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Introduction

Sometimes it happens

On 15 December 1992 John Akers, IBM'S chairman, announced that the company would cut 25 000 more jobs in 1993 on top of the 40 000 axed in 1992. Manufacturing capacity would be cut in chips, mainframe computers and large disk drives, that is, in all core businesses. R &D and capital budgets would be chopped by $1 billion each. Akers gave warning that IBM might have to abandon two long-cherished policies: no compulsory redundancies, and no dividend cuts.

'Hardware and tear' (1992, 19 December). Business section. The Economist , page 5.

John Akers, like all managers, makes many decisions - some small, some large. It can be generally argued that decision making is the very essence of a manager's job and is perhaps the key function of management. Every day starts with a decision. Once you get to work you are required to make decisions that, depending to your job, can have a significant effect on your organisation and the lives of all those associated with the organisation.

The ability to make good decisions is central to the management of the organisation, the management of your department and the management of personnel. Not every decision that is made is going to be vital, but the number that are will be sufficient to make it necessary to have a framework to optimise the process of making decisions.

Factors that affect organisations may not always be immediately visible and may arise from activities of competitors, customers and suppliers. (Remember from Chapter 2 that you should be monitoring the external environment).

Even with intelligent software and computer calculations, managers need to make decisions. Therefore, it is vital to understand the tools and techniques that assist the manager in making effective and efficient decisions. The purpose of this chapter is to introduce the areas of managerial decision making and the types of decisions that managers make. Included are the elements and steps in the effective decision making process . We also cover some of the barriers to effective problem solving and techniques for improvement.

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