Levels of management decision making
Managers are defined by their decisions. Using good judgment and being objective is essential to making excellent decisions. Wise decisions impact companies, employees, profit and the success of managers. While decisions are made by all levels of management, critical decisions are made by top management.
It is important to obtain feedback from other managers when considering what decision to make and when to make it. Making the right decisions is part of good leadership.
Top Management's Critical Decisions
According to the Free Management Library, managers should approach decision making in an organised manner. Top managers in a company include the board of directors or a chief executive officer; these executives make critical company decisions related to the corporate strategic planning and organizational development of the company.
These top managers may decide how to handle a major crisis and what product to launch or manufacture.
They also identify competitors, create a corporate vision for the company, decide on mergers and acquisitions, develop budgets and set long-term goals. Jerry Yang, the former Chief executive of Yahoo!, was criticised when a £29.0 billion acquisition bid from Microsoft failed under his watch. A CEO of a large organisation may decide to work undercover within his own organisation as an entry level employee to conduct a comprehensive objective analysis of his company's strengths and weaknesses.
Middle-Level Management Decisions
Most non-critical decisions are delegated to middle level management. Top management relies heavily on middle management to make the right decisions. An effective leader allows his management team to make decisions without micromanaging them and fully supports their decisions. Middle management may handle tactical decisions, oversee the regional market and decide how to meet the company's short-term goals.
Middle management decisions might include marketing a new product, communicating with and managing lower management and determining what issues need to be addressed with top-level managers. Each individual middle management department develops a strategy to meet its inner-departmental goals.
Lower-Level Management Decisions
According to the U.S. Small Business Administration, common decision making mistakes occur when a manager only hears or sees what she wants to.
Operational decisions affect daily tasks and are generally handled by lower-level management. Lower-level managers should identify what impact their decisions will have on themselves and others.
Supervisors or team leaders may decide employee-related issues, such as pay rates, training, evaluations, raises, overtime, promotions, hiring and disciplining or terminating employees. A supervisor at this level may decide to reward the most productive employee with an employee of the month award, or offer incentives such as movie tickets or gift tokens.