Decision-making is an integral part of the management of any organization and has a huge impact on the functioning of the entire company. Decisions affect not only business results, but also organizational culture, work atmosphere and employees' attitudes. What are decision problems in an enterprise? And how to deal with them?
What are decision problems in an enterprise?
According to the general definition, decision making is "a procedural and technological feature of the management process, which has an economic and psychosociological basis." This feature can be considered in two ways:
- broadly speaking, it is a process consisting of the registration and evaluation of information, identification of a decision problem, application of a specific selection criterion and making a selection,
- in a narrow sense, it is one of the stages of the decision-making process, meaning a conscious act, non-random selection of one of the many possible variants of solving the decision problem.
In other words, we refer to making decisions as the entire decision-making process or the moment of conscious, non-random choice of one of at least two possible methods of action. The starting point for making a decision is the existence of a specific decision (problem) situation regarding the functioning of the entire enterprise or its specific area. The problem situation includes elements of ambiguity, insufficient information, conflict of needs, and the necessity to make a selection. The decision problem is the problem situation transformed into questions or a set of questions. Solving a problem requires the enterprise to find an answer and take specific actions.
The areas of decision problems in the enterprise
In company management, there are 3 areas of decision problems:
- proprietary,
- managerial,
- executive.
The ownership problems concern the most important ones elements of strategic management, including shaping the vision and mission of the company, direction of its development, financing and profit sharing. It is up to the owners of the organization to make decisions in this case. So what, managers of higher levels are often involved in the process. Solving ownership problems is sometimes (but rather rarely) entrusted to the supervisory board acting on behalf of the company.
Managerial problems are related to the management of executive functions in the company. These include the following problems: regulatory, related to setting goals, plans as well as methods and standards of action in specific situations. Managerial problems may also relate to unusual, unregulated issues.
The last group - executive problems - covers all execution processes in the enterprise. Their area is very wide. These include issues related to market analysis as well as matters related to the current production, repair of machines and other everyday matters. Executive problems are usually precisely defined and easy to solve, and the ways of dealing with them are contained in various procedures, regulations and rules.
Decision making - recognizing the problem
Making every decision in an enterprise is a kind of a process based on comprehensive analysis, specialist knowledge, experience and logical thinking. Regardless of the type of decision and its importance, the most important element of the process is the appropriate recognition of the situation. Why?
Many owners and managers do not search for the real cause of the problem situations - they are not looking for the truth, the real essence of the problem. They use well-established patterns of crisis resolution, make decisions without preparation and do not think long about the consequences. As a result, they don't always get what they want. Ill-considered decisions may have a negative impact on the functioning of the entire enterprise. Depending on the form and specificity of the problem, this may lead to:
- a decrease in the company's performance,
- loss of customers,
- deterioration of the company's image on the market,
- loss of financial liquidity,
- wasted market opportunity,
- decrease in team productivity,
- deterioration of the atmosphere in the team,
- increase employee rotation.
To avoid negative consequences, you should be fully involved in every decision-making process in the company. The first stage of decision-making should be the formulation of the problem and its comprehensive diagnosis. First of all, you need to answer the following questions:
- what is the problem
- where and when was it created, what are its sources,
- can it be underestimated,
- whether it repeats itself, whether it happens for the first time.
The more precise the picture of reality and possible consequences we create, the more likely we have the right decision.
What's next?
After identifying the problem, it's time to analyze it. The analysis should provide detailed information on the complexity and form of the problem. On their basis, possible solutions are identified and scenarios are created that show the possible consequences of each decision. The consequences should be examined in terms of the resulting opportunities and threats. After a comprehensive analysis, the best option is selected. Finally, the effects of the decision are implemented, i.e. the choice is translated into a real solution.
Decision-making problems in a company always lead to some consequences. For positive results, you must fully commit to decision-making process. A detailed problem analysis based on reliable, carefully collected information is an attitude! This should always be borne in mind, regardless of the complexity and seriousness of the problem.