THE MANAGER AS A DECISION MAKER (PART 1)



THE MANAGER AS A DECISION MAKER (PART 1)

Introduction

Individuals are making decisions everyday from the moment they get up- what clothes to wear, what to eat, where to go. Decision making is central to being a manager, and whenever managers engage in planning, organizing, leading and controlling they are constantly making decisions. Every time managers plan, organize, lead or control organisational activities, they also make a stream of decisions. In opening a new restaurant, for example, managers have to decide where to locate it, what kinds of food to provide to customers, which people to employ and so on. Decision making is a basic part of everyday life and thus of every task managers perform. Managers are always searching for ways to make better decisions to improve organisational performance. At the same time, they do their best to avoid costly mistakes that will hurt it.

Managers must understand that the ways in which decisions are made in an organisation, and who makes them, can have a profound influence on organisational effectiveness and innovation. Aside the organisational factors affecting decision making, how decisions are made can affect the quality of the decisions and ultimately determine organisational performance. Yet such decisions can be very difficult to make because they are fraught with uncertainty. These series of The Manager as a decision maker will help you appreciate the critical role decision making plays in creating a high-performing organisation at the face of uncertainties.

One of the main tasks facing a manager is to manage the organisational environment. The organisational environment concerns external forces that may influence the business operations. Forces in the external environment give rise to many opportunities and threats for managers and their organizations; inside an organisation managers must address the many opportunities and threats that may arise during the course of utilizing organisational resources. To deal with these opportunities and threats, managers must make decisions- that is, they must select one solution from a set of alternatives.

Decision making is the process by which managers respond to the opportunities and threats that confront them by analyzing the options and making determinations, or decisions, about specific organisational goals and courses of action. Good decisions result in the selection of appropriate goals and courses of action that increase organisational performance; bad decisions result in lower performance. Decision making in response to opportunities occurs when managers search for ways to improve organisational performance to benefit customers, employees and other stakeholder groups. Decision making in response to threats occurs when events outside the organisation adversely affect organisational performance and managers search for ways to increase performance (Huber, 1993)[1].

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[1] G.P. Huber, Managerial Decision Making (Glenview, IL: Scott, Foresman, 1993)

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