Any company’s position related to the principles of decision-making heavily affects its business prospects, relationships with key clients, competitive ability, and employee happiness. Taking it into account, it is clear that all business entities are expected to develop and implement clear decision-making strategies and algorithms instead of letting specialists use any approaches they want. In this memorandum, I explain my vision of distinguishing between effective and ineffective managerial decisions. As a new senior manager of our company, I am planning to adhere to these principles.
The effectiveness of business development steps proposed by people who possess decision-making power should always be tested to avoid unwanted outcomes and prevent different specialists from implementing conflicting measures. The first criterion that can be applied to monitoring managers’ performance relates to a decision maker’s ability to consider adverse outcomes. Also, it involves attention to strategies minimizing their impact on employees, financial stability, and business partners. Using this criterion, it is possible to make sure that a manager makes decisions after analyzing their effects in a comprehensive manner.
The next criterion that helps evaluating specialists’ effectiveness as decision makers is linked to emotional intelligence, the ability to negotiate with different stakeholders, and analytical skills. To utilize it, one should define whether a manager has taken people’s interests into account and predicted “the undesirable reactions” of interested parties (Serb & Cicioc, 2016, p. 175). The failure to do so results in internal and external conflicts that are detrimental to organizational processes and collaboration.
The last criterion related to employee effectiveness of managerial staff is the degree to which decisions made by a particular person align with the company’s vision, mission, values, and financial capacities. To be effective in fulfilling their primary duties, managers should understand that they are a part of a large team. Attempts to make important decisions without considering the primary goals of an entire team or its access to financial resources can be costly to businesses in terms of profits or reputation. Therefore, the described criterion should always be included in the evaluations of managerial decisions.
There is a variety of methods that managers can use to make sure that their decisions are good and effective for their companies. For instance, with the development of information technology, decision makers get more and more opportunities to find data helping to conduct preliminary research (Van Knippenberg, Dahlander, Haas, & George, 2015). In particular, if the outcomes of some decisions are questionable, it is possible to use case studies and research the experiences of other market players who have implemented similar initiatives.
One more step that managers can take to check the quality of their decisions prior to announcing them is analyzing the degree to which stakeholders’ needs are considered. It is known that managers should not make decisions only to complete their tasks and exercise power. Instead, they need to represent the interests of all involved parties and manage to combine them and find the middle way. In many instances, managers are expected to act as diplomatists, and analyzing this aspect of their work can become the key to defining the effectiveness of their decisions.
The decision-making process can be quite complicated due to the presence of diverse perspectives, inconsistencies in data, and difficulties related to problem identification. Business assumptions can be defined as specific statements that are considered to be true and help companies and particular specialists sort out priorities, make choices, and implement their vision. Judging from my previous experience, many assumptions that are used in managerial tasks are applicable to real-life cases as well.
For instance, it is always necessary to adhere to the principles of critical thinking in decision-making. Such assumptions include the need to check the quality of data used in research and the importance of measures for reducing the impact of logical fallacies on final results. According to another universally applicable assumption, a decision-maker should accept various viewpoints only after analyzing them. Finally, the need to avoid relying on the opinion of only one person also presents an important assumption.
The accuracy of assumptions in business should always be checked with the help of different methods. The assumption related to SUVs and the predicted changes in gas prices seems rather accurate due to these vehicles’ being fuel-efficient (Timmons & Perumal, 2016).
Despite that, the information concerning fuel price changes and a demand curve for these cars should be analyzed statistically to check the legitimacy of such conclusions. Concerning the second assumption related to airlines, it seems to be weak because no evidence of preliminary research is provided. The assumption does not explain why new airlines are needed and fails to prove that they will become popular among clients. To test its credibility, it would be pivotal to study the market and the needs of the company’s target customers with the help of surveys, flight services statistics, and top players’ business reports.
To sum it up, the effectiveness of decision-making practices heavily impacts business outcomes for companies. Thus, the approaches to making important decisions and evaluating the work of managers present a research topic of overriding importance. As it follows from the memorandum, the decisions of senior managers in large companies can be evaluated using three criteria. They include consideration given to the adverse outcomes, the analysis of different parties’ interests, and compliance with the company’s vision, mission, and opportunities.
References
Serb, D., & Cicioc, N. (2016). Study on the psychological implications in decision-making. Management Strategies Journal, 31(1), 174-180.
Timmons, D., & Perumal, A. (2016). US vehicle fuel-efficiency choices: Demographic, behavioral, and cultural factors. Journal of Environmental Planning and Management, 59(12), 2179-2197.
Van Knippenberg, D., Dahlander, L., Haas, M. R., & George, G. (2015). Information, attention, and decision making. Academy of Management Journal, 58(3), 649-657.