Management decisions are considered as the main type of management work, a set of interconnected, purposeful and logically consistent management actions that ensure the implementation of management tasks.
In each organization, the practice of developing and making management decisions has its own characteristics, determined by the nature and specifics of the activity, its structure, internal culture, and so on. However, there is a general technology for the decision-making process. It is used in any organization and goes through 3 stages:
This control does not provide the information and resources necessary to implement strategic actions. The strategic ability to determine priorities, allocate resources, set goals to be achieved, and behavior aimed at achieving them is based on a variety of complex systems information and management, not only on financial, accounting and technical aspects but also market, competition, medium and long term resources and socio-political reality.
Secondly, it means internalizing strategic decisions, the choices that an entrepreneur must make in the context of an evolving economic and social environment and taking into account the resources available to him. Strategic decisions are subject to change and tend to change the balance and change the conditions for its continuation. The strategic capabilities of companies depend on the breadth and quality of the management system. Management is not based solely on accounting and financial instruments, but on the strategic process and all the information it produces.
1. Preparing a solution. At this stage, a situation analysis is carried out, including search, collection and processing of information, problems that require solutions are identified and formulated.
2.Decision making. The development and evaluation of alternative solutions and courses of action, the selection of criteria for choosing the optimal solution, the selection and adoption of the best solution are carried out.
Strategic information, which often focuses on competitive positions and technological developments, must be available quickly, in an adequate and flexible form, and must provide orders of magnitude rather than exact values. Accounting and financial information must be accurate, strictly developed in accordance with standardized formal schemes and integrated with technical factors.
The competence and behavior of the management team is a key factor in the quality of the strategic process; therefore, human resource management and development is systematically ensured. Both the excellent and technical quality of the methods, only their efficient use personnel and managers guarantee success.
3.Implementation of the solution. Measures are taken to specify the decision and bring it to the attention of the executors, the progress of its implementation is monitored, the necessary adjustments are made, and the result obtained from the implementation of the decision is assessed.
Stages of making a rational decision:
1. Diagnosis of the problem. The core element of every decision-making process is the problem, which is always associated with a set of conditions or factors that create a certain situation influencing the activities of the organization. A problem is a situation when the set goals are not achieved. A problem can be viewed as a potential opportunity (for example, an active way to improve work efficiency). The first phase of problem diagnosis is awareness and identification of the causes of difficulties or existing opportunities (usually these reasons are low profits, sales, productivity and quality, high costs, numerous conflicts in the organization and high staff turnover).
Strategic potential implies that the main elements that make it up are interconnected and form a system. In this perspective, strategic potential will largely depend on the quality of the relationships of the elements that make it up.
Modern management will have to deal more and more with this interdependence between activities and the various elements of the enterprise, and will need to structure increasingly complex assemblages. This requires efforts to analyze it to facilitate this structuring, as well as efforts to integrate it into a global system based on common guiding principles and joint strategies. The planning process is part of this strategy: it aims to improve the overall consistency of actions and decisions.
Example: Excessive costs and low profits are often inseparable.
To identify the causes of the problem, it is necessary to collect and analyze the required internal and external information.
2.Formulation of restrictions and decision criteria. When a manager diagnoses a problem in order to make a decision, he must evaluate real opportunities organization, determine the essence of the limitations and only then identify alternatives. Limits vary and depend on the situation and individual leaders.
In the context of organized systems, the problem of complexity has several aspects. In general, the complexity of modern organized systems is associated with the network structure of information flows, resource flows and physical flows, with multipolar decision-making systems with differentiated skills and multiple goals. The existence of these networks is one of the elements that has led to the introduction of an intermediate level of decision-making and coordination between the overall organizational level of the company and the technological-operational level at which operations are carried out. The most important thing in all modern organized systems is often called the functional or system level.
General restrictions:
Lack of funds;
Insufficient number of employees with the required qualifications and experience;
Inability to purchase resources at reasonable prices;
Need for new technologies (expensive technology);
Intense competition;
Laws and ethical considerations;
Limits of manager's authority.
In addition to the constraints, the manager must define the standards by which alternatives will be evaluated, these are commonly called decision criteria.
Complexity is usually not proportional to the degree of behavior and data inadequacy; While, in fact, in a completely random system it is impossible to predict the behavior of each element of the system, it is possible on a statistical basis to predict the behavior of the corresponding units and establish rules for monitoring and optimizing performance. In other words, a random system is not necessarily complex: what can be done is usually faced with aggregated tools, often relatively simple ones, that cannot be done without solution problems.
Example: choosing a bread supplier. The cost criterion is no more than 10 rubles; cost-effectiveness criterion – transport costs no more than 50 rubles; machine capacity criterion; quality criterion.
3.Identification of alternatives. The third stage is the formulation of a set of alternatives. Choose a solution that will solve the problem. An in-depth analysis of each acceptable solution option is required. If we return to our example, you are now faced with choosing several suppliers that you think meet your criteria. Having selected alternatives, it is necessary to evaluate them.
In fact, the most difficult problems to solve are those where the behavior is not at all random, but in which a large number of factors interact with various types interactions in determining the behavior of the entire system. The classification of systems, organized according to their complex characteristics, and the study of exact and approximate methods for determining the actions to be taken to achieve set goals, are among the central problems of decision science and management.
4.Evaluation of alternatives:
The advantages and disadvantages of each option and possible overall consequences are determined.
Each alternative is compared with a standard. If any of them cannot satisfy one or more of the criteria you have established, it can no longer be considered as a realistic alternative.
In business, profit is a constant need and the highest priority, so decisions can be expressed in monetary terms and in the form of an estimate of their impact on profit. When evaluating possible alternatives, it is important to predict the outcome for the future.
The first feature is the multiplicity of entities and the difficulty of combining sufficiently characterized aggregates. In fact, it is sometimes difficult to recognize in a particular system the characteristics that make it a particular entity. Navigating through space and time through organized systems of varying nature and characteristics without orientation guidance is a difficult and unpleasant task. Moreover, in most cases, classification must take into account not only the characteristics of the analyzed object, but also the environment in which the object evolves.
5.Choice of alternative. The manager chooses the alternative with the most favorable consequences, that is, the optimal solution. The decision made is formalized in the form of a document or oral order: order, protocol, resolution, act, instruction.
6.Implementation decision taken. Real value management decision becomes obvious only after its implementation. The level of effectiveness of implementing a management decision will increase if it is recognized by those whom it affects. It is necessary to convince those who will implement the decision that it is correct. But the approach like “whether I’m right or wrong, but I’m the boss” is in the world today educated people does not work. The chances of effective implementation increase when the people involved in solving the problem contribute and believe in what they are doing.
Often the most important features of complexity result not so much in the reaction mechanisms of the object under study, but also in the interaction of the object with a very articulated and differentiated environment. For example, a conveyor car equipped with an automatic guidance system to avoid obstacles may also have a program to control and respond to sensory stimuli in a relatively simple manner, but if it is moving through a space full of other objects, or in motion, in a variety of forms, it will follow an extremely complex trajectories and are difficult to calculate a priori.
7. Monitoring the progress of implementation of the decision. The consequences of a decision are measured and assessed, or actual results are compared with expected results. Feedback is established between the control and controlled subsystems. An adjustment occurs (deviations are identified and amendments are made).
Mistakes that should not be made when making decisions:
Calculating its trajectory requires a simulation of the entire installation, which represents the positions and movements of all objects present and potentially interacting with the object. The amount of information required to accurately calculate such a simple problem seems quite disproportionate. It should be noted that all information is indeed available and individually accessible to the public, but the process of measurement, integration of information and processing required to use them is inconceivable. In the case of a basket, complexity analysis is likely to contribute to decisions in which the aggregate aggregation procedure is activated and detailed actions are calculated in real time to the actual state of the system.
1.Postpone making a decision until there is no time left for preparation (rash decision);
2. Turn a blind eye to possible consequences or not think about them (“blind” decision);
3.Use your own benefit as a criterion, don't worry about others. (selfish decision);
4. Decide only by inspiration (“brilliant” decision);
A typical problem associated with extracting information from a mass of raw data is a typical presentation system based on intelligent human-machine interfaces. These systems, in addition to a conceptual model of the available data, must contain a conceptual model of the application, that is, the purposes for which the data is used.
At the same time, the multiplicity of different and difficult to aggregate significant objects is accompanied by many connections between objects, two or two or subsets. These connections lead to many possible interactions, which, under certain factors, determine the evolution of individual objects and the system as a whole. In addition, references provide a basis for constructing a guide that allows one to recognize functions and anticipate possible behavior and evolution. The multiplicity of entities and relationships leads to some confusion in languages, difficulty in communicating and determining a collective choice in which all participants have the same understanding of the subject and terms of the agreement.
5.Decide on the basis of likes, moods, discarding rational considerations (emotional decision);
7. Not willing to learn from previously made decisions, making the same mistakes (“stubborn” decision).
The decision-making process and implementation are influenced by the following factors:
Value orientations of the leader (bias towards economics, politics and science as opposed to social and ethical aspects; either he considers making a profit a priority, or the human factor comes first, and so on);
Formalization of a network of interactions between entities with the formalization of interface protocols and interaction procedures is important element the rationality of the organized system and the effectiveness of system-wide communication, which is the basis of any collective decision-making process. The ability to manage this network is a key element to the success of many businesses.
An aspect of particularly significant complexity relates to little or more ability to make extrapolations or predictions from a designated system that is in a designated state. In the past, when studying the industrial environment and knowing even roughly the actions and measures provided, it was relatively easy for an expert to say that it was likely environment was a year earlier and how it will be a year later. The long term has been challenging, but in the short to medium term, forecasts regarding the overall setup and possible development lines have been very robust.
Competence;
Ability to take risks;
Behavioral factors;
Personal preferences;
Barriers to information perception.
Questions for consolidation:
1. List the stages of making management decisions.
2. List the stages of a rational decision.
3. What factors influence the process of decision making and implementation?
The network of interconnections between companies, the integration of capital and production, mechanisms for the diffusion of know-how and technological innovation, the characteristics of international markets, the relevance and mobility of human resources means that the number of possible combinations of factors to be assessed, establish evolutionary lines, the number and type of possible evolutions, so high, clearly articulated and structurally related to the evolution of other entities that in practice complex extrapolations can be made regarding individual business realities, even over relatively short periods of time.
Please indicate one correct answer:
1. How many stages of decision making are there in general technology decision making process:
2. What is done at the decision preparation stage:
3. What is done at the stage of making a management decision:
A) The development and evaluation of alternative solutions and courses of action, the selection of criteria for choosing the optimal solution, the selection and adoption of the best decision are carried out.
Each extrapolation process requires the use of complex conceptual tools, the collection and classification of data and information, the construction of complex logical-mathematical models, an expensive support environment and often non-trivial use, the cultural and educational environment in which the concepts and methodologies underlying the extrapolation can be developed and tested . In some cases, and with the use of appropriate conceptual analysis tools, it remains possible to extrapolate aggregates quite broadly and separately from the rest of the industrial environment.
B) A situation analysis is carried out, including search, collection and processing of information, problems that require solutions are identified and formulated.
C) Measures are taken to concretize the decision and bring it to the attention of the executors, the progress of its implementation is monitored, the necessary adjustments are made and the result obtained from the implementation of the decision is assessed.
In these cases, the interconnection network with all its functions can be considered as one system with limited interaction with the rest of the world. A feature of the organization of work in advanced technological environments, partly due to the distributed and polycentric structure of modern organized systems, is the multiple roles that each actor must play, both over time and with different interlocutors. a person’s own belonging to a given object of the system is no longer so clear. A person may at the same time belong to a given entity in certain aspects of his business, and to another in other respects.
4. How many stages of making a rational decision are there?
Modern management theory considers three approaches to the decision-making process: intuitive, judgment-based and rational.
Intuitive solution is a choice dictated by the feeling that it is right. At the same time, a manager who relies only on intuition is faced with a lot of accidents that reduce the chances of making the right choice.
Decisions based on judgment– due to knowledge or accumulated experience. They are relatively fast and cheap. However, a manager who is overly committed to judgment and experience may consciously or unconsciously avoid new alternatives even though they might be more effective than familiar choices. Typical example: "We've always done it this way."
Rational decision justified through an objective analytical process. At present, a unified “technology” for making a rational decision has not yet been developed, and there is no general judgment regarding its main stages. Figure 3.6 shows the sequence of the process of making a rational decision, in relation to which the majority of positive opinions have developed.
Rice. 3.6. Stages of making a rational decision
The prerequisite for preparing and making a decision is always a certain problem, that is, a discrepancy between the actual and desired state of the organization’s activities. When diagnosing a problem, the symptoms of difficulties and the causes of their occurrence are recognized and established. Therefore, at the first stage, the manager determines whether the problem is really so urgent that measures should be taken to resolve it.
At the second stage, the manager must deeply analyze the problem, identify probable ways to solve it, taking into account possible limitations and criteria. Common constraints during decision making include:
· inadequacy of funds, insufficient number of employees with the required qualifications and experience;
· the need for technology that has not yet been developed or is expensive;
· intense competition;
· the manager makes decisions only within the scope of his powers.
Certain recommendations serve as criteria (standards) for decision-making at this stage. For example, uniform requirements for the quality and design of products, provisions of labor legislation ─ when resolving labor disputes, etc.
At the third stage, the available potential opportunities for solving the problem, the timing are assessed, and alternative solutions are developed.
The fourth stage includes a discussion of the reality and validity of the decision being made, and an assessment of what will happen in the future. At the same time, the solution should not arise too quickly ─ this leads to the fact that some of the solutions are not implemented.
Fifth, The final stage─ selection of alternatives or actual decision-making, the effectiveness of which depends on how successfully the previous stages are completed.
There are a number of requirements for management decisions general requirements:
· comprehensive scientific validity, that is, the decision must be made on the basis of taking into account the operation of objective laws of development of a particular system and on the basis of an analysis of a specific production situation. In this case, decisions are made on the basis of reliable and complete information by comparing several options;
· competence ─ decisions are made only within the limits of the rights vested in the manager;
· focus ─ any decision must be targeted, understandable to each performer;
· unity ─ related goals and objectives must be subordinate to the main one for the sake of which the decision is made. All provisions of the adopted decision are interconnected and consistent with the previously adopted and already valid decision;
· brevity and completeness of content presupposes laconic wording of the decision, subject to a complete answer to all critical issues, which form the basis for organizing management in the process of implementing this decision;
· specificity in time ─ the manager should not give any orders without indicating the time for their execution;
· efficiency (timeliness) ─ a decision must be made at the moment when the production situation requires it. Delay and hasty decisions are equally undesirable.
The complexity and diversity of the organization's internal and external environment influence the management decisions made. Among the most important factors, on which the decision-making process and their effectiveness directly depend, include:
· personal assessments of the leader;
· decision-making environment, manifested as conditions of certainty, risk and uncertainty;
· time and changing environment;
· information restrictions;
· behavioral restrictions;
· interconnectedness of decisions.
After the decision has been made, the stage of organizing its execution begins. The effectiveness of the management decision depends on how correctly this work is done. In this regard, the theory of management decisions provides a number of basic requirements for the process of implementing solutions and its sequence:
1. Development of a plan for implementing solutions. The manager must provide for the distribution of the entire amount of work by time and objects, by goals, the achievement of which is necessary to implement the decision. The most effective way to do this is a schedule with target dates.
2. Selection of decision makers and communication of the decision to them. This stage of implementing the solution is associated with the need to: take into account the qualifications, experience, skills of the performers, the characteristics of the activity and the nature of the work they perform; clarification of goals and convictions about the meaning of the work performed; motivating performers, stimulating the effectiveness of decisions. When communicating a task to performers, excessive detail should be avoided, as this will focus on a formal report.
3. Organization of operational work to implement the decision. For this stage to be successful, there must be a clear organization even with ideal plan works It is required to give an order or order in a timely manner, check the understanding of the essence of the order and intensify the work at a certain moment.
4. Monitoring the execution of the decision. Its purpose is to record the progress of decision implementation, timely identification of deviations from programs, and take measures to eliminate or prevent deviations. As a way to evaluate a decision made, control must be systematic, timely, dynamic, objective and rational.
5. Making adjustments to the decision. This may be due to unsatisfactory organization of the execution of the decision, sudden changes in external environment or shortcomings of the solution itself.
6. One of the conditions for the process of implementing decisions made, directly related to control, is “feedback”, which allows you to determine what happens after the decision has taken effect. By using " feedback“The advantages and disadvantages of the decision taken are tested in practice, and the possibility of timely intervention in the course of its implementation is guaranteed.
