11. The types of decisions.

It is considered that a manager should perform several functions such as planning, organizing, motivating and controlling. Moreover, the manager is responsible for effective and economical use of recourses and achieving company’s objectives. In order to cope with all these tasks the manager has to make decisions. Therefore, decision-making could be considered as a key management responsibility. In the long run, good decision-making tactics will pay dividents in both your personal and business life.

However, not all the decisions are equal. They differentiate according to the level of management. There are several types of decisions, they are: routine, intuitive, strategic and complex.

Let’s start with the decisions of routine kind. They are made by first line and middle management. For making such decisions managers should be enough experienced and have a definite algorithm to cope with a problem. The manager doesn't have to gather a great deal of additional information and doesn't have to think too much to take action before making a decision. So, they are made fairly quickly and are based on judgment, also we can call them as the decisions of rational kind. For example, a supervisor in a supermarket may decide, on the spot, to give a refund to a customer who has brought back a product.

As for intuitive decisions, they are taken by middle managers, as a decision-maker has to possess enough power, authority, experience and responsibility. They are not rational and based not only on the intuition but also on the hunch. So, manager will follow that hunch which could help to make an option between equal alternatives. For instance, when a company is looking for an overseas agent, it may choose only one simply because a sales manager feels it would be the most suitable agent.

Another type of decision is strategic, which is more difficult to make since they involve problem-solving. They are made by top managers or very experienced middle managers. These decisions concern strategies, policies and human relations. Therefore, they often affect the future of the company. To make good decision, the manager should be able to select rationally.

And the last kind is a complex decision which includes the elements of all mentioned types. These decisions are made by top managers and practically by team of managers because this type involves a heavy responsibility and could be a crucial one for the company’s future direction. Complex decisions could refer to such questions as where to locate a factory or which new product to develop.

In conclusion I’d like to say that the decision-making is essential part of everyday work of manager, and the consequences of decisions show his professionalism and skill level.

12. Decision-making process.

All of us have to make decisions every day. Some decisions are relatively straightforward and simple: Is this report ready to send to my boss now? Others are quite complex: Which of these candidates should I select for the job?

It is considered that a manager should perform several functions such as planning, organizing, motivating and controlling. Moreover, the manager is made responsible for effective and economical use of recourses and achieving company’s objectives. In order to cope with all these tasks and properly organize a working process the manager has constantly to make decisions. Therefore, decision-making process could be considered as a key management responsibility.

Simple decisions usually need a simple decision-making process. But difficult decisions typically involve a list of difficulties like uncertainty. The best way to make a decision is to use an effective process. Clear processes usually lead to consistent, high-quality results, and they can improve the quality of almost everything we do. So lets outline a process that helps improve the quality of decisions.

The first step is defining the problem. And it is important that the manager doesn’t mistake the symptoms of a problem for the real problem he must solve. For example, if we have a department store which finds that profits are falling. In this situation the symptoms are falling profits whereas the real problem should be identified. It could be the wrong image, or wrong goods, or prices.

The second activity is to analyze the problem and collect necessary information before a decision can be taken. However, the manager rarely has all the knowledge he needs, that's why making-decisions involve a degree of risk. And manager has to minimize that risk.

Next stage is to work out the options available for solving the problem. This is necessary because there are usually several ways of solving it. In the case of department store the management may decide that the store has the wrong image. A number of actions might be possible to change the image. Advertisement of the store may be increased or a customer service might be improved. It is remarkable that in some situations, one of the options may be to take no actions at all.

Finally, closing step is deciding on the best solution. Before making decision a manager should carefully analyze the alternatives, considering the advantages and disadvantages of each one. He may also compromise, using more than one option. Thus, the manager of the supermarket may solve his problem by making changes in the product range, increasing advertising and improving the interior of the store.

In conclusion I’d like to say that the decision-making is essential part of everyday work of manager, and the consequences of decision not only show his professionalism and skill level, but also influence the success and the future life of the company. An organized and systematic decision-making process usually leads to better decisions. Without a well-defined process, you risk making decisions that are based on insufficient information and analysis. If you establish strong foundations for decision making, generate good alternatives, evaluate these alternatives rigorously, and then check your decision-making process, you will improve the quality of your decisions.