7 Steps to Make a Manager's Life Easy
In your daily life, you take several decisions regarding what to buy, where to invest, where to spend free time, what to eat, what furniture to buy and so on. Sometimes, you may take a decision individually or in discussion with your friends or family. Likewise, in the corporate world, hundreds of decisions are taken which impact the employees, customers, shareholders and competitors. Since such decisions may involve money and impact a large number of stakeholders, they should be taken after a considerable thought.
In any organization, there is a hierarchy, and important decisions are taken at the board level while managers handling specific tasks may be accountable for the decisions taken in their departments. The success of any organization in the marketplace would depend on how quickly they take decisions.
Here are the various steps involved in managerial decision-making
1. Identify the Issues and the Opportunity
You are facing a decline in sales of washing machines or a new open source system has emerged or the government has thrown open an industry to foreign competition, these issues and opportunities have to be discussed thoroughly and a timeline has to be evolved to take a decision.
2. Assigning Tasks
Once a problem or an opportunity has been identified, managers may be given tasks to find out more information or study the issues in detail. You may have to collect more data or talk to more dealers or distributors. Sometimes, managers in charge of different departments may be asked to gather more information.
3. Evaluate Alternatives
Managers who gather data or information help the decision makers to explore various alternatives to solve the problems or find new opportunities in the market. Should we introduce a new product or change the features of existing ones? Should we import a product to tap an opportunity or make it ourselves?
4. Evaluating the Principles for Evaluation
The principles or motives for undertaking a task have to be taken into consideration. It has to be assessed and consistent with company policies. What are the risks involved in taking such decisions? Will venturing into lower value products affect the brand image or reputation?
5. Finalising the Decision
When all the alternatives have been discussed, their merits, demerits have been analysed, the top management will take a decision. It may be to invest in a new call center to improve customer service, hire qualified engineers to solve a design problem or invest in new technology. The concerned department heads- eg. financé, human resources, research, production will be involved in the discussion process.
6. Communicate the Decision
The most important part of decision making involves communicating the decision to stakeholders involved- employees, shareholders, consumers, regulators as the case may be. When there is lack of communication of important decisions, it hampers the work and productivity.
7. Action and Evaluation
When a decision has been taken at the highest level, it should be communicated and implemented as fast as possible. In a competitive environment, decisions have to be taken fast and response to market conditions should be quick enough. Evaluate results or get feedback to see if corrective measures are required.
Decision making process involves various steps that involve senior people in an organization. It can involve strategies, expansion, diversifications, resolving a problem of declining market share, faulty products, consumer dissatisfaction, new regulations and arrival of new competition. What makes managerial decisions more challenging is that it involves labour, finance, resources in terms of materials, more land or infrastructure. Or it may involve cutting down on expenditures.