a certain number of channels;
• inventory management - determines the time frame for replenishment of resources and the amount in stock;
• programming - distributes resources in the presence of competitors, these include:
• scheduling production;
• creation of product rangegoods;
• technology used in production;
• production technology management;
• monitoring inventory used in the production process;
• drawing up organization plans on the calendar;
• development of a schedule for the shipment of finished products;
• search for a site for the construction of a production workshop;
• distribution of employees by department;
• movement of materials.

4. Imitation - used to solve situations that are as close to reality as possible.

5. Economic analysis - used to estimate costs.

6. Payment Matrix - Rewards;

7. Forecasting is based on experience.

Optimization

This is any problem that involves choosing a solution from among other options. Everyone tends to strive for the best choice, which is called optimal. The optimization of the managerial decision-making process can be defined as the ordering of decisions using a scale according to criteria.

Quality is usually understood as the compliance of all solution parameters. In this case, many options help to make a choice. Optimization contributes to the definition and selection of minimum and maximum criteria. Optimization always answers a series of questions:

• state of the problem after finding a solution for it;
• how long it will take to solve it, and what methods are used;
• what difficulties may arise, whatways to solve them;
• how everything will affect the social level.

Optimization of managerial decision-making is closely related to the effectiveness of the result.

What can influence the decision?

The entrepreneur's personal assessments are subjective. Before relying on personal assessments, you need to consider the direction of alternative action. It is always worth remembering that management decisions are based on a system of values that are different for each person. Decision making depends on it.

• Wednesday. Always, when making and optimizing management decisions, risks should be taken into account.
• Definiteness. Rarely enough does a leader have a clear idea of which alternatives to choose from.
• Risk. There is always a risk of not getting the desired result. This should also be taken into account.
• Uncertainty. In this case, the decision to be made cannot be estimated in advance.

Each leader perceives problems in his own way. All this can lead to conflicts. Due to the heavy workload, an entrepreneur may not notice the prospects that open up before him.

Delegation process

Delegation is the choice of a responsible person and the transfer of part of the tasks to be solved by him. These powers can also be transferred when choosing methods, preparing and optimizing management decisions. Powers should be transferred not to a person, but to a position,which he occupies. All kinds of powers can be divided:

1. Administrative. Decisions are made by the person who is entrusted to bear responsibility and solve the problem. There are two varieties. Linear - there must be a direct position between the employee and the manager. Functional - with indirect connection.
2. Recommendatory - in this case, advice is given to employees or an entrepreneur.
3. Coordination - joint decision-making.

Delegation of authority is required in the following cases:

1. The leader is unable to complete the entire list of tasks on his own.
2. The leader takes on only those tasks that the employees of the organization are unable to perform.
3. Delegation helps employees get into the life of the organization. This contributes to the development of staff.
4. Everyone has the right to make mistakes and risks, as well as to make their own decisions and achieve results in their work.

Obligations of employees are completely connected with responsibility. When choosing methods for optimizing a management decision in management, responsibility can be both general and individual.

Classification of management decisions

Optimization and effectiveness of management decisions affect the success of an organization. In this regard, each decision under consideration must be justified and taken within the required period of time, and most importantly, be appropriate to the situation. All managerial tasks can be classified according to a number of features.

According to the characteristicavailable information:

• specialist chooses a solution, the result of which is known in advance, or he is sure of the correctness of his choice;
• when there are risks, all work is carried out relying on luck;
• information is incomplete, making it difficult to determine the success of the selected option.

Depending on the choice of solution:

1. Programmed. When making a decision, the goal is clear, the essence of the problem is known, and the information is presented in full. When solving such problems, standard rules and solutions are used.
2. Not programmed. They are encountered in new established situations.

By the way to solve the problem:

1. Based on intuition. The choice is made without regard to risks. Such decisions can be made by employees with extensive experience.
2. Relying on judgment. The basis should be the experience and level of knowledge in this area of the problem. Often choose an alternative solution.
3. Combined method. In such cases experience, knowledge, intuition, scientific approach are used.

Number of decisions made:

• accidentally, once;
• with periodic repetition.

Depending on the area in which the problem occurred:

• within production;
• in supply;
• in funding.

According to the form used:

• decisions are made independently, without discussion with other team members;
• settlement of the problem falls onthe shoulders of a specialist, but at the same time, her decision is formulated by the entrepreneur, who is responsible;
• the decision is made in the team by voting and the responsibility in this case falls on the shoulders of all those present.

Depending on the involvement of authorities, to make a decision:

• top level;
• medium;
• low.

Dividing the process into items:

• use of principle aspects in top management;
• execution is carried out by lower-level specialists.

According to the method of solving the task:

• assessment of the information received;
• establishing structure in management;
• making the right decision.

By reach:

• common to the entire staff;
• having a narrow focus.

In this variant, the management decision optimization methods are briefly described above.

What requirements should solutions meet?

The choice of a solution is considered to be of high quality when it meets certain requirements:

• the minimum number of changes was made;
• the decision was made based on true information, taking into account all the trends of further development;
• all decisions will be made by the person who has the authority to do so;
• chosen settlement methods do not contradict anything;
• conclusions were taken on time, without delay,which can reduce efficiency;
• all information, requirements and goals are formulated specifically;
• the authority of the person who makes the decision corresponds to his responsibility;
• the decision made fully meets the requirements of the management;
• effective solution found at minimal cost;
• all ways to resolve the problem that arose were developed and adopted based on the capabilities of the organization.

Subject to all these points, you can count on the effectiveness of the decision. It should also be remembered that the correct and objective division into groups with further optimization of their work is an important condition on the way to high efficiency.