Managerial Decision Making Process Commerce Essay

Published: Last Edited:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

Do you ever know that information technology tools for knowledge workers use the decision support system or abbreviated as DSS to base their design system. Meanwhile, decision making from another point of view makes fundamental in management to operate an organization without turbulence. The broad usage manifests the importance of decision making at any field. Basically, decision is a choice made from addressable alternatives. People in common think that make a choice means all for decision making, but in fact it is only a part of it. (n.d.) defines the decision making is the thought process of selecting logical choice from the available options. As far as we are concerned, there are two categories of management decisions: programmed and non programmed. Programmed decisions deal with situation that occurs frequently and able to seek the suitable solutions to be developed and used in the future. In contrast, non programmed decisions face to a new, unique, hardly to be defined and complicated situation in which the decisions are contradicting to be made. As elaborated by Daft (2012), although decisions are differentiated as programmed and non-programmed, in a typical manner the decision making process still runs through the six ordinary steps, which are acknowledgement of decision requisite, diagnosis and analysis of factors, advancement of alternatives, option of desired alternative, execution of selected alternative and, appraisal and feedback.

To begin the process, Ricky (2012) claimed that the first step in rational decision making is recognizing that a decision is necessary. Problems in an organization would incur when their real achievements do not meet to the goals set. Here comes to managers where they put through their paces to understand thoroughly what the problems are, its causes and relationships to other factors. Samuel, Anthony, and Brian (1995) stated that "managers must be first acknowledging the fact that a problem has arisen". Sometimes, managers' intelligence can be seen clearly at this stage because some of them could even treat and turn the problems arise as another potential opportunities which can be applied to develop the organization's performances. This reflects that problem and opportunity always lies at the same boundary, it depends on how the managers in touch to cope and take over it. So, to take cognizance of the arising problems or opportunities make the very first pace in this stage. Managers have to determine in a profound way whether the organization has reached the satisfactory level in order to progress the established goals. Normally, there always needs a stimulus or spark to initiate a process, acknowledging decision requisite however requires great effort to comprehend because it might appear without any prior warning in many situations.

As illustrated in Diagram 1, the second step in the managerial decision making is diagnosis and analysis of factors. In the organization, so called internal environment, and the external environment, the underlying causal factors need to be diagnosed and analysed at this stage. The relationship between the state within internal environment and external environment in the field of management, technology, resources, and policies principles is known as strategic gap (Harrison, 1996). From the aspect of management, the strategic gap can perceive the strengths and weaknesses of the organization because they affect directly and indirectly to each other. If the organization does not have the capability to deal with any problems that arise from the external environment, it makes the hidden threats exist in the organization visible and therefore it could be located. Diagnosis needs to be done by finding out the reasons for the presence of those menace, like questioning when, why, how and so on to clarify the weaknesses of the organization. After examining the existence of causes, managers have to analyze them from every angle of view to prevent any unnecessary mistakes or careless which would probably threaten the organization and bring about indeterminate effects. So, analysis needs to and must be carried out cautiously because any careless ignorance may turn the feasible alternatives into useless one.

Next, advancement of alternatives stands out immediately after the previous step in managerial decision making. More potential alternatives or choices can be generated (Malakooti, 2009). An experiment which has been done by Malakooti revealed that higher number of the choices will produce higher quality of the alternatives. To further develop the alternatives, brainstorming is one of the methods that can help in because it forms groups to interact in each other's presence and gives freedom for them to suggest a wide range of alternatives for decision making, no matter how out of sense is the idea. In fact, the development of alternatives can be looked through in two ways, which is from the aspect of programmed and non programmed decisions. In programmed decisions, the executable alternatives are noticeable and usually obtainable from the regulations and operation systems of the organization. While, the situation is more difficult to deal with in non programmed decisions because it requires a brand new idea and action which cannot refer or detect from the past experience. The workable alternatives have to be penetrated completely and absolutely to find out the one that can really responds to the situation needed and rectifies those underlying causes.

The subsequent measure in managerial decision making is the option of desired alternative. When workable alternatives are germinated, one must be selected and how is it being chosen mainly depends on the responsible managers. Managers are likely to adjudicate based on the overall goals and values of organization because the best alternative always best fits in essence and can be achieved using fewest resources. This is similar with the propose of Ingram (n.d.) that managers weigh the pros and cons of each potential solution, seek additional information if needed and select the option they feel has the best chance of success at the least cost. However, there is no any particular skill that managers must possess to do selection and they usually make choice by relying on their own intuition and experience to estimate the success or failure of the chosen alternative. "Intuition is a highly complex and highly developed form of reasoning that is based on years of experience and learning, and on the facts, patterns, concepts, procedures and abstractions stored in the decision maker's head" (Matzler et al. as cited in Tichá½±, Hron & Fiedler, 2010, p. 554). Intrinsically, they would choose the one with the least risk and uncertainty among the alternatives to gauge prospects for success, where their personality factors matter. Their own intensity on risk propensity ought to influence the analysis of costs and benefits to be deduced from any decision.

After the selection of desired alternative, the managerial decision making proceeds with the implementation of chosen alternative. It is important to note that a decision that is not implemented (resourced, funded, acted upon, ... ) will not generate the desired future result (Decision Innovationâ„¢, n.d.). In order to make sure chosen alternative is carried out, managerial, administrative, and persuasive abilities are used in this stage. This step is almost the same as the idea of strategy execution. Strategy execution is defined as the practice of bringing a strategy to fruition (BTS, n.d.). The decision is considered success when it has been translated from an abstraction into an action in reality. Sometimes, the lack of resources or energy needed in an organisation may cause managers fail to transform the chosen alternative into an operational reality. Managers require to discuss the implementation with people influenced by the decision because they should know about the implications of making the decision in ensuring a successful result. Communication, motivation, and leadership skills are important in carrying out the decision. Among these skills, communication skill is more important because it helps to improve the relationship between managers and employees, minimising resistance so that they are more loyal and willing to involve in positive action.

Appraisal and feedback is the last while significant step that must not be neglected in the managerial decision-making process. This decisive stage helps in collecting information concerned to the results of implemented decision and its efficacy to accomplish organization's goals. Managers evaluate the outcomes of the decision made in order to recognize if any problems arise and thus try to find a better solution. The upshot of decision, somehow is unpredictable and in case of failure incur, managers have to generate new analysis of problem, evaluate the alternatives and do again the selection among alternatives. Since making decision is risky, feedback and follow-up is required to get organization back to the right path. The function of follow-up and control is intended to ensure that the implemented decision has an outcome coincident with the objectives that gave rise to its occurrence (Harrison, 1996). Feedback is crucial because it is a part of monitoring which indicates the results of the executive decision, and resolves to whether a new decision needs to be made. It would probably induce a new decision style among managers.


BTS. (n.d.). What is Strategy Execution?. Retrieved November 8, 2012, from (n.d.). Decision making: Definition. Retrieved November 2,

2012, from (n.d.). The Decision‐Making Process. Retrieved October 19, 2012, from:,articleId-8863.html.

Daft, R. L. (2012). New era of management. China: China Translation & Printing Services Limited.

Decision Innovationâ„¢. (n.d.). Decision implementation - get the desired results during

the manage step: Decision implementation - managing consequences. Retrieved

November 11, 2012, from

Harrison, E. F. (1996). A process perspective on strategic decision making [Electronic

version]. Management Decision, 34(1), 46-53.

Ingram, D. (n.d.). What are the steps in the decision-making process of a manager?.

Retrieved October 24, 2012, from

Malakooti, B. (2012). Decision making process: Typology, intelligence, and optimization.

Journal of Intelligent Manufacturing, 23(3), 733-746. Retrieved from


Ricky, W. G. (2007). Fundamentals of management. United States, America: Houghton

Mifflin Company.

Samuel, M. N., Anthony, F. L., & Brian, M. R. (1995). Decision-making process: The

key to quality decisions. American Journal of Management Development, 1(4), 5-

8. Retrieved from

Tichá½±, I., Hron, J. & Fiedler,J. (2010). Managerial decision making-importance of

intuition in the rational process. Agric. Econ.-Czech, 56(12), 553-557.