Effective Decision Making In Business Management

Business management is one of the much appreciated jobs positions in the world. The manager is required to have a keen eye so that he makes sure that all the business in running smoothly and there are no stones on the way of success and no decrease in the amount of profit earned each year.

All organizations, including business has managers. They may not be called managers as different titles can be used such as leaders, directors, and head teachers and so on. A good business manager should have abilities to plan, organize, co-ordinate, command and control. In business management, the above mentioned abilities are used a lot. Some examples of these decisions are

oShould we open a new factory in the north or south of a country?
oWhat price should we charge for the new product?
oDo we buy the new machine even though this will involve job losses for some of our workers?
oIs expansion in another country going to be profitable?

In business management all the decisions are important so it is common to divide these decisions into three types

Strategic decisions are very important which can affect the overall success of the business. Tactical decisions are decisions which are taken more frequently and which are less important. Operational decisions are day-to-day decisions, which will be taken by a lower level of manager.

Taking decision is always a risk. Time, money and other resources will be used as a result of a decision. In business management, taking decisions is one of the toughest jobs. In a small business, such as a sole trader, the owner is the manager. This person will be taking risks with their own capital or savings. These people are referred to as true entrepreneurs or risk takers. If the decision goes wrong they could end up losing their own house and other assets. In a larger business such as a public limited company, the manager taking the decision in not risking his or her own capital but that of the shareholders. Although the manager is still taking risks, the cost of poor decisions will be felt differently. The manager may lose his or her job but it is the shareholders capital that is at stake.
These risks cannot be eliminated but can be reduced by following some simple steps. These steps are sometimes called the decision-making process.

oIt is important to establish the objectives of the organization.
oIdentify and analyze the problem to be solved.
oCollect data on all possible alternative solutions.
oThe most important decision in business management is to make the final decision and put it into effect.
oLook back to see whether the right decision was made. This is called review and evaluation of the decision.

Each department has its own manager. Like the manager of the human resource project will be responsible for

oForecasting staff needs
oRecruiting staff
oPreparing job descriptions
oKeeping staff records etc.

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