What Is Management Decision Making?
Management decision making is choosing a course of action after considering different
options to accomplish an organization’s goals. Management involves problem-solving,
budgeting, coaching, planning, organizing, staffing, controlling. Therefore, the process
that goes into management decision making serves as a continuous, dynamic check
and balance system to steer an organization to sustained success.
Why Decision Making Matters
Making informed, sound, and collaborative decisions can help build a solid organizational
direction and have a favorable impact on costs.
What Is the Decision Making Process?
When making a decision, the following steps compiled by UMass and Dartmouth can
help organize your thoughts and go about decision making more deliberately and
thoughtfully:
Step 1: Identify the decision – Define the problem and determine if a decision is required.
Step 2: Gather relevant information – This step involves gathering internal and external data.
Gather internal information with self-assessment and consider your motivations. Capture
external information colleagues, online, books, and other resources.
Step 3: Identify the alternatives – Identify and list all possible courses of action as they arise.
Step 4: Weigh the evidence – Visualize the possible consequences of taking each course of
action, drawing on your information and emotions. Consider if the situation in Step 1 would
be addressed or solved with each alternative. Rank your possible decisions based upon your
value system.
Step 5: Choose among alternatives – Select the best course of action to take. It may even be
a combination of other options.
Step 6: Take action – Implement your decision.
Step 7: Review your decision and its consequences - Last, evaluate the results of your
decision and determine if it addressed the issue identified in Step 1.
Leadership Styles
Autocratic Leadership
Also known as Authoritarian Leadership, an Autocratic Leadership style can easily be
summed up by the command, “Do as you’re told.”
In Autocratic Leadership, direction comes from the top, a singular figure who leads a
company or team. An autocratic leader determines strategy, policies, procedures, and
the direction of the organization, dictating everything to subordinates. Authoritarian
leaders are not focused on collaboration with those in their circle, they are rarely
interested in feedback, and they prefer to hold all of the power and be in charge.
In Lewin’s research, he witnessed four behaviors and results of the Authoritarian
Leadership style:
1. All determination of policy is by the leader.
2. Techniques and activity steps are dictated by the authority, one at a time, so that future steps or
techniques are uncertain.
3. The leader usually dictates the particular work task and work companions of each member.
4. The dominator is “personal” in his praise and criticism of the work of each team member, but is
aloof from active group participation, except when demonstrating. He is friendly or impersonal
rather than openly hostile.
Examples of autocratic leaders include Martha Stewart, and, New England Patriots
Head Coach Bill Belichick.
Qualities: Autocratic leaders often possess qualities subordinates look up to, such as
decisiveness, self-confidence, and a steadfast, focused commitment to the goal.
When It Works: While Autocratic Leadership and the “Don’t question my
commands” approach doesn’t sound like fun, there are occasions when this leadership
style can be appropriate and effective, such as in urgent or chaotic situations that
require someone to reign in the team and make a prompt and effective decision.
When It Doesn’t Work: Employees working under an autocratic leader may feel
micromanaged, and because all directives come from one person at the top, they may
become dependent on that person for direction and incapable of making business
decisions on their own.
Democratic Leadership
Also known as Participative Leadership, the Democratic Leadership approach involves
gathering input from your subordinates and team members so everyone has a chance
to contribute to the decision-making process. Democratic leaders are still the decision-
makers, but their approach allows others to feel engaged and have a stake in the final
outcome. Democratic leaders excel at sparking creativity among subordinates, and
projects are enhanced when positive contributions come from all sides.
Lewin’s research into the Democratic Leadership style uncovered these four
behaviors and results:
1. All policies were a matter of group discussion and decision, encouraged and assisted by the
leader.
2. Activity perspective was gained during the first discussion period. General steps to group goal
were sketched, and where technical advice was needed, the leader suggested two or three
alternative procedures from which a choice could be made.
3. The members were free to work with anyone, and division of tasks was left to the group leader.
4. The leader was “objective” or “fact-minded” in his praise and criticism and tried to be a regular
group member in spirit without doing too much of the work.
Microsoft Corporation co-founder Bill Gates, Nelson Mandela, and Walt Disney,
President of The Walt Disney Company, are often cited as examples of democratic
leaders.
Qualities: Democratic leaders possess a curiosity that drives their desire for input
from all sides. Their desire for a participative environment also makes them great
communicators, and subordinates often find them easily approachable.
When It Works: A democratic approach to leadership yields positive results when
the group feels part of the solution. This leads to more creative input and often
heightens employee morale.
When It Doesn’t Work: Not every leader achieves success with the democratic
approach. Inevitably, there will be employees who feel left out because their ideas or
solutions were not chosen. Further, placing confidence in the group to posit solutions
can be problematic if the group is not skilled or trained to answer the call.
Laissez-faire Leadership
Don’t let the name deceive you. Laissez-faire Leadership is not a “Who cares?”
approach. Rather, it involves empowering your employees, being hands-off, and trusting
them to accomplish the task at hand without constant questions or micromanagement.
Laissez-faire leaders leave decisions to their employees, while staying available to
provide feedback when necessary.
According to Lewin, Laissez-faire leaders exhibit four common behaviors and
results:
1. Complete freedom for group or individual decision, without any leader participation
2. Various materials supplied by leader, who made it clear that he would supply information when
asked, but took no other part in work discussions
3. Complete nonparticipation by leader
4. Very infrequent comments on member activities unless questioned, and no attempt to
participate or interfere with the course of events
Former U.S. presidents James Buchanan, Herbert Hoover, and Ronald Reagan, as well
as industrialist Andrew Mellon, and businessman Warren Buffet are often cited as
examples of Laissez-faire leaders.
Qualities: Laissez-faire leaders are excellent at delegating, and they instill
confidence in employees when assigning them tasks without oversight. They are
capable of providing constructive criticism when needed, and are often seen as trusting,
as they willingly place responsibilities in the hands of employees.
When It Works: The Laissez-faire approach often leads to faster decision-making,
as employees don’t need to ask a higher up for approval. It is also especially effective in
scenarios where the employees or groups are already trained and skilled for the task at
hand. These workers are fully competent and don’t require supervision, and when
they’re empowered by a Laissez-faire leader, they may feel more accomplished when
they complete their task without a guiding hand or directive.
When It Doesn’t Work: Hands-off can be problematic when your team doesn’t
fully understand the mission. Further, Laissez-faire leaders may find that without
direction or oversight, employees don’t accomplish as much, or anything at all. Unless
you have complete confidence in your employees and their collective ability to complete
a task without close supervision, you may reconsider this approach.
Transformational Leadership
Transformational Leadership involves developing a grand vision and rallying your
employees around it. Under this style, the team is eager to transform and evolve –
personally and professionally – in order to achieve the overall goal. With the
organization and employees aligned, teams working under a transformational leader are
united for the singular cause, and willing to commit their effort, time, and energy to the
organization.
Transformational Leadership Qualities:
1. Understanding what needs to change
2. Ability to stimulate the intellect
3. Knack for encouraging participation
4. Talent for genuine communication
5. Loyalty
6. Sense of the bigger picture
7. Personal integrity
8. An inspiring bearing/presence
When It Works: Transformational Leadership allows employees to see clearly the
vision and goals for the organization, and employees remain loyal and productive while
working to accomplish their mission. Transformational Leadership creates workplace
harmony as everyone is working together, and the lines of communication are always
open between employees and leadership.
When It Doesn’t Work: While a fully engaged and committed group is what
every leader wants, Transformational Leadership has been known to contribute to
burnout as employees work continuously to achieve goals. This approach also requires
constant communication and feedback between leadership and the employees, and if
those lines are severed in any way, the latter can feel left out of the big picture.
