Management Decision Making – How Do Managers Make Decisions?

From TheManager

Questions from Our Readers – Empowering Your Team to Make Decisions

In response to our recent post regarding empowering your team to make decisions (to read that post, follow this link), Olzhas writes:

How do managers make decisions? How might they make better decisions? How do job satisfaction and organizational commitment affect an individual’s behavior at work? And how can these attitudes be changed by effective managers?

Olzhas has posed some of the toughest questions facing both new and seasoned leaders, so we think it’s best if we attack these one at a time…

How Do Managers Make Decisions?

The quick answer: leaders just do. Managers who’ve yet to achieve true leadership have a tough time making decisions for a number of reasons including: analysis paralysis; fear of failure; fear of success; fear of ridicule; and others.

Leaders, on the other hand, have no problem making decisions. They would prefer that their subordinates made the bulk of the decisions, but they’re ready to step up and make decisions when warranted.

True leaders do not worry about how their decisions – right or wrong – might reflect upon themselves; they are only concerned with the welfare of the organization and their team. The bottom line on decisions: leaders stand behind their decisions and the decisions of their subordinates.

How Might They Make Better Decisions?

This is the Holy Grail of management: how to make better decisions. There really is no better change a struggling manager can make than one that affects their ability to make sound decisions. So how does a manager begin making better decisions? To answer this, let’s look briefly at why managers make bad decisions.

While selfishness, pride and an overactive ego all lead to bad decisions by sub-par managers, well-meaning managers most often make poor decisions because they consider too much input; too much data.

The best decisions I’ve ever made as a leader were those decisions where I considered just one outcome: how does this decision affect the goal?

What is the goal? If your company is a for-profit entity, then the goal is simple: make money for the owners. When you weigh every decision against this goal, the choices become easy. Does doing “A” take me closer to the goal? If so, then do “A;” if not, then don’t.

I understand this may sound too simple to most managers. The argument I often hear is that decisions aren’t always black and white – they aren’t always this easy. I challenge you to consider the last ten decisions you were faced with at work. I would be shocked if fewer than nine of these decisions could not have been weighed against the goal to deliver a desirable outcome. In fact, if even one of these decisions was too complicated to be weighed against the goal, then you probably over thought it.

Remember the goal and you’ll always make sound decisions.

How do Job Satisfaction and Organizational Commitment Affect an Individual’s Behavior at Work?

Thanks for the softball, Olzhas. Let’s look at Job Satisfaction and Organizational Commitment separately.

What makes a job satisfying to one individual could be vastly different than what makes it satisfying to another. That said, true job satisfaction for any employee can be influenced greatly by just a few factors. These factors include how well they like and respect their direct supervisor, how much they believe in their company’s mission, how much impact they feel they have on the company’s success, and (to a much lesser extent) how well they are compensated.

Obviously, those with high job satisfaction are also more productive and they exhibit more desirable behavior. Providing your charges a sense of worth, coupled with respect, can greatly increase both their individual job satisfaction as well as their behavior.

While they don’t have to go hand-in-hand, job satisfaction and organizational commitment are generally closely aligned. (I’m going to assume that Olzhas asked about organizational commitment from the viewpoint of individual commitment to one’s company.)

An employee can have high job satisfaction, yet not be committed to their organization – this is especially true when their sense of satisfaction comes from a higher than deserved salary or a lack of management oversight. Likewise, someone truly committed to their company could have very low job satisfaction if they happen to love what they do, but they hate their direct supervisor. In either of these examples, the individual’s overall behavior would tend to be less than desirable.

How Can These Attitudes be Changed by Effective Managers?

Effective is the key word in this question. Effective managers are called leaders, and leaders naturally work toward changing the attitudes of their teams through their words and their actions.

By first empowering your team to make decisions (and this means letting them fail) and then making sound decisions where necessary, leaders have a significant impact on the attitude, culture and effectiveness of any organization. It doesn’t matter if you’re leading a group of executives or assembly line workers, everyone needs to feel respected and appreciated. Allowing those closest to the issues (and customers) make the decisions can positively impact any organization.

Given the current economic meltdown, I wonder how Lehman and others in trouble would have fared if the front-line employees, and not Richard Fuld and the other egomaniacal CEOs, had made the bulk of the decisions. Would we be facing the kind of calamity we face today?

From TheManager