by L Hurley

Created on: November 16, 2008   Last Updated: December 05, 2010

Making decisions is what managers do. A surgeon operates, a mechanic fixes cars and a manager makes decisions. Ideally the decisions made by managers create an environment which allows both the business and employees to succeed and grow.

Before any decision can be made a manager must have the authority to do so. Most companies have clearly delegated and documented authorities for making financial and human resource decisions. Day-to-day operational decisions, such as what time breaks will be taken, are usually assumed as part of the role and inferred by responsibilities in the position description.

As managers we are personally and sometimes legally responsible for the effects of our decisions so it is important to understand and stay within the boundaries of our authority. We also want to make good decisions. Good decisions are those that allow the business to grow and employees to develop and succeed.

Good decisions require an element of judgement. A decision made with too little information can have an unexpected and unwelcome outcome. While delaying a decision for too long to obtain all possible information can render the decision ineffective.

The more information we have the better prepared we are to make effective decisions and the less likely it is that we will be surprised by an unforeseen outcome. We need to gather as much relevant information as possible within the timeframe available.

Information can come in many forms. Data provides an excellent basis for understanding trends, analysing and predicting volume, cost and profit but on its own data is not enough. Speaking with subject matter experts and the people who will be impacted by the decision provides context in which the objective data may be viewed.

Once a manager has all the relevant information they need to make the decision it is appropriate to test the effect of the decision against a number of elements.

LEGAL

Does it conform to local and federal legislative requirements? Does it comply with company policy and fit within the terms of the customer contract?

ETHICAL

While unethical decisions may be legal a good decision remains within the ethical code of the company.

OVERT AND EQUITABLE

Is the purpose and reason for making the decision clear to everyone? Have the needs of all parties been balanced as far as is practical?

SENSIBLE

Perhaps the most important element of a good decision is whether it makes sense. The decision will be more readily accepted if everyone can understand the need for it.

PERSONAL STANDARDS

When the decision passes the legal, ethical, overt, equitable and sensible tests there is one final test to be applied. Would you be happy for the decision to be reported in the media or will you be hiding behind closed doors and drawn shades if the outcome hits the news?

Whether the decision is about a staff roster or a major investment in technology it should be based on relevant information, involve input from the right people and have all the elements of a good decision. If it does, go ahead and make the decision, record it and follow through with implementation.

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