What is Managerial Decision Making? Describe Managerial Decision Making Processes in Detail.

managerial decision making process

What is managerial decision? 

managerial decision

Any decision regarding the activities of the firm. These decisions include setting target growth rates, hiring or dismissing employees, and deciding which products to sell.

What is Managerial Decision Making? Describe its Processes in Detail.

The process of making managerial decisions is not as simple as people might think. Managers need to analyze each and every aspect of the business before reaching a decision. All activities and management of the organization depend on the effective and logical decisions of the agency authorities.

In general, everyone who is not familiar with the concept of management decision making and its process wants to know about the current trends in globalization, entrepreneurship, and the current uses of the e-business world.

There are a few basic questions such as what is decision making and what is decision making that can clear the concept of the initial concept of decision making and lead to the concept of managed decision making in the end.


In most cases, a decision is known as a specific choice of different options to solve a specific problem or address a specific challenge.

Decision making

Decision making is defined as the process of finding or identifying a specific problem / opportunity to solve it professionally in a legal and logical way. Moreover, it can also be said that decision making is the preparation of practical steps.

The concept of management in Managerial Decision Making

Decision making in management is known as a cognitive process, which results in the collection of sets of activities from the current multiple options. The decision-making process at one stage is the process that is performed by each person on a daily basis; No one can deny that.

About business, decision making is a regular process or just a habit. Making managerial decisions is one of the most complex processes in any organization. Successful and effective decision making yields profitable results, whereas unsuccessful decision making does a great disservice.

It is possible to use a number of tools and techniques throughout the process, as the management team will have to make a beneficial decision from one to many. There are also several perceptions that can help identify and solve any problem.

Additionally, some directors prefer to make their own decisions or prioritize joint decisions. Since decision making is a difficult process, it sometimes involves the dissatisfaction of the other party. To avoid all major conflicts and obstacles in decision making, managers should follow a professional decision-making process. The complete process of managerial decision making is given below.

Managerial Decision Making Process

The decision-making process includes the 8 key and substantial steps that follow. Different strategies and tools can be covered in each step. The main steps are objective identification, data collection, alternative judgment policies, choice analysis and mesmerizing, alternative evaluation, opt-in selection, decision implementation, and evaluation results.

Step 1: Identify the decision

Step 2: Gather relevant information

Step 3: Identify the alternatives

Step 4: Weigh the evidence

Step 5: Choose among alternatives

Step 6: Take action

Step 7: Review your decision, & 

Step 8: Review its consequences.

Objective identification

In problem identification steps, the problem is thoroughly analyzed to find the root cause of the problem and the potential damage. In case of problem identification, the following questions may provide adequate assistance.

What's the problem?

Why should this be solved?

Which parties are affected by it?

Problem deadline or deadline?

Asking these questions to yourself will ultimately look for the problem, its impact, the affected parties, and potential harm in the future.

Data collection

The main target of the problem may be one or all of the shareholders. On the other hand, it may involve a number of factors that may affect it. The information should be collected thoroughly to keep a close eye on the problem, which is related to the shareholders or elements involved.

Strategies and tools like "check sheets" can help a lot in data collection steps and can be used effectively and efficiently.

Alternative judgment

Setting baseline criteria to properly judge the final focus options of this step. Regarding criteria, corporate culture and organization goals should also be considered. For example, profit is the only and most important factor of every organization and an important factor to consider when making decisions.

Something should not be done that can reduce profits unless there are exceptional cases that cannot be resolved without sacrificing a small profit. Excluding this, the baseline criteria should include the whole relationship of the problem.

Analyzing the Choices and Brainstorming

The brain lists all the ideas and ways to solve the problem. First, it is necessary to understand the possible causes of the problem and to classify them in the order of priority as the least effective cause. The cause-and-effect diagram and pareto chart tools can provide much-needed support in this step.

The cause and effect diagram will help the management team identify the specific causes of the problem, where the perito chart will play its role in classifying them from their maximum impact and identifying the dimensions of the causes. After that, further steps can be taken to create all possible alternatives to the problem.

Alternatives ’assessment

After performing logical and professional steps, the latter is to use its own judgment with judgment power based on decision-making skills and experience. Look for the advantages and disadvantages of each option and ultimately evaluate them on the basis of what seems to be more effective than the rest. It can also give efficient output compared to different options.

Choose the best option

After following the steps 1 to 5 above, this step is very easy. Perhaps, one can find the best option even after comparing the advantages and disadvantages of different options, but one should be 100% confident and sure to choose the best possible option.

Execute the decision

The second final step in the decision-making process is to transform the decision into a plan and give it a practical shape that contains a sequence of executions. This can be done alone or with the help of the management team.

Evaluate the results

Now that each step is executed and the decision is converted into a plan, ultimately, the outcome of the decision needs to be evaluated which will help the team of managers learn from the problem and prepare for the future. Also, it is best practice to improve management decision making.

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