Lecture
In everyday life, at work, and at home, an individual or a group of people very often faces the need to assess a specific situation that has arisen and, if necessary, to make one decision or another aimed at changing it. In this context, a decision is understood as the result of a person's mental activity, leading to some conclusion and the need for action .
In economics, management, and decision theory, the main focus is on so-called managerial decisions. A managerial decision is usually understood as the result of analysis, forecasting, optimization, economic justification, and the selection of an alternative from a set of options for achieving a specific goal of the management system .
Here the term «Managerial decision» (hereinafter MD) is used in two main senses — as a process and as a phenomenon. As a process, an MD is the execution of the following basic procedures: information preparation, development of options, coordination of options, selection of one option, approval, implementation, monitoring of the MD's execution, and informing the initiator of the decision. As a phenomenon, an MD is a set of measures aimed at resolving the economic problem under consideration, given in the form of a resolution, order, or directive, in oral or written form .
From the standpoint of decision theory and the management of socio-economic systems, it is important to clarify a number of concepts and factors that have a significant influence on the procedures for developing, adopting, and implementing managerial decisions .
Objectives. Every MD is aimed at achieving one or several objectives, and the quality and effectiveness of the managerial decision itself depend substantially on how accurately these objectives are formulated.
The regulation for adopting a managerial decision is the approved procedure for developing, adopting, approving, and implementing an MD.
Resources. Every managerial decision presupposes the use of certain material, human, intellectual, informational, or other resources. A correct assessment of the required resources and their quality substantially affects the effectiveness of implementing an MD.
Risks and uncertainties. When analyzing and assessing a situation from the standpoint of developing a managerial decision, it is essential to take into account factors of risk, uncertainty, and incompleteness of information.
Methods and models for developing a decision. At present, economic-mathematical models and tools are widely used in developing an MD, making it possible to model various situations, calculate the consequences of particular decisions, and forecast the development of events, which substantially affects their quality and effectiveness.
Criteria for evaluating a decision. An important factor in choosing a managerial decision is the criteria for evaluating its effectiveness.
Methods for monitoring execution and evaluating the effectiveness of decisions, which substantially affect the final analysis of how successfully a particular MD is implemented.
In view of the above, the following definition of a managerial decision will be used throughout the rest of this textbook.
Definition
By managerial decision is meant the result of analysis, forecasting, optimization, economic justification, and the selection of an alternative from a set of options for achieving a specific goal of the management system, which, as a rule, includes the following components:
In general, for the socio-economic systems in relation to which management is carried out, three elements can be identified that are connected with the adoption and implementation of an MD:
The purpose of the DM's influence on the managed socio-economic system is to ensure for it a state that corresponds to its goal of functioning to a greater degree than its previous state.
The case in which the new state of the system is achieved solely through a change in its previous state presupposes the implementation of the following sequence of actions:
The case in which the new state of the system is achieved through its transformation presupposes the implementation of the following sequence of actions:
The ultimate goal of changing an unsatisfactory state of the system is to move it into a state that ensures the achievement of the goals of creating and/or operating the system. This must be taken into account when constructing all managerial decisions that ensure a consistent, multi-step transition of the system from an unsatisfactory state to an optimal one. At the same time, the goals of the managerial decisions associated with the intermediate transitions of the system from one state to another as the system moves toward the optimal state must correspond to the ultimate goal of creating the system as a whole.
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