Models of making managerial decisions

The use of a specific model of management decision-making is due to a number of reasons, such as the complexity of the real world, experimentation, orientation to the future.

Before we proceed to the consideration of widely used models, we describe the basic models of making managerial decisions.
· A physical model that represents the object of research by means of its reduced or enlarged description. It is practically a modeled integrity;
· Analog model, which represents the object of research as an analog, whose behavior is similar to the behavior of a real object, but outwardly they do not coincide.

· Mathematical model or symbolic. It uses symbols that denote characteristics or properties of an object.

Modeling is a process, so we will outline the stages of the process of making managerial decisions.
Formulation of the problem. This is the main stage of the model construction, which ensures the correct solution of the management question. The correct formulation of the problem is sometimes more important than solving it. To find the optimal or acceptable solution to a particular problem, you need to know its components. This will distinguish the symptoms from the reasons that each leader should be able to do.
Building a model. This is the next stage. The developer determines the main purpose of the model, as well as output standards or intended to be received, using the model, helping management to effectively solve the problem facing it. Here you need to determine the information required to build a model that would meet these goals and provide the necessary information at the output.
Test the model for reliability. The main aspect of the verification is the determination of the degree of conformity of the constructed model to the present world. It is necessary to determine the presence of all the essential components built into the model, corresponding to the actual situation. Verification often shows that the designed models are not perfect, because Do not contain all the necessary variables. This step is also necessary to establish the degree of reliability of the information obtained by using the model, determining its ability to really help management to solve the problem.
Application of the model. No models of managerial decision making can be considered successful until they have passed acceptance and are not understood and applied in practice.
Update the model. Even successful models of managerial decision-making that have passed through all stages of the process of making managerial decisions need to be updated.
Like other methods and tools, models can cause errors. The efficiency of the model is reduced from the actions of potential errors.

Decision-making is a process, because it is necessary to produce consistently interrelated steps. To solve the problem, not a single solution is used, but various ways of making managerial decisions.

In general, the decision-making process can be presented in five stages, but the actual number is determined by a specific problem.

1. Diagnosis of the problem. There are two options for considering the problem. The problem may include a situation in which the goals are not achieved. The need for making managerial decisions is obvious here, we are talking about reactive management. But sometimes the alleged situation is considered as a problem.

2. Formulation of criteria and limitations of decision-making. When diagnosing a problem, it is necessary to determine what can be done with it. The leader needs to determine the limitations on the way to achieve the result and their alternative.

3. Definition of alternatives. Which should be in sufficient quantity. But each of them must be analyzed in detail and weighed.

4. Evaluation of alternatives. The next step is to select the most desirable alternatives based on the estimate.

5. Choosing an alternative with more favorable consequences.

As practice shows, the methods of making managerial decisions and their quality largely depend on the leader, his mental state.