Management Decision Making Technology: Requirements, Methods and Analysis

The technology for the development and adoption of management decisions is critical for the long-term effective operation of any enterprise. Indeed, the success and prosperity of a 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, with all the risks involved. To increase the efficiency of entrepreneurial activity and ensure communication processes, decision-making technology is used. The implementation of the management decision should be carried out with the fulfillment of the requirements of optimality, legality, efficiency, concreteness, simplicity of form and clarity of content. For control, self-regulation mechanisms are desirable. In particular, it is possible to provide feedback in the field of management. Today, there is no one universal technology for managerial decision making that can be used anywhere. This is due to the fact that each leader has specific skills and approaches to solving problems. 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 assessing the severity of a managerial problem. But if the technology of the management decision-making process is nevertheless developed and applied, this allows us to ensure professional performance of functions and achieve our 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 their short list:

1. 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. Managers do not resort to the services of consulting companies. Solution development is carried out independently. Therefore, they have all the consequences and risks of making ill-conceived and erroneous decisions.
4. Owners of business entities are often also their managers at the same time.

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, at each of which a certain set of procedures is performed. Their implementation allows you to choose the best solution to the existing problem situation. In this case, an analysis of the internal and external environment, goals and selected criteria. The potential and development prospects of the organization are taken into account. But, as we remember, there is no one true recipe. Although we can talk about the basic technologies for making managerial decisions that are used in this business. What is meant?

Information Technology

Computer technology came into our life only a few decades ago. But how could she transform her! It is difficult to imagine effective entrepreneurial activity and adequate management decisions in a small organization without information technology. A lot of communication processes are now based and provided on them. In addition, they allow you to more quickly act, develop and make decisions. When sharp changes occur in the market, the cycle time is reduced, and unstable consumer demand is observed, it is important to have adequate data on which the strategy and tactics of work will be built. What can be cited as information technology? First of all, it is a telephone connection. With its help, you can quickly manage at a tactical level, contact the necessary specialist, and more. Also, if you need to hold a meeting with several specialists at a considerable distance, you can use tele-, audio- and video conferencing. 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 out a large number of papers and / or look for totals. The introduction of information technology has allowed us to move this monotonous job to a computer, to extract the necessary data from it is much easier. After all, there is no need to look for the right paper among various waste paper. In addition, you can set the task of forming and displaying the required array of information, if it is not. Fortunately, modern data processing systems have extremely wide functionality.

About management decision

What is it like? In fact, this is a choice that a decision maker (NEC) must make in order to fulfill the tasks assigned to him by official duties. How can it be considered? There are two main points:

1. The decision in the role of the process of choosing a particular option from several available alternatives. As a selection criterion, you can choose the required efforts, risks, investments (cost, costs), time frames, degree of progress towards the designated goal.
2. The decision in the role of the result of choosing a particular option from a variety of alternatives. At the same time, the possibility of choosing more than one is excluded.

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

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

About the stages

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

1. Preparation of management decisions. At this stage, an analysis of the existing situation is carried out, the external and internal environment of the enterprise is assessed, the necessary information is searched, collected and processed. In addition, attention is paid to the diagnosis and specification of the problem that needs to be solved.
2. Decision-making. Based on the available information, the development and evaluation of available solutions, as well as the actions that are necessary for their implementation, is underway. A system of criteria is being created that will allow choosing the optimal approach to achieve the task.
3. The 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 already exist. But is it possible to somehow detail the process? Yes, for this it is necessary to divide into stages and outline individual procedures that will be included in them. As a guide, you can take the diagram below.

Stages and Procedures

In this model of technology for the preparation and adoption of managerial decisions, six separate components are distinguished. They are stages. They include separate procedures:

1. Analysis of the problem situation. First of all, there is a planned diagnosis. It is conducted to identify potential threats, as well as existing problems. Symptoms of an unsatisfactory situation are identified and recorded, 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 successfully completed.
2. Development of management decisions. The external / internal environment of the enterprise is analyzed. Goals are defined. Criteria for their achievement are being developed. Variants of possible solutions are generated. They are being evaluated and agreed upon. The best option is chosen. After that he is approved.
3. Implementation of management decisions. It is carried out by changing the parameters of the managed system.
4. Monitoring the implementation of the solution. Implementation is monitored by comparing actual and planned parameters.
5. Assessment of the effectiveness of the decision. For this, the value of the additional profit received per one unit of cash that was invested in the development and implementation is used. Additionally, you can take control.
6. Improving the process of development and implementation of management decisions. The data on information preparation and the quality of the implementation of the previous stages are analyzed. The tools for developing and implementing a management solution are expanding.

About the quality aspect

Providing adequate technology is half the battle. It must be ensured that it is implemented. That is, it is necessary to provide a single mechanism that will maintain the integrity and consistency of the procedures described at each stage. This will increase the quality of performance and obtain more satisfactory results at the control stage. What else will allow you to get a more pleasant result? Quality is influenced by:

1. Correct statement (recognition) of problems.
2. The quality of the information received (timeliness, relevance, reliability).
3. Value orientations and qualifications

To increase overall efficiency, it is necessary to pay attention also to planning, accounting, analysis and control. That is, a unified system of collecting, processing, and summarizing information should be created. If you transfer such data 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 else can their quality be improved? Follow these ten principles in your work:

1. Before you begin to delve into the details, you should evaluate the problem as a whole.
2. No need to make a decision until all possible options have been considered.
3. Hesitate.
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.
6. Many questions should be asked.
7. No need to be satisfied with the first decision that comes to mind.
8. The scientific approach should not be neglected.
9. It makes sense to listen to experts.
10. It must be remembered that problems are considered by people from their unique point of view.

About requirements

If an important issue is being addressed, then what should be expected from the process? For example, we have information technology for making managerial decisions. They need computer equipment. 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 goal. In the opposite case, there is no reason to talk about making rational decisions.
2. Be reasonable. There must be a quantitative / calculation basis for the solution, which explains the motive for choosing it from a number of others.
3. Have an addressee, as well as deadlines. That is, you need to make sure that the decision is performed by a specific person or unit. Also, do not forget about the time limit.
4. Do not be controversial. It is necessary to provide that the solution matches the requirements of internal and external circumstances. And also with the events that took place, and what are planned.
5. Eligibility. That is, it is necessary that the decision has a basis in the form of regulatory documents, orders and instructions of managers. In this case, it is necessary to take into account their rights and obligations, as well as employees who are selected as performers.
6. Efficiency. It is necessary that the solution be the best in terms of the expected outcome.
7. Specificity. It should answer the questions of where, when and how to act.
8. Timeliness. Making a decision is necessary when it can contribute to the realization of the goal.
9. Completeness, brevity, clarity, comprehensibility to the contractor without additional clarifications and clarifications.

Such an organization and management decision making technology 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, provide very accurate and reliable results. Although a simultaneous use requires a high-class specialist. 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 result of a solution under uncertainty. For example, if there are competitors.
2. Queuing Theory. 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. They are used to determine the right 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 this case, all steps that can be done are applied and various alternatives are evaluated.
6. Simulation modeling. It involves the creation of a simplified construction of the existing situation, making adjustments and evaluating the result with subsequent application in reality.
7. Economic analysis. It combines the methods of assessing economic benefits and costs. It can be used to calculate the relative profitability of the enterprise. For example, to analyze the breakeven point.
8. Payment Matrix. This is a method of statistical decision theory. It is used if it is necessary to choose one of several options similar in results.
9. Forecasting. A method that is based on the use of past experience in order to apply it to build assumptions for the future.

Conclusion

Alas, it is difficult to cover everything with one theory in a small article. One could also talk about 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 out of place 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 basis provided should be more than enough to have an idea of ​​how and where to move. Indeed, you will not be full of knowledge without practice. The information received must always be fixed if there is no desire to say goodbye to it.