In carrying out management functions, such as planning, organizing motivating and controlling, a manager will be continually making decisions. Decision-making is a key management responsibility.

Some decisions are of the routine kind. They are decisions which are made fairly quickly, and are based on judgement. Because a manager is experienced, he knows what to do in certain situations. He does not have to think too much before taking action. For example, a supervisor in a supermarket may decide on the sport, to give a refund to a customer who has brought back a product. The manager does not have to gather a great deal of additional information before making the decision.

Other decisions are often intuitive ones. They are not really rational. The manager may have a hunch or a gut feeling that a certain course of action is the right one. He will follow that hunch and act accordingly. Thus, when looking for an agent in an overseas market, a sales manager may have several companies to choose from. However, he may go for one organization simply because he feels it would be the most suitable agent. He may think that the chemistry between the two firms is right. Such a decision is based on hunch, rather than rational thought.

Many decisions are more difficult to make since they involve problem-solving. Very often, they are strategic decisions involving major courses of action which will affect the future direction of the enterprise. To make good decisions, the manager should be able to select, rationally, a course of action. In practice, decisions are usually made in circumstances which are not ideal. They must be made quickly, with insufficient information. It is probably rare that a manager can make an entirely rational decision.

When a complex problem arises, like where to locate a factory or which new products to develop, the manager has to collect facts and weigh up courses of action. He must be systematic in dealing with the problem. A useful approach to this sort of decision-making is as follows: the process consists of four phases: 1) defining the problem; 2) analysing and collecting information; 3) working out options and 4) deciding on the best solution.

As a first step, the manager must identify and define the problem. And it is important that lie does not mistake the symptoms of a problem for the real problem he must solve. Consider the case of a department store which finds that profits are falling and sales decreasing rapidly. The falling profits and sales are symptoms of a problem. The manager must ask himself what the store's real problem is. Does the store have the wrong image? Is it selling the wrong goods or the right goods at the wrong prices? Are its costs higher than they should be?

At this early stage, the manager must also take into account the rules and principles of the company which may affect the final decision. These factors will limit the solution of the problem. One company may have a policy of buying goods only from home suppliers; another firm might, on principle, be against making special payments to secure a contract; many enterprises have a rule that managerial positions should be filled by their own staff, rather than by hiring outside personnel. Rules and policies like these act as constraints, limiting the action of the decision-taker.

Специальность ЭУС IV семестр (6-летки)