Managerial Decision Making Literature Review
Style of leadership impacts organizations in many different ways. The extent of the impact depends on the leadership style used. The effects range from productivity and metrics to decision making and employee morale. Different methods give different results, and organizations need to identify a leadership technique that suits them well. Leadership is a key to determine organizational success has been studied extensively. This essay attempt to analyze the various leadership aspects and their impact on organizational learning.
When discussing employee morale, leadership style is a vital aspect to consider. Autocratic leadership, more than often, yields a negative effect on employee morale. This is because employees are not given a chance to offer any kind of input and are thus expected to follow orders without question. This creates a feeling of alienation among followers, which in turn leads to low team morale. The leadership style known to enhance employee morale is democratic leadership as it produces an environment of togetherness, and more than often, employees will work as a team as everyone feels that their contribution to the organization is highly valued and respected. The same case applies to liberal leadership, although for it to work, there needs to be self-motivation on the part of employees (Kennedy, 2002).
Decision making is also an integral part of any business organization. If an organization is seen to be making poor decisions in critical situations, it is the manager that is put under scrutiny maintains that as a leader, one will be called upon to make crucial decisions at different times of his career. Don't use plagiarised sources.Get your custom essay just from $11/page
Management is a crucial task in any organization. The success and ability of an in to achieve its goals and objectives depend on the kind of control and the management structures that exist in an organization. Organizational management is always a challenging task, as it involves a lot of functions. The management success of an organization implies that the manager(s) is effective in discharging his/her managerial duties. The administrative responsibilities of an effective manager consist of several managerial functions that determine the course of crucial operations in an organization. One of the most critical managerial roles that have a significant impact on the services of an organization and manager’s or management’s success is decision-making.
The lives of human beings are filled with instances and situations that require making decisions. These decisions have impacts on our lives and how we achieve our goals and objectives. It is the same with organizations, and they operate by people making decisions. Everyone in an organization from the junior employee to the most senior staff and these situation decisions play an essential role in the determination of the institution’s success story. The people in an organization who have the most significant mandate of decision making are the managers. A manager discharges his/her core duties of planning, organizing, leading, and controlling by making various relevant decisions. Decision making is certainly the primary management function and that in most cases, the managers are the ones that make crucial decisions affecting an organization.
The decisions made by managers in an organization can either be elaborate or simple with low or high impacts on the operations, finances, and the image of a business enterprise. “The main role of an executive in any institution is the decision making” (Marchisotti, Almeida, and Domingos, 2018). This further shows the relationship that is there between a manager(s) and decision making within an organization. For the last few decades, several studies have been done about various factors that improve a manager’s ability to make the right decisions or what might be the hindrances to ethical decision making. It is good to note that decision making has always been a continuous process because problems still emerge and may require a manager’s excellent decision-making skills. Therefore, decision making is one of the core functions of management that has enormous impacts on the operations and success of an organization, and it is therefore required of managers to possess improved decision-making skills.
Literature Review
As indicated in the introductory part, managers need to have excellent decision-making skills because solving the problems in an organization depends on their ability to make the right decisions and how fast they can make these decisions. Several works of literature have been done by researchers and professionals in the field of management that plays a significant role in shaping the managements’ decision-making abilities. These pieces of writing cover the most critical topics in the decision-making process. The essential theme of review in this literature include the decision making styles that a manager can use in an organization and the crucial steps in the decision making process for better decisions.
decision-making styles
A majority of people possess different techniques of making decisions regarding various problems that they pass through. Multiple people have suggested different decision-making styles that managers and people, in general, utilize when making critical decisions either knowingly or unknowingly. (Al Shra’ah, 2015) defines decision-making style as “the ways by which an individual applies the information to formulate a decision.” It should also be known that an individual’s decision-making style is a reflection of a cognitive process. In another term, decision making can be defined as the learned habitual response pattern exhibited by an individual when confronted with a decision situation.” There are mainly four decision making styles that people apply when making decisions. These decision-making styles include; behavioral, conceptual, directive, and analytical. (Anita, Jasmina, and Ljupco, 2017).
In the directive decision-making style, Orosova explains that it is a style that managers use to make decisions based on a relatively small amount of information. They also point out that it is used when there is a lack of tolerance for vague details and is mostly used by autocratic leaders who tend to behave aggressively. Analytical managers, according to (Anita, Jasmina, and Ljupco, 2017), are those managers that rely on data and tend to do extensive research of data. These managers are tolerant of vague information and the use of complex cognitive terms. Conceptual managers are those who base their decisions on an extensive elaboration of data (Anita, Jasmina & Ljupco, 2017). They are always creative and inventive. In behavioral decision-making style, Anita, Jasmina, and Ljupco (2017) explains that managers who use this management style, make their decisions with a subordinate in mind in that they aim to maintain good relations with their subordinates.
Anita, Jasmina, and Ljupco (2017) conducted a research study to determine which of the four decision making styles is most preferred. In their research, they selected 61 respondents, including secondary and primary school principals. The participants were given questionnaires containing questions for variable management styles. From the investigation, the results showed that most respondents preferred the management style motivated by building good relationships. It also shows that depending on the context, directive, conceptual, and analytical techniques are better when used. In a research study to determine the impacts of decision making styles on organizational learning, Al Shra’ah (2015) distributed a total of 152 questionnaires to 76 companies for a general manager and executive manager in each company. Al Shra’ah (2015) got back 119 usable responses, and the main findings indicated that most decision-making styles have positive impacts on the decision process in an organization. Therefore, depending on the organizational culture, managers need to align their decision making styles to reflect the culture of the organization. By doing so, managers tend to make better decisions.
Decision-Making Process
Regardless of the decision-making style that a manager employs when making various decisions in an organization, making successful decisions tend to follow certain stages or steps. These steps are very crucial for an effective decision-making process. Galak (2010) argues that “understanding of the decision-making processes could help us in preventing bad decisions and in stimulating the good ones” (p. 79). The steps of the decision-making process offer guidelines that managers can follow when making whether complex or straightforward decisions. According to Puseljic, Skledar, and Pokupec (2015), there are six stages or steps of the decision-making process. The provides clear outlines for managers to follow when making decisions. Other researchers, however, have a varied number of steps in the decision-making process, but they all write the important ones.
The first step in the decision-making process, according to Puseljic, Skledar, and Pokupec (2015), is problem identification. The decision-making process begins by identifying a problem that needs a solution. Al-Tarawneh (2012) defines this step as problem definition, and he points out that it involves “identifying root causes, limiting assumptions, system and organizational boundaries and interfaces and any stakeholder issues” (p. 7). Papadakis, Lioukas, and Chambers (1998) point out that the aim of problem identification and definition in the decision-making process is to ensure that the problem is clearly understood before going forward with other steps of making a decision. The second step of the decision-making process is gathering relevant information. Al-Tarawneh (2012) says that before making a decision, it is vital to get all the necessary information required to initiate and support the decision-making process. The required information can be acquired internally by assessing the internal processor externally from other people, books, and any other source. According to Monahan (2000), this stage also involves developing a model of the solution to a problem.
The third step is identifying alternatives to the model developed in the previous step (Monahan, 2000). A model developed in step 2 is one of many possible solutions that can offer a solution to a problem. Puseljic, Skledar, and Pokupec (2015) point out that it is important to identify several other approaches to solving the problem because it helps to interpret and understand the problem from different perspectives. However, these alternatives must meet the requirements. The fourth step in the decision-making process is weighing the evidence and choosing among the options. Considering the other options involves brainstorming how it would look like if each of the options is carried out to the end. After that, choose one choice or a group of alternatives that will give the best solution (Monahan, 2000).
The fifth step is the implementation of the selected alternative of a group of other options. According to Al-Tarawneh (2012), this is the stage where the best-selected choice is put into action to solve a problem. The sixth step is the review and evaluation of the decision adopted. Puseljic, Skledar, and Pokupec (2015) point out that this step evaluates the decision taken based on the results compared against the problem requirements. If the results reflect the desired results, then the decision made is considered as auspicious. However, if the resolution does not meet the required results, then there is a need to do more research to gather more accurate information and brainstorm on better alternatives (Puseljic, Skledar, and Pokupec, 2015).
Conclusion
Decision making is a very crucial function of management. Everything managers do in an organization must reflect the best decision because these decisions can have huge impacts on the organization’s operations, finances, human resources, organization’s image, and reputation, and quality of service offered. Many research studies have been done on various topics about decision making in organizations, especially for managers. Some of the most stressed factors of decision making are styles and decision-making process. According to the literature review, the four decision-making styles are behavioral, conceptual, directive, and analytical. Also, there are six essential steps in the decision making process that helps guide managers to make better decisions. Therefore, these factors contribute a lot to successful decision making and effective management.
Depending on the organization’s structure, different leadership styles will yield different results. Some organizations demand dictatorial leadership, while others need laissez-faire leadership. In an organization where employees are highly skilled and experienced, laissez-faire leadership is the best way to go. Authoritative guidance is, on the other hand, required where there is a need for a disciplined and strict team of employees. Caution, however, needs to be taken to ensure that such leadership does not lead to low morale among employees. This will more than often translate to low productivity, which will, in the long run, hurt the industry. To be able to work efficiently and be productive, leaders need to assess the environment that surrounds their organization before concluding the type of leadership they need to exercise. This will help them avoid chaos and bring the best out of every employee.
References
Al Shra’ah, A. E. M. (2015). The Impact of Decision Making Styles on Organizational Learning: An Empirical Study on the Public Manufacturing Companies in Jordan. International Journal of Business and Social Science, 6(4).
Al-Tarawneh, H. A. (2012). The main factors beyond decision making. Journal of Management Research, 4(1), 1-23.
Anita, A., Jasmina, S., & Ljupco, K. (2017). Styles of decision making and management and dimensions of the personality of school principals. International Journal of Cognitive Research in Science, Engineering, and Education, 5(2).
Bavol’ar, J., & Orosova, O. G. (2015). Decision-making styles and their associations with decision-making competencies and mental health. Judgment and Decision making, 10(1), 115-123.
Galak, O. (2010). Decision Making: A Dynamic Perspective.
Marchisotti, G. G., Almeida, R. L., & Domingos, M. L. C. (2018). Decision-making at the first management level: The interference of the organizational culture. Revista de Administração Mackenzie, 19(3). doi:10.1590/1678-6971/eRAMR180106
Monahan, G. E. (2000). Management decision making: Spreadsheet modeling, analysis, and application. Cambridge University Press.
Papadakis, V. M., Lioukas, S., & Chambers, D. (1998). Strategic decision‐making processes: the role of management and context. Strategic management journal, 19(2), 115-147.
Polič, M. (2009). Decision making: between rationality and reality. Interdisciplinary Description of Complex Systems, 7(2), pp.78-89.
Puseljic, M., Skledar, A., & Pokupec, I. (2015). Decision-Making as a Managem