UNIT 2 _ Business Management and the Decision Making Process PDF
Document Details
Uploaded by StrongestIodine
UAX
Tags
Summary
This document contains lecture notes on business management and the decision-making process. It covers topics such as the management of a company, management levels, basic functions of management, management roles, and different types of decisions.
Full Transcript
TOPIC – 2 Business Management and the Decision Process In this Unit we will develop the basic functions of management, planning, organization, management of human resources and control of the results achieved. To carry out this task, managers need a set of skills to effectively perform the differen...
TOPIC – 2 Business Management and the Decision Process In this Unit we will develop the basic functions of management, planning, organization, management of human resources and control of the results achieved. To carry out this task, managers need a set of skills to effectively perform the different managerial roles. Nor can it be forgotten that management's essential mission is to make decisions of all kinds and nature, to ensure that the company achieves the objectives established by senior management. TOPIC 2. Business Management and the Decision Process 1. THE MANAGEMENT OF THE COMPANY: MANAGEMENT LEVELS AND HIERARCHIES 2. BASIC FUNCTIONS OF MANAGEMENT i. PLANNING ii. ORGANIZATION iii. HUMAN RESOURCES iv. CONTROL 3. MANAGEMENT ROLES i. THE DECISION: PROCESSES AND TYPES ii. THE DECISION PROCESS 4. TYPES OF DECISIONS 2 In this unit the objectives are: Know the concept of management, management levels and hierarchies with its most important characteristics. Differentiate direction and management and the different hierarchical levels. Know the four basic functions of management. Know the concept of planning and identify the phases of the planning process. Know the concept of organizational structure and identify the 5 components that form it. Know the concept of human resources management. Know the concept of control its characteristics and types. Identify the different roles and management skills. Know the concept of decision its types and the process in decision making 3 What does Business Management really mean? The administration or MANAGEMENT of the company is a continuous process in which all material and human elements of the company must be coordinated within an environment, to achieve objectives. I suggest you watch this video: It explains the challenges that management faces when addressing environmental analysis within the framework of strategic analysis of the company and the useful tools for 4 Environment Analysis vs. Organization and business strategy To achieve these objectives we differentiate four Management Functions: PLANNING Business CONTROL ORGANIZ Managemen ATION t functions HUMAN RESOUR CES MANAGE MENT 5 1.THE MANAGEMENT OF THE COMPANY: MANAGEMENT LEVELS AND HIERARCHIES The management of the company is made up of two levels of action. 1. Directors is the first level of action, whose function is to establish the company's long-term objectives and monitor their compliance. 2. Management is the second level, which establishes how to achieve the objectives set by management, through sub- objectives or intermediate objectives. Its performance therefore depends on the directors to report to. 1. THE MANAGEMENT OF THE COMPANY: MANAGEMENT LEVELS AND HIERARCHIES In practice there is a chain of intermediate and final objectives Objetivo Objetivo Objetivo Objetivo 1. THE MANAGEMENT OF THE COMPANY: MANAGEMENT LEVELS AND HIERARCHIES In practice: There is a chain of intermediate and final objectives Objetivo Objetivo Objetivo Objetivo Objetivo Objetivo Alcanzar Lider en Liderazgo en LATAM Colombia en 5 años 1. THE MANAGEMENT OF THE COMPANY: MANAGEMENT LEVELS AND HIERARCHIES Two classifications of managers can be established: 1. Based on the Organizational Pyramid 2. Depending on the management scope 1. Based on the Organizational Pyramid The organizational pyramid establishes the different relationships superior - subordinate that determines the hierarchy of the company. It arises from the vertical differentiation of the organizational design. The organizational design also establishes horizontal differentiation, in departments, depending on the different tasks performed by the workers. Components of an organization and managerial levels: Organizational pyramid Top or Senior Medium Level First line Head Management / Management Directors Division / Function Position Upper/Narrow part Central part lower and wide part Mission Setting long-term objectives They translate the guidelines from Transmitting the orders from involves analyzing the general top management and specify in middle-level managers to and specific environment in plans the actions their team needs the workers and monitoring which the company operates to undertake to achieve the their job performance." objectives. They allocate resources within their area of responsibility Uncertainty High uncertainty. Complex, Moderate uncertainty, it will Low uncertainty: Known and unknown problems, changing depend on their proximity to top non-complex problems for environments management." which a solution is already established Type of Non-structured decisions Decisions with intermediate Programmed decision- structure, depending on their making: Routine and decisions position in the organizational repetitive hierarchy Background Human, conceptual, and Human and technical Technical competencies technical competencies competencies within their field and human skills to lead a large number of people. 1. THE MANAGEMENT OF THE COMPANY: MANAGEMENT LEVELS AND HIERARCHIES Two classifications of managers can be established: 1. Based on the Organizational Pyramid 2. Depending on the management scope 2. Depending on the management scope Functional managers: they are mid- level managers and their scope of action is focused on a functional area or subsystem of the company (production, finance, marketing, etc.). They are in charge of managing their area and maintaining the necessary relations with the rest of functions to achieve the general objective of the company. General managers: they belong to senior management and, unlike functional managers, their scope of action is not a specific area, but their decisions are of a general nature since they affect the entire company. 11 1. LA DIRECCIÓN DE LA EMPRESA: NIVELES Y JERARQUÍAS DIRECTIVAS https://b.se-todo.com/doc/5928/index.html?page=2 12 2. BASIC FUNCTIONS OF MANAGEMENT Remember: The administration or management of the company is a continuous process in which all the material and human elements of the company must be coordinated within an environment to achieve certain objectives. To achieve these objectives we differentiate four Management Functions: PLANNING Business CONTROL ORGANIZ Managemen ATION t functions HUMAN RESOUR CES MANAGE MENT 13 2.1 Planning The planning function is a managerial process that encompasses everything from defining objectives to designing strategies to achieve them, as well as allocating the necessary resources to undertake the appropriate plans and activities (Steiner, 1979) La función de planificación es un proceso directivo que abarca desde la propia definición de los objetivos, hasta el diseño de estrategias para alcanzarlos así como la asignación de los recursos necesarios para acometer los planes y actividades oportunos. (Steiner, 1979). The effects of planning on the organization are as follows: Facilitates control: By developing action plans, the company determines the objectives to be achieved, which serve as a starting point for analyzing possible deviations from The planning function the actual values and the establishment of in the company corrective measures. includes the objectives Promotes internal cohesion among to be achieved and the participants in the organization who are plans that determine aware of the plans and the company's the lines of action to strategy. be followed and the resources to be used Facilitates changes: It is an instrument that 14 The phases of the Planning process (Cuervo 2001) 1. Problem Identification. Proper planning begins with an analysis of the current situation 7. Control y and future forecasts that may affect the company. Revisión de 2. Internal and external factors affecting the los Identificar company should be analyzed (SWOT analysis). resultados y evaluar vs. el 2. Specification of Objectives. The company 6. Planificar y Objetivos. problema ejecutar las must set its objectives and break them down into actuaciones 1. 3. Reunir sub-objectives based on the previous analysis. que se han Plantea datos para decido llevar a 3. Determination of Planning Assumptions. cabo. r analizar el OBJETIV problema Restricciones 4. Establishment of Alternative Courses of OS internas Action. Possible alternatives that could be 5. Utilizar las SMART herramientas 4. Considerar pursued to achieve the established objectives are apropiadas ideas y opciones identified. para decidir diversas entre las 5. Evaluation of Alternatives. Different diversas alternatives need to be evaluated to facilitate opciones their subsequent selection. Restricciones 6. Selection of the Best Possible externas Alternative. Based on the previous evaluation, the best alternative must be chosen. 7. Budgeting. The chosen plan is then 15 Problem identification through SWOT analysis In problem identification, a commonly used tool is the SWOT analysis of the company. SWOT analysis (also known as SWOT) involves assessing both the internal and external situation of a company at a specific point in time This analysis is very useful for 1. Determining a company's strategies. 2. Identifying its weaknesses and attempting to improve them. 3. Discovering its strengths, enhancing them, and focusing communication efforts on highlighting them. 4. Understanding the growth opportunities offered by the market. 5. Anticipating potential market threats, being prepared, and having an action plan in place to mitigate their possible impact on the company's performance Os Sugiero a verlo con este video en 5 minutos: 16 https://www.youtube.com/watch?v=cCUWrNbBEOc Setting up alternative courses of action In practice, SWOT analysis allows for the development of four types of strategies: For example: FO Strategy (Offensive - Exploit): Utilizes We have to decide which strategy we will use internal strengths to leverage external to surpass our competitors. For this, the opportunities. company can choose between two main DO Strategies (Adaptive - Seek): Aims to strategies: overcome internal weaknesses by taking 1. Differentiation: Attempt to make their advantage of external opportunities. product be perceived as unique by FA Strategy (Defensive - Confront): Utilizes customers and thereby increase its the company's strengths to prevent or demand. reduce the impact of external threats. 2. Cost leadership: Aim to produce at lower DA Strategy (Survival - Avoid): Involves costs than competitors to offer a cheaper defensive tactics with the goal of product and increase its demand. mitigating internal weaknesses and avoiding external threats. 17 Specification of Objectives PURPOSES, CORPORATE OBJECTIVES, BUSINESS STRATEGIES, AND TACTICS Mission, Vision, Values = Strategic The figure illustrates the links between the Thinking different stages in goal and objective Mission statements describe the overall setting purpose of the organization, the reason for its existence. Meanwhile, vision is the guiding reference to what one wants to achieve in the future or what the company wants to become based on its current actions. Mission and vision are declared simultaneously and should be consistent with each other, as both pursue the same ultimate goal. The core of a company's activity is expressed in its strategic objectives and corporate plans. Corporate objectives encompass everything and are designed to provide 18 SMART Goals S: Specific (Específico) "To reach a specific destination, we must have chosen the best route”. The same applies to objectives. We can't simply say, “we want to grow on social media” for example. In this case, we should 'precisely define what we need to grow on social media. Measurable (Medible) Our strategy will be of no use if we cannot measure its success afterward. Continuing with the previous example, we can use a tracking app to determine how many followers we have gained from the marketing campaign we launched Achievable (Alcanzable) We must have a clear understanding of the internal and external situation of the company and set a realistic target. If we've just started, aiming to reach 1,000,000 followers right away would be an unattainable figure. R: Relevant (Relevante): Do our social media objectives truly contribute to the day- to-day operations of the company? Perhaps our current focus lies elsewhere. For example, if we have high production costs, our priority for greater profitability might be to reduce those costs. T: Time-Bound (Temporal): Objectives always need to be achieved within a specific 19 Evaluation of alternatives and Selection of the best alternative According to Freeman, “the Once the different alternatives have been presented, it survival and success of a is time to evaluate and choose among them: company depend on the ability EVALUATE THE ALTERNATIVES: Assess their expected of its managers to create outcomes and the expectations of various enough value and satisfy the stakeholder groups. interests of each stakeholder Select while managing potential conflicts of interest group, in order to ensure their among stakeholders continued participation in the company." STAKEHOLDERS' VISION: EXECUTIVES VISION OF VALUE CREATION FOR SHAREHOLDERS LONG-TERM APPROACH Management has Shareholders will demand that the two types of objectives based on results: company creates SHORT-TERM VALUE FOR Financial objectives, which refer to SHAREHOLDERS. revenue volume or profit margin. They seek to maximize the value of Strategic objectives, including prestige, their shares within a specific period, power, job security, product prioritizing short-term profitability over differentiation, or leadership." long-term strategies. Each investor has a different risk profile and a target return requirement based 20 Budgeting The BUDGET will be the What resources do we numerical implementation of have? What resources the business policies derived do we need? from the corporate strategy The execution of the budget is not an isolated process; it is the extension of the prior work in the Strategic Plan The economic plan: The combination of the Operations Plan and the Investment Plan. The financial plan: Cash Flow Plan and Necessary Financing. Translate everything into the Annual Budgets. Monitor deviations and address their root causes. Flexibility and adaptation to changes and new circumstances The involvement and commitment of the entire organization are required It is necessary to determine the individuals responsible for the plan 21 2.2 Organization For the proper functioning of the company, it is necessary to divide the various tasks to be performed within the organization and group them into different organizational units or departments. It is also essential to establish the hierarchical line that dictates the superior-subordinate Differentiation of activities: relationships. Differentiation can be horizontal and vertical: Horizontal differentiation is Subsequently, the organization based on the tasks performed, creating needs to establish coordination different departments or areas. Vertical mechanisms between these differentiation establishes superior- organizational units so that the subordinate relationships. company operates as a whole, Integration of activities aimed at achieving its strategic Coordination of the various basic objectives. organizational units: to ensure that the company meets its objectives. To achieve this, coordination mechanisms 22 Organization To truly understand the organizational structure, it is necessary to analyze it in its three dimensions: 1. Formal Dimension of the Structure: This dimension is established by the management and is reflected in the organizational chart. It defines hierarchies, roles, and responsibilities officially. 2. Informal Dimension of the Structure: This dimension refers to spontaneous relationships among organization participants that arise outside the formal structure. It may include unofficial communication networks, personal influences, and connections that are difficult for management to know and control. 3. Real Dimension of the Structure: This dimension encompasses both the formal and informal aspects. It reflects how the organization actually operates in practice, considering both the officially established rules and roles and the unofficial dynamics that influence daily work. We suggest delving deeper into this topic 23 Components of an organization and managerial levels according to Mintzberg The Mintzberg Model, developed by Canadian professor Henry Mintzberg in 1979, is a model for describing the structures and organization of companies. It aims to be a guide for understanding, classifying, and designing the structure of an organization, such as your company. Mintzberg's thinking is based on two key premises: The first one relates to the division of labor. The second one is the coordination of these tasks to achieve defined objectives, whatever they may be. According to his perspective, when defining the organization of a company, a selection of the elements that will comprise it should be made in such a way that there is harmony, consistency, and coherence within the organization Eachitself and in relation organization to its can be structured following different environment. "Configurations." According to Mintzberg himself, there are no organizations whose structure completely corresponds to a Configuration. On the contrary, organizations tend to structure themselves, seeking internal harmony and in relation to their environment, by imitating some of the Configurations without being limited to following only one of them. Components of an organization and managerial levels according to Mintzberg 1) Strategic Apex: This is the top of the The components of an organization, organization and comprises the group of according to Henry Mintzberg, include five individuals at the pinnacle, such as senior main parts, known as "the five parts of executives, who make strategic decisions and organizational design." set the direction of the company. These are: 2) Middle Line: This part of the organization includes middle-level managers who act as intermediaries between the strategic apex and the frontline workers. They are responsible for implementing strategic decisions and managing day-to-day operations. 3) Operating Line: In the operating line, you find frontline workers who perform tasks and activities related to production or service delivery. They are the main workforce of the organization. 4) Support Staff: This group provides support for daily operations and decision-making. It can include departments such as human resources, information technology, and legal services. 5) Technostructure: This is the core of the Components of an organization and managerial levels according to Mintzberg We add a Vamos a verlo en este vídeo de 3m: https://www.youtube.com/watch?v=04STXKe6EpE 6th component to the Organization : Corporate Culture Outsourcing ?? Components of an organization and managerial levels according to Mintzberg Let's check: Does the secretary of the CEO belong to the operating core? Do factory workers belong to the support staff? Do experts who standardize production processes belong to the technostructure? Components of an organization and managerial levels according to Mintzberg Let's check: Does the secretary of the CEO belong to the operating core? No, the secretary of the CEO generally does not belong to the operating core. They are usually part of the administrative support staff. Do factory workers belong to the support staff? No, factory workers generally do not belong to the support staff. They are part of the operating line that performs core production tasks. Do experts who standardize production processes belong to the technostructure? Yes, experts who standardize production processes typically belong to the technostructure. This part of the organization is responsible for analyzing and standardizing work processes and systems in the company. Organizational Charts and Organization Manuals To materialize and make the organizational structure more visible, two tools are used: organizational charts and organization manuals. The organizational chart of the organizational structure represents the different organizational units and their relationships and the various hierarchical levels. Organization manuals provide information about functional relationships. Organigrama Organigrama Organigrama Informativo Organigrama Analítico Funcional Circular Mixto 29 2.3 Human Resources Management Currently, human resources management is crucial for the organization as it deals with the management of the most significant asset for the company, which is human capital HRM (Human Resource Management) is comprised of the following processes: 1. Basic processes: The starting point involves first analyzing the job positions needed by the organization and secondly, planning personnel requirements. Internal sources 2. Allocation / De-allocation processes: The company must Recruitme External align personnel needs with the available human resources (Talent acquisition) nt sources within the company: Personnel selection In the case of needing to expand the workforce, (Job characteristics and candidate profile) recruitment, selection, and onboarding of new Socialization (Integrating the new employee into employees are carried out. the culture and working environment In the case of an excess of personnel, processes like of an organization) Before downsizing (layoffs or temporary suspensions) would (Pre-employment phase) be implemented. Ongoing Ongoing training. Promotions 3. Development and training processes: These processes Internal establish mechanisms to promote the development of the Equi External team. ty (Objective Evaluation) (Appropriate Compensation for 4. Performance processes: Evaluation of job performance. the Position) (Motivation Factor) (Recruitment Factor) 30 Human Resources Management HR processes can be integrated into three interconnected phases Phases (3) Description 1. Basic: This phase begins with job analysis, followed by job planning, recruitment, 1.Recruitment selection, and socialization 2. Allocation / or acquisition De-allocation HRM Process es (4) 3. Training and 2. Employee In this phase, training plans, development retention promotion systems, and talent retention strategies 4. Performance are established 3. Performance Evaluation and Evaluation and In this phase, performance is Compensation Compensation evaluated, and the compensation system for 31 employees is established 2.4 Management Control Function The Control function in company management is crucial to achieving the objectives set by the Management THE MANAGEMENT CONTROL FUNCTION: Management must continuously monitor the Feedback from all organization's results to detect potential deviations from the planned objectives and establish the departments necessary corrective measures to ensure the organization meets its goals. STAGE 1 - Management must establish It should be noted that in Mechanisms: Direct mechanisms to track the some cases, these supervision, co- Measurement of results being achieved measures may generate evaluation, activity Actual (Statistics, Internal Audits, resistance among recording, etc. Performance etc.). employees (interference in Comparing actual values their performance). It is necessary to determine Disregard STAGE 2 - with forecasts and when these measures insignificant Comparison of identifying deviations. should be considered deviations Actual significant or not. Performance Determining measures to Modify the standards if Unattainable STAGE 3- with the bring the system in line with they are deemed standards can lead to Implementation Standard the established standards. unattainable due to demotivation and of Corrective changes in the environment frustration within the Actions or within the organization. team. 32 Management Control Function The Control function can be classified into three types depending on the timing of its execution (according to Robbins https://www.losrecursoshumanos.com/wp-content/ and Coulter, 2000): uploads/2017/03/tipos-de-control-administracion.jpg 1. Preliminary 2. Concurrent 3. Feedback Control: It is Control: It takes Control: It is carried out before place during the conducted after the execution of the completion of implementation of activities or activities or activities or projects to monitor projects to projects to ensure and adjust evaluate the they align with performance in results and established plans real-time and compare them to and standards. ensure it stays in previously line with objectives established and standards. standards, allowing Feedback / Corrective Examples Preliminary / Preventive Concurrent control for corrective The inspection of raw measures if The quality control Quality control systems necessary. of products once materials before their during manufacturing, their manufacturing incorporation into the conducted in the factory.. is completed. production process 33 3. Management Roles Mintzberg identifies 10 managerial roles that can be grouped into three main categories: Mintzberg contended that the role of a TABLE OF MANAGERIAL ROLES INFORMATIONAL INTERPERSONAL CHARACTERISTICS manager cannot be easily categorized ROLES: ROLES: into a neat set of tasks or a) Monitor role. a) Figure-head responsibilities. b) Disseminator role. role. Instead, he proposed that managers b) Leader role. c) Spokesperson c) Liaison role. perform a combination of ten distinct role roles, which can change and overlap depending on the situation and MANAGERIAL organizational context. ROLES CHARACTERISTIC Mintzberg believed that managers often S face ambiguity, uncertainty, and the DECISION-MAKING need to make quick decisions based on ROLES: incomplete information. a) Entrepreneur He emphasized that managers engage in role. a wide range of activities beyond formal b) Disturbance handler role. planning and decision-making, including c) Resource interpersonal interactions, information https://sites.google.com/site/cipaspicma/home/roles- allocator role. 34 Management Roles Interpersonal Roles Informational Roles: Decision-Making Roles This approach should Figurehead Role: This role Monitor Role: Managers in Entrepreneur Role: Managers lead us to reflect on involves ceremonial duties this role collect information in this role are innovative and the prioritization of and social responsibilities. from various sources, both take risks to explore new essential activities in Managers in this role often internal and external, to stay opportunities for the the functions of a represent their organization informed about developments organization. at public events. that could impact their manager to carry organization. them out efficiently. Leader Role: In this role, Disseminator Role: (Upward Disturbance Handler Role: managers are responsible for and downward communication) Managers act as problem leading and motivating their In this role, managers share solvers, addressing conflicts In real life, the 10 teams or subordinates to important information and data and crises that may disrupt the achieve organizational goals. collected from various sources organization's operations. managerial roles within the organization to overlap, and the ensure that everyone is manager must learn informed and aware of relevant issues. to balance them to achieve better Liaison Role: Managers act Spokesperson Role: Resource Allocator Role: In as liaisons or connectors Managers act as the this role, managers make results. between different individuals spokesperson for their decisions about the allocation or groups, both inside and organization, conveying of resources, such as budget outside the organization, to information to external parties allocation, to various projects or facilitate communication and such as the media, activities within the collaboration. government, or other organization. stakeholders. They represent the organization's interests and communicate its policies and decisions.. 35 Management Roles Mintzberg's critical view of managers Mintzberg's critical view of managers challenged the traditional, simplistic notions of managerial work and highlighted the multifaceted and dynamic nature of management in practice. He argued that real managerial work is much more complex and varied than the idealized image of managers often portrayed in management literature. En 2004, Henry Mintzberg published his book "Managers not MBAs." In it, he criticizes business schools worldwide for the content of their management training programs. After analyzing the subjects taught in various MBA programs, he concluded that much of what many executives learn will not help them meet the demands and expectations their companies will have of them. ¿Qué He insists that a manager's intuition, entrepreneurial vision, and opináis experience in managerial roles are the cornerstones of business leadership, and none of these can be taught in a master's program. al Mintzberg argues that management is more of an art than a respecto science, and therefore, systematic analysis or management techniques ? 36 4. Decision-Making Process 8-Step Decision-Making Process to Making the Best Decisions Effective decision making doesn’t rely either on innate talent or on hard-learned experience. “Good judgment is the result of experience and experience the result of bad judgment.” (Mark Twain ). Hiring a new employee, choosing a new supplier, selecting a speaker for your upcoming annual conference, deciding whether to apply for a higher-level position within your company: all of these and many more represent moderately important decisions. The reality is that a first-rate decision-making https://disasteravoidanceexperts.com/8-step- process is both teachable and learnable. You can leadership-decision-making-process-for-making- boil it down easily to an eight-step model for any the-best-decisions/ moderately important decision. Wise decision makers - like yourself - don’t want to 37 simply get a “good enough” outcome, instead, you Decision-Making Process Use an eight-step decision-making technique (this method is battle- tested): 1. Problem Identification: The first step involves recognizing the need to make a decision due to a problem, an opportunity, or a goal. 2. Information Gathering: Relevant information related to the problem or opportunity is collected to better understand it. 3. Information Analysis: The collected data is evaluated and analyzed to understand the implications and potential solutions. 4. Generation of Alternatives: Various possible options or solutions are proposed to address the problem. 5. Evaluation of Alternatives: Alternatives are compared and evaluated based on relevant criteria, such as cost, benefit, risk, etc. 6. Selection of the Best Alternative: The option considered most suitable or effective is chosen. 7. Implementation: The selected decision is put into action. 38 Decision-Making Process Now, on to the model itself: 8-Step Decision-Making Model First, you need to Second, gather Third, with this data Fourth, you develop identify the need to relevant information you decide the goals clear decision- launch a decision- from a wide variety you want to reach, making process making process of informed painting a clear criteria to weigh the Such recognition bears perspectives on the vision of the desired various options of particular weight when issue at hand outcome of your how you’d like to get there’s no explicit crisis Value especially those decision-making to your vision that cries out for a opinions with which process If at all possible, decision to be made or you disagree. It’s particularly develop these criteria when your natural Contradicting important to recognize before you start to intuitions make it perspectives empower when a seemingly one- consider choices. uncomfortable to you to distance time decision is a Our intuitions bias our acknowledge the need yourself from the symptom of an decision-making for a tough decision. comfortable reliance on underlying issue with criteria to encourage The best decision your gut instincts and processes and certain outcomes that makers take initiative help you recognize any practices. fit our instincts. to recognize the need potential bias blind Make addressing these As a result, you get for decisions before spots. root problems part of overall worse decisions they become an the outcome you want if you don’t develop emergency and don’t to achieve. criteria before starting 39 Decision-Making Process Now, on to the model itself: 8-Step Decision-Making Model Fifth, you generate a number of viable Sixth, you weigh these options, options that can achieve your picking the best of the bunch decision-making process goals When weighing options, beware of going We frequently fall into the trap of with your initial preferences, and do your generating insufficient options to make the best to see your own preferred choice in a best decisions, especially for solving harsh light. underlying challenges. Moreover, do your best to evaluate each To address this, it’s very important to option separately from your opinion on the generate many more options that seem person who proposed it, to minimize the intuitive to us. impact of personalities, relationships, and Go for 5 attractive options as the internal politics on the decision itself. minimum. If you get stuck here, or if this is a Remember that this is a brainstorming particularly vital or really complex decision, step, so don’t judge options, even though use the they might seem outlandish or politically “Avoiding Disastrous Decisions” technique unacceptable. to maximize your likelihood of picking the The optimal choice often involves elements best option. drawn from out-of-the-box and innovative (https://disasteravoidanceexperts.com/8- options. key-steps-for-effective-leadership-decision- making-to-avoid-decision-disasters/) 40 Decision-Making Process Now, on to the model itself: 8-Step Decision-Making Model Seventh, you implement the option you Eighth, you evaluate the implementation of chose the decision and revise as needed For implementing the decision, you need to As part of your implementation plan, develop minimize risks and maximize rewards, since your clear metrics of success that you can measure goal is to get a decision outcome that’s as good throughout the implementation process. as possible. Check in regularly to ensure the implementation 1) First, imagine the decision completely fails. is meeting or exceeding its success metrics. If it’s 2) Then, brainstorm about all the problems that not, revise the implementation as needed. led to this failure. Sometimes, you’ll realize you need to revise the 3) Next, consider how you might solve these original decision as well, and that’s fine, just go problems, and integrate the solutions into back to the step that you need to revise and your implementation plan. proceed from that step again. 4) Then, imagine the decision absolutely More broadly, you’ll often find yourself going succeeded. Brainstorm all the reasons for back and forth among these steps. Doing so is an success, consider how you can bring these inherent part of making a significant decision, reasons into life, and integrate what you and does not indicate a problem in your process learned into implementing the decisions. (For example, say you’re at the option-generation If you’re doing this as part of a team, ensure stage, and you discover relevant new clear accountability and communication around information. You might need to go back and the decision’s enactment. revise the goals and criteria stages). 41 Types of Decisions Effective decision-making involves carefully considering the process and the type of decision to be made based on the specific situation Programmed Decisions: These are repetitive and routine decisions made following established procedures and rules. They are typically applied to structured and predictable situations. Non-Programmed Decisions: These decisions are made in unique or unstructured situations where there is no clear procedure. They require deeper judgment and analysis. Strategic Decisions: These are high-level decisions that affect the entire organization and its long-term direction. They have a significant impact on the organization's objectives and competitive position. Tactical Decisions: These decisions are made at the intermediate level of the organization and relate to the implementation of previously established strategies and plans. Operational Decisions: These are routine decisions made at the lowest level of the organization and focus on daily activities and operational processes. Personal Decisions: These decisions are of a personal nature and affect an individual's life, such as financial, career, or lifestyle decisions. Group Decisions: They involve the participation of a group of individuals in the decision- making process, which can lead to consensus or a collective decision. Crisis Decisions: These decisions are made in emergency or crisis situations and typically require a rapid and decisive response. 42 Types of Decisions We can classify the different types of decisions. According to their Nature: According to their degree of According to their Importance: Programming: Functional decisions: These decisions are Routine decisions: These are decisions that Operational decisions: They coincide with related to specific areas or functions within the have been previously established to address routine-type decisions. organization, such as human resources, known problems in advance. They are typically These decisions are made at the lowest level marketing, finance, operations, among others. made by first-line managers. of the organization by employees directly They are made within a department or involved in the execution of daily operations. function and focus on the particular aspects of They focus on managing tasks and operational that area. For example, a functional decision in processes to ensure efficient and effective the marketing department could be related to functioning of the company. Examples of the pricing strategy of a product. operational decisions include shift scheduling, inventory management, customer service, and daily production. Interdepartmental decisions: Often, they Adaptive or incremental decisions: These Tactical decisions: These decisions are made are made to address issues that affect multiple are decisions made by partially modifying a at the intermediate level of the organization, areas. For example, coordination between the routine decision because the type of problem typically by department or business unit sales and production departments to ensure they address is somewhat more complex. managers. They focus on implementing that product demand is met efficiently. strategies and plans previously established by top management. Tactical decisions are related to resource allocation and the management of specific projects to achieve strategic objectives. Examples include department budget management, product planning, and project management. Innovative decisions: These are the most Strategic decisions: These decisions are challenging to make as they have not been made at the top level of the organization, made before and are unstructured, unique, or typically by senior management or the board novel decisions subject to a high level of of directors. They are high-impact decisions uncertainty. that affect the entire company and its long- 43 Check: Routine or programmed decisions are typical of top management. Innovative decisions are characteristic of middle-level managers. Strategic decisions involve a series of tactical and operational decisions. 44 Check: Routine or programmed decisions are typical of top management. (Correction: Routine or programmed decisions are typical of first-line managers or the lower level of the organization, not top management). Innovative decisions are characteristic of middle-level managers. (Correct) Strategic decisions entail a series of tactical and operational decisions. (Correct) 45 Conclusions Today's organizations require highly competitive managers, good strategists, innovators, proactive leaders, true coaches who can effectively manage their resources. They need individuals who can work closely with both superiors and subordinates https://prezi.com/0qbjjauzlhwf/ importancia-de-los-directivos- competentes/ 46