MHSA Health Care Administration Principles of Managerial Decision Making

Transcription

1 MHSA Health Care Administration Principles of Managerial Decision Making ** The decision making function of management is an obviously essential management function that is accomplished via the execution of all of the other relevant management functions discussed heretofore (planning, organizing, staffing, controlling, directing, etc.). ** Decisions are made every day within the organizational context. Decisions with regard to staffing needs, budgets, organizational structure issues, operational planning, and what to have for lunch (just joking) are just a few of the innumerable examples of these types of decisions. ** What separates or otherwise differentiates managerial decision-making from nonmanagerial forms of decision making is that the managerial decision making forms the basis for explicit management authority within the contemporary bureaucratic organizational structure. Management decisions, by definition, are granted full legitimacy within the organization, the outcomes of which will have some demonstrable impact on the organization and its performance. ** Formally speaking, decision making is defined as the process by which someone chooses a preferred alternative or course of action among relevant alternative(s) and/or alternative course(s) of action by formally evaluating each of the alternatives against one or more defined criteria. ** Types of decisions: ** Ends-Means -- choice of ends (organizational objectives) and the means by which those ends will be accomplished (strategies and programs). ** Administrative-Operational -- administrative-level (policy) decisions that are translated down the organizational chain of command, upon which operational decisions are based. ** Programmable-Non-programmable -- programmable decisions are those that are mostly routine in nature, often circumscribed within the organization's operational policies and procedures. Non-programmable decisions are mostly non-routine in nature. ** It is useful to conceptualize the decision-making function of management as part of the more global approach to management problem solving, whose presumed purpose is to bring about specified changes within the organization to more closely align organizational objectives with organizational performance. Figures 7.2 and 7.4 illustrate a couple of different schematic models of the relationship between managerial problem solving and decision making.

2 ** Approaches to Managerial Problem Solving ** Retrospective -- ex post evaluation/analysis to identify the presumed cause(s) of organizational performance deficiencies. Traditionally the most common approach to problem solving, where problem solving is attempted only after problem has occurred in the first place. Analysis of root cause(s) of said performance deviations is the primary methodological approach utilized in this case. ** Prospective -- anticipatory approach to problem solving that requires the identification of opportunities as well as threats to organizational performance prior to their actual occurrence(s). Requires a significant amount of planning and quality focus to be successful. Historically, not a significantly utilized approach to problem solving. ** Concurrent -- identification of opportunities and threats to organizational performance in real time, and addressing those opportunities and threats as they occur. This is the approach to problem solving that is embodied within the TQM approach to quality/performance management. Fairly commonly utilized approach (especially with respect to QI/PI initiatives) within HSOs. ** Steps in the Managerial Problem Solving Model (Fig. 7.4) (1) Problem analysis -- identification of deviation(s) from performance standards or expectations as specified. The framework employed with respect to problem analysis may be broad (systems approach) or narrow (QA approach). The most critical step in the problem analysis phase involves the ACCURATE identification and definition of the TRUE problem that needs to be addressed and not merely identifying one or more of the symptoms of the true problem. Other tasks conducted as part of this process include the collection of data/information to estimate the magnitude of the problem and/or to further clarify the true nature of the problem to be addressed. (2) Problem Assumptions -- where all of the facts associated with the identification of a problem are not available and/or verifiable, managers make any number of logic-based assumptions about the problem, its presumed significance, its impact on others, etc. Such assumptions may be classified as: (a) structural, which provide the context within which the problem occurs, thereby establishing the boundaries within which subsequent problem solving will take place; (b) personal, where the manager incorporates his or her own experiences and/or biases related to the problem and/or the problem solving process; (c) problem-based, where assumptions are made with respect to the importance of the problem, the urgency of any formulated solutions, etc.

3 (3) Identification of Alternative Solutions -- most typically, any defined problem will be associated with multiple alternative solutions, none of which will have a demonstrable advantage over the others in terms of efficiency, feasibility, etc. At this stage of problem solving, only those alternatives that are clearly not feasible or notoriously inefficient are rejected out of hand. (4) Development and Application of Decision-Making Criteria -- most commonly utilized criteria for managerial decision making among alternatives include the relative efficacy of the alternatives (i.e. will the proposed solution most likely yield the desired results?), the feasibility of the alternatives (i.e. which of the alternatives is most simple to implement?), and the efficiency of the alternatives (i.e. which of the alternatives provides the greatest expected benefit(s) for a given cost, or which alternative costs the least for a given level of benefit(s)?) (5) Selection and Implementation of Preferred Alternative(s) -- this is the step where formal managerial decision-making takes place within the larger problem solving context, and where managers part company from other non-managers involved up to this point in the process. The monitoring of results after such decisions are made is also important in this step of the problem solving process. ** Factors That Influence Managerial Problem Solving and Decision Making ** Managerial Attributes -- the cumulative experience(s), knowledge, judgmental biases, personality traits, and personal values/philosophy will have an affect on a manager's approach to formal decision making within an organizational context. ** Situational Attributes -- attributes such as the real or perceived urgency surrounding the problem (from the organization's perspective), the magnitude or importance of the problem to the organization's livelihood, the types of decisions that will have to be made to address the problem(s), the costs associated with problem and solution identification, and how well or poorly a problem is structured will assist with determining the specific approach to problem solving and decision making that is appropriate in a given situation. ** Environmental Attributes -- attributes of the environment surrounding the problem, both external to the organization (legal, political, economic, stakeholders) and internal to the organization (organizational mission, objectives, culture, beliefs) will necessarily refine/restrict the specific approaches utilized for problem solving and decision making.

4 ** Styles of Managerial Problem Solving and Decision Making (Figure 7.7) ** One conceptual model, derived by Vroom, allows for the identification of several distinct styles/approaches to decision making and problem solving within an organizational context, and which of those styles are considered most "ideal" in specific situations based on the problem-related attributes defined above. (contingency model of problem solving-decision making). ** The problem related attributes that are considered in this contingencybased model of problem solving and decision making include the following: ** Importance of the quality of the decision ** The expertise of the decision-maker in the problem area ** The structure of the problem as defined ** Importance of worker acceptance of any decision(s) made ** The probability of worker acceptance of unilateral decisions ** The degree of worker motivation to solve the problem at hand ** The presence of worker conflict with respect to any identified alternative solutions. ** Based on the answers to the above questions in specific scenarios, Vroom identified five distinct problem solving-decision making styles and which is preferable in which situations: (1) Autocratic style (AI and AII) -- unilateral (AI) approach to problem solving and decision making. No request for input or assistance at any stage of the problem solving process. Considered most ideal in situations where the problem(s) is fairly well structured, the need for quality or worker acceptance of decision(s) is fairly small, and/or where workers will not likely be significantly adversely affected by any decisions made. A variation (AII) of the classical autocratic approach allows for some worker input into the process, especially as it relates to problem identification/definition. (2) Consultative style (CI and CII) -- approach to problem solving and decision making where managers allow for more worker input into the process, but where managers still retain the authority and responsibility for making the decision that they think is ideal. Such consultations may be more (CII) or less (CI) formal and may involve larger groups (CII) or individuals (CI) in the consultative process. Most ideal approach in situations where worker acceptance of decisions is critical to implementation but where unilateral decisions will likely be accepted by subordinates. The choice of consultative approach depends largely upon the need for group consensus (or not) when decisions are ultimately made.

5 (2) Group-involvement style (GII) -- style of problem solving and decision making where workers are involved in all phases of the process, from problem analysis to solution identification and formulation to actual solution selection and implementation. Most ideal approach in situations where worker acceptance is critical to implementation & unilateral decisions are unlikely to be accepted.