Decision Making for Management Levels: Everything You Need to Know
While decision-making is defined as the mental process of making a selection from a set of alternatives, it is safe to say that people encounter this process almost every minute of every day. From making decisions on what to eat to deciding on a purchase, every decision-making process bears an outcome that might turn into an opinion, a recommendation, or an action. Decision-making becomes much more critical on managerial levels since decision making for managers can affect not only their entire team but also the objectives and goals of their company. So what kind of a role does decision making for management play in various size companies? How do managers make decisions effectively? Here is everything you need to know on decision-making for management levels.
What are the Types of Management Decisions?
Decision-making is defined as selecting between alternative actions. Thus, decision-making as a manager concerns the choices faced by managers within their responsibilities in the company. The decision-making process for managers is especially important since it is one of the key points of planning ahead. Therefore, decision-making for management levels can be categorized into three different classifications. These categories are based on the level at which they occur.
1. Strategic Decisions
Strategic decisions help establish and effectuate the objectives and strategies that the company aims for. These types of decisions usually occur at the highest level of the organization, mostly between C-level executives and managers.
2. Tactical Decisions
These types of decisions entail the both basic and complex tactics used to reach company goals mentioned above. Tactical decisions are generally made by front-line managers or mid-level execs.
3. Operational Decisions
Concerning the methods for carrying out the organizaton’s value towards its customers, operational decisions are primarily effectuated by middle and front-line managers, as well.
In addition to this classification, we can also categorize management-level decisions based on the capacity of decision-makers.
1. Organizational Decisions
This type of decision affects the organization directly. Made by a manager or an employee within their official capacity, organization decisions usually wind up getting delegated to other team members.
2. Personal Decisions
On the contrary, personal decisions are those that directly affect the individual rather than the organization. Nonetheless, a personal decision may ultimately affect the company due to its effect on the individual employee. These decisions are not made within a professional capacity and are not chosen to be delegated.
The Ultimate Question: Deciding When to Decide in Management
While in life, some decisions are quite simple, decision-making in management is often much more complicated since it involves a range of various options and unforeseeable outcomes. Managers need to gather sufficient information when selecting between various choices and uncertain outcomes. This leads them to another crucial decision: how much information is required to land on a satisfying decision? Organizational decision-making is frequently – yet unfortunately – conducted without enough information. One of the many hallmark qualities of a great leader is his ability to pinpoint when to pause a decision-making process and go back for more information, as well as when to make a decision with the information he has already got. Reaching a decisive verdict too quickly can be as harmful as taking too long to make a decision, which is why managers have to decide when they have gathered enough data and must be prepared to swiftly change course in case additional information sources become available. This is especially significant for individuals with sensitive egos since changing course in the middle of a decision-making procedure may result in the individual reluctantly admitting to his mistake. As challenging as it may be, effective managers are capable of recognizing the complexity of the given task and that sometimes, mistakes are inevitable. It is important to realize that it’s much better to minimize a poor decision’s impact on the company by determining it quickly and correcting the course.
What Is Effective Management Decision-Making?
The quality of a manager’s decision-making skills is usually judged by how much the decision pleases the stakeholders. Although this may come as a significant issue in the short term, unfortunately, this is not a healthy yardstick for determining the effectiveness of a manager’s decision-making capabilities in the long haul. Decision-making and management go hand-in-hand and require a holistic approach for useful outcomes. Effective managerial-level decision-making can be defined as:
- Successful in achieving its purpose over the long-term
- Robust since a sound and methodological process has been used to make the decision
- Responsible due to the fact that the decision-makers have been acting according to their responsibilities
- Inclusive because people to be effected by the decision have been accounted for
- Defensive since the logic behind the decision-making process can be explained to others
Decision-Making Techniques for Managers
Decision-making strategies in management are as valid for seemingly simple decisions as they are for the most complex ones. When managers are under pressure, they tend to miss out on one or more of the seven steps in decision making, which leads to poor judgment and, therefore, incorrect and ineffective decisions. With these decision-making techniques, you, too, as a manager, can glide through the decision-making process with ease and make effective choices regardless of their simplicity or complexity.
1. A Process-Oriented Approach
As a manager, one of your primary duties is to get job done and get it collectively together. This involves enhancing organizational procedures to accomplish certain objectives and produce successful outcomes. This can be effectively managed using a sensible decision-making plan. When establishing a decision-making process, the first action you should take as a manager is to frame the issue and ensure that the right questions are being asked. You also need to make sure that everyone agrees on what needs to be decided. Afterward, you can swiftly build your team, manage the group dynamics, and analyze the problem in order to craft a viable solution. Following a structured process will help you achieve the desired outcome much faster.
2. Involving Your Team in the Process
Decision-making doesn’t have to be a lonely process that a manager is bound to go through on his own. In fact, research shows that involving more team members in the process can bring multiple viewpoints to the table and stimulate a rather creative problem-solving atmosphere. Team decision-making is proven to be highly effective since it pools an individual’s collective experience and know-how and leads to more innovative solutions and healthy outcomes. By taking other people’s perspectives into consideration, you can become more aware of your own partial judgments and lean towards a new approach to overcoming a specific challenge. You can benefit from various decision-making tools to effectively involve your team in the process.
3. Putting Together a Collaborative Mindset
In order to ensure your team works collaboratively rather than contentiously, it is important to foster the right mindset early on. There are two key mindsets you can consider when facing a decision: advocacy and inquiry. Advocacy can be defined as a mindset that views decision-making as a contest. In this kind of group, the individual team members seek to persuade others and defend their claims. The mindset of an “inquiry” type of group, on the other hand, navigates decision-making with collaborative problem-solving. An inquiry mindset centers on individual testing and presenting balanced arguments rather than focusing on persuasion and lobbying. Again, research shows that decisions made and followed through by diverse team members deliver 60 percent better results. An inquiry mindset allows team members to feel empowered towards thinking critically and feeling their point of views are valued and welcomed.
4. Building a Psychologically Safe Environment
For your team members to feel safe and comfortable sharing their diverse opinions within the group, it’s essential to create a psychologically safe environment and be successful at maintaining it. Experts say that this type of safety and comfort is crucial for getting the information and perspectives out in the open. It’s always helpful to be able to think effectively before coming to a final conclusion. You must be respectful and give fair consideration when listening to your team members’ opinions in order to help them feel safe and valued. By actively being attuned to your team’s attitudes and emotions, you can build a stronger bond of trust with your employees.
5. Strengthening the Purpose of the Decision
It is easy to fall into a common management pitfall throughout the decision-making process and lose sight of what the goal of the ultimate decision was. It’s vital to avoid this mistake and remember that the goals you are working toward need to be clearly articulated throughout the process in order to ensure they are ultimately reached. As you dive deeper into the decision-making process, it becomes easier to get so immersed in one part of the equation that you lose track of your actual purpose. Revisiting your objectives, goals, and purposes helps you make decisions related to complex initiatives and ensure that your team members are fully motivated and aligned. It is also important to show your team that their ties to this process – big or small – all contribute to the organization’s larger objectives.
Investing time and effort in the decision-making process and seeing it as a core-management competency can help you land on effective, profitable, and pleasing decisions – both in the short and the long term. Therefore, revisit the above 5 topics regularly, and try to improve your decision making effectiveness.