Effective managers recognize that given the complexity of many tasks, some failures are inevitable. For individuals with fragile egos, changing course can be challenging because admitting to a mistake can be harder than forging ahead with a bad plan. Effective managers must decide when they have gathered enough information and must be prepared to change course if additional information becomes available that makes it clear that the original decision was a poor one. Failing to react quickly enough can lead to missed opportunities, yet acting too quickly can lead to organizational resources being poorly allocated to projects with no chance of success. Waiting too long to make a decision can be as harmful for the organization as reaching a decision too quickly. When deciding among various options and uncertain outcomes, managers need to gather information, which leads them to another necessary decision: how much information is needed to make a good decision? Managers frequently make decisions without complete information indeed, one of the hallmarks of an effective leader is the ability to determine when to hold off on a decision and gather more information, and when to make a decision with the information at hand. While some decisions are simple, a manager’s decisions are often complex ones that involve a range of options and uncertain outcomes. frustration among employees, reduced morale, and increased turnover (which can be costly for the organization) if the decisions involve managing and training workers.increased expenses if there are too many workers or too many supplies, particularly if the supplies have a limited shelf life or are costly to store, and.reduced productivity if there are too few workers or insufficient supplies,.Poor decision-making by lower-level managers is unlikely to drive the entire firm out of existence, but it can lead to many adverse outcomes such as: Consider, for example, a first-line supervisor who is charged with scheduling workers and ordering raw materials for her department. Managers at lower levels of the organization generally have a smaller impact on the organization’s survival, but can still have a tremendous impact on their department and its workers. ![]() ![]() ![]() A good decision can enable the organization to thrive and survive long-term, while a poor decision can lead a business into bankruptcy. Members of the top management team regularly make decisions that affect the future of the organization and all its stakeholders, such as deciding whether to pursue a new technology or product line. Stakeholders are all the individuals or groups that are affected by an organization (such as customers, employees, shareholders, etc.). It is important to recognize that managers are continually making decisions, and that the quality of their decision-making has an impact-sometimes quite significant-on the effectiveness of the organization and its stakeholders. What are the basic characteristics of managerial decision-making?ĭecision-making is the action or process of thinking through possible options and selecting one.
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