Every person has to make many decisions every day. And the manager adds a lot of professional tasks that he must solve daily. Moreover, a lot depends on the quality of the option found. Therefore, it is necessary to be able to make decisions efficiently and competently. We will tell you what the 10 steps of the algorithm for making a rational managerial decision are and how they will help you find the right way out of any situation.
Concept of solution
Each of us is constantly looking for answers to many questions. Decisions can be global and insignificant, fateful and routine. But in any case, the solution is the choice of the most suitable option from the available alternatives. When making a decision, a person assumes the assumed risks and responsibility for the consequences. Therefore, making any decisions is a rather difficult matter. The peculiarity of household decisions usually lies in the fact that the person who takes them and executes them most often coincides.
Management decision
The manager’s job is to make plans, answer numerous questions, and solve production problems of various sizes. However, the management decision has a number of specific features. Unlike ordinary ones, management decisions have specific goals. They are associated with the functioning of the organization and affect the activities of many people, therefore, the degree of responsibility in this case is higher than in the private life of one person.
Another difference that affects the decision-making algorithm is the consequences. The fate of the organization, development and stability of the business may depend on the chosen option. The scale of such decisions can be different: from the lives of several people to entire regions. Therefore, the importance of a well-thought-out approach to the process of finding a solution is seriously increasing.
And another factor in management decisions is the professionalism of the person who takes it. A manager is a specially trained person who, on duty, constantly has to look for suitable options for the development of the organization and eliminate current problems.
Types of Solutions
There are several reasons for classifying decisions:
- According to the implementation period, short-term, medium-term and long-term decisions are distinguished.
- According to the degree of influence on the activities of the organization - strategic, tactical and operational.
- Depending on the method or decision-making algorithm, heuristic and sequential.
- The leading functions are organizational, coordinating, mobilizing, regulating and controlling. According to the frequency of adoption - single and repeated.
- By the number of participants - individual, group and corporate.
- According to the degree of formalization of the process - algorithmic, structured and contour.
Decision Milestones
Despite the wide variety of production and professional tasks, in general, all the constituent elements of this process include the following steps:
- Preparatory. At this stage, the conditions for making a decision are identified, the problem is indicated, information is collected.
- Assessment of alternatives. At this stage, criteria for evaluating options are developed, an analysis of opportunities is carried out, and a certain system of possible solutions is built.
- Decision making. At this stage, many actions are taken to evaluate and select an option.
- Implementation. At this stage, it is necessary to appoint performers, to develop an action plan.
- Control. It is not enough to choose the right option and implement it. It is also necessary to establish a system for monitoring its implementation, develop criteria for evaluating effectiveness, and prepare reporting documentation.
This is the most general rational decision-making algorithm, in each case it is filled with its own content. It is also influenced by the conditions in which the search for options is conducted. The decision-making process also depends on the methods most suitable for finding them in a given situation.
Decision conditions
The most desirable condition in which the manager has to look for a solution to production problems is the situation of certainty. In this case, the main expected consequences and results are known. However, most often the situation is different. The difficulty in finding the right solution to the problem lies in the fact that this process often proceeds in difficult conditions. Most often, the situation is characterized by uncertainty or even risk. In such cases, the management decision-making algorithm is characterized by high variability, since it is necessary to take into account possible scenarios.
Uncertainty assumes that only part of the input data is known, and the risk is usually associated with potential loss of resources and unpredictability of consequences. Different conditions lead to the fact that managers use different methods of finding solutions.
Decision methods
Each manager uses his own proven tools in finding solutions to production problems. Traditionally, methods for finding the right option are divided into impulsive, rational, intuitive, heuristic. However, in management, decision-making techniques based on a rational approach are considered preferable. At the same time, for each leader, to find a solution, his own, author's algorithm is usually worked out with experience.
The decision tree is one of the most popular logical methods for finding a scenario. This is a one-dimensional scheme, where for each question a possible answer is found and possible consequences are traced. This method is built on causal relationships, it eliminates the impact on decisions of emotions and impulsivity. This method is used in machine learning, in logic, in statistics. Its most important limitation is that not all consequences can be predicted. Also, all methods are divided into types depending on the number of participants in the solution search process.
Group decision methods
The most famous method for finding solutions in a group is to brainstorm. It is especially good when you need to find a creative, custom solution. More traditional methods of solving managerial tasks in a group are meetings and discussions. There is an exchange of views and a compromise. The disadvantage of this method is the large time costs.
There is a Japanese version of this method - a meeting in Japanese. In this case, the group is not going to discuss, but expresses its opinion and formulates its vision of the decision.
There is also such an algorithm for making team decisions as an expert group. In this case, a team of specialists from different fields gathers and offer their own solutions. In this method, the main thing is to set strict regulations and a sequence of expressing opinions, procedures for choosing an alternative.
Individual decision making methods
Often a situation requires operational solutions, and in this case, individual methods for finding an option are usually used. The manager can use ranking methods, a random impulse. However, in such a situation, the algorithm for making managerial decisions only in the final phase is individual. At the stage of preparing the decision, forming a package of alternatives, specialists of the organization and experts can participate in it. And already the final choice is made by the manager, based on the arguments given by experts, and personal conviction. Often, leaders use the traditional Plato method, i.e. method of pros and cons.
10 step algorithm
In management theory, you can find many technologies for finding solutions to production problems. In their fullest form, they can be represented as 10 steps of an algorithm for making rational managerial decisions. This comprehensive program involves consistent steps to solve the problem.
Stage 1. Diagnosing the problem
In order to solve any problem, you need to clearly articulate a problem that needs to be addressed. It is in the verbalization of the problem that specialists see the possibilities of solving it. Traditionally, this formulation is carried out in a negative way: an emphasis is placed on what does not suit the organization in this situation.
Stage 2. Preparation for decision making
The next step in the decision-making algorithm is research. In order to find the right option for the development of the situation, it is necessary to collect a maximum of information. This can be statistics, expert opinions and estimates, report results. At the stage of preparation for the search for a solution, it is necessary to evaluate the external and internal factors that influence the situation. In the case of an individual decision, the manager may also turn to his own experience of behavior in similar circumstances. In group methods, usually each specialist offers his own vision of the context in which the decision will be made.
Stage 3. Development of conditions and criteria for decision making
Any option should take into account different factors and consequences. Therefore, the decision-making algorithm necessarily includes a stage at which an assessment of possible risks occurs with a particular development of events. Conditions in the first place may differ in the amount of information available: certain and indefinite. In the first case, the decision is easier to make, since this is a task with all known, but more often managers have to deal with the second group of conditions. In this case, you need to be able to predict the consequences based on unknown results. Conditions may also be associated with the presence and absence of risk. The higher the risks, the more difficult it is to make decisions, the higher the responsibility of the leader. In addition, the conditions for making decisions are corporate values and norms. They play a limiting role on the chosen action plan.
Stage 4. Formulation of the desired solution and goal setting
The next most important step in the decision-making algorithm is the definition of a goal. Before you begin to act, you need to understand what you want to achieve. First you need to imagine the goal that can be achieved with the most favorable development of events. This is a kind of ideal. And then this desired state must be adjusted taking into account the existing conditions. Goal setting is the most important stage of any activity. In management, it is believed that the goal should be achievable, relevant for the performers and organization, limited in time, measurable and specific.
Step 5. Evaluating Options
Usually, any solution has several options. Different models of decision-making algorithms suggest different ways of comparing alternatives. This may be a quantitative comparison or comparative analysis. Or you can use the expert judgment method. Each of the options should be revised. Usually, a standard is drawn up to compare the options, which allows you not to miss the most important and not be distracted by trifles. This standard is based on the criteria developed in stage 3.
Step 6. Decision Making
The solution found should start a new cycle of the production process. The decision-making algorithm necessarily includes the stage of final selection of the necessary option. The decision must be notified to management and performers. Usually, the organization has well-established procedures for informing and clerical work.
Stage 7. Statement of tasks
Thoughtful and deep development of the decision-making algorithm includes the stage of formulating tasks. Any goal is a strategy, and in order to achieve it, tactics are needed. As a program to achieve the goal are step-by-step tasks. Performers need to be offered to solve specific problems for which it is necessary to break the goal. Thus, each employee receives a fragment of the goal in the form of a specific activity that he needs to carry out.
The setting of tasks involves the answer to three main questions: why, what, and how. The employee must understand why he needs to do this, what is required of him, and must know how to do it in the best way. The task must meet the same criteria as the goal. It should be concrete, realistic, achievable, limited in execution time.
Stage 8. Implementation
After the decision is made, it is necessary to proceed to the most important part of the production process - to its implementation. At this stage, information and managerial support for decision-making should be provided. Algorithms for implementing decisions are extremely diverse, as they are determined by the characteristics of the organization’s production activities and its scope. At this stage, the contractor must clearly fulfill the tasks assigned to him, observing the standards and deadlines.
Step 9. Monitoring the execution of the decision
In parallel with the implementation, the manager must oversee this process. Its task is to evaluate how much the execution corresponds to the plan and goals, how correctly the deadlines are observed, how resources are spent. The manager at the implementation and control stage should be ready to adjust the tasks if, for some reason, they no longer correspond to the general goal.
Step 10. Performance Assessment and Reporting
After the decision is executed, the manager needs to evaluate the fidelity of its execution and the quality of the decision itself. How much did it eliminate the existing problem, with which the decision-making process began? For the assessment, the manager applies the criteria specified in stage 3. After the final analysis of the decision and the effectiveness of its implementation is made, the manager usually draws up a report in which the positive and negative results of the decision-making and execution process are recorded.