Attaining Sustainable Organizational Growth and Profitability
In any business enterprise decisions can be made at varying levels in the organization. Managers at all levels in the organization must make decisions on behalf of a company. The difference between decisions at the various levels, typically, lies in the type and scope of the decision or choices made. Decisions of long-term scope and strategic in nature affecting the competitiveness of the company as a whole belong to highest management levels. Decisions affecting day-to-day operations fall to managers of function, department and line areas.
Decision Types and Scope
In the course of their daily responsibilities and activities people in organizations face a range of decisions. These decisions can be categorized into four (4) dimensions (or types) based on factors such as: the level of control of outcomes, and performance. These factors define a framework/structure useful in categorizing managerial decisions such as:
The quality of decisions and decision-making can be improved substantially, if before making any decision, the decision-maker is aware of the type of decision needed pursuant to the issue and problem at stake. For routine judgments and choices, where we cannot influence outcomes and need not consider the competition, decision-makers can benefit from knowledge of well-known lessons about avoiding common biases to make good sense and result in good decisions.
Management Levels and Decisions
In the course of their daily responsibilities, managers face a range of decisions that are consistent with their position and roles in the organization. All management decisions can be related directly or indirectly to broader management functions: planning, organizing and staffing, leading, and controlling; with different management levels spending more time on certain functions than on others. Some examples of decisions related to the various levels include:
The decisions fall into the following decision categories: board level and executive management decisions are strategic in nature, middle management decisions at the business functional areas such as marketing, finance, etc., are tactical in nature; and line management decisions in the functional areas as well as operations are operational in nature.
Decision Rights and Authority
Decision rights are a component of organization design. They identify what business decisions need to be made, both to drive the business and to drive alignment to strategy; who is involved in making them and how they will be made through operating processes.
Decision authority is the, power or obligation to make a decision and the duty to answer for its success or failure. There are six (6) common types of Decision Authority, including:
Identifying and defining decision rights helps companies to organize their decision making and execution processes by setting clear roles and accountability, and by giving those involved a sense of ownership of decisions.
I am a computer scientist by education and training. My interests are in modeling complex business and social systems to foster better strategic and operations management processes in delivering value to customers while meeting the expectations of stakeholders.