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Magradze Tengiz
Doctor of Philosophy (phd) in power and electrical engineering Georgian technical University, Tbilisi, Georgia DOI: 10.24411/2520- 6990-2020-11560 NEW METHODOLOGY OF EVALUATING THE EFFICIENCY OF MANAGERIAL DECISION-
MAKING
Маградзе Тенгиз
Академический степень доктора философии по энергетике и электроинженерии
Грузинский технический университет, Тбилиси, Грузия
НОВАЯ МЕТОДИКА ОЦЕНКИ ЭФФЕКТИВНОСТИ ПРИНЯТИЯ УПРАВЛЕНЧЕСКИХ
РЕШЕНИЙ
Abstract
Relevance. Assessment of the effectiveness of managerial decision making directly affects the functioning of the organization as a whole. As long as the organization maintains a hierarchical structure, where some elements have a controlling influence on others, it is necessary to study the decision-making methodology and evaluate their effectiveness. One of the most effective theoretical tools is SWOT analysis.
Goals. Implementation of the practice of evaluating the effectiveness of managerial decisions in all organizational structures based on SWOT analysis.
Literature review and methodology. In the process of studying the problem posed, we analyzed important works in the field of management theory. Among them are the works of A.I. Afonichkin, D.G. Mikhalenko, K.V. Baldin and S.N. Vorobyev
Аннотация
Актуальность. Оценка эффективности принятия управленческих решений напрямую влияет на функционирование организации в целом. До тех пор, пока организация сохраняет иерархическую структуру, где одни элементы оказывают управляющее влияние на другие, необходимо изучать методологию принятия решений и оценивать их эффективность. Одним из наиболее эффективных теоретических инструментов является SWOT-анализ.
Цели. Внедрение практики оценки эффективности управленческих решений во все организационные структуры на основе SWOT-анализа.
Обзор литературы и методология. В процессе исследования поставленной проблемы нами были проанализированы отечественные труды в области теории управления. Среди них труды Афоничкина А. И., Михаленко Д. Г., Балдина К. В. и Воробьева С. Н.
Keywords: management, evaluation, decision, SWOT analysis, Matrix method
Ключевые слова: управление, оценка, решение, SWOT-анализ, матричный анализ
Main part. The need to evaluate management decisions arises from the responsibility that rests with the management apparatus. The effectiveness of the work of the whole organization depends on the quality of their decisions; therefore it is important to talk about an objective assessment of the development of the decision, the process of its adoption, the quality of the decision itself, its implementation and monitoring.
Assessing the effectiveness of a solution comes down to a deep analysis at the stage of developing a solution [12]. The research work is aimed at developing several prototypes of the solution, assessing the disadvantages and advantages, strengths and weaknesses of each, and then low-quality, unreasonable and ineffective solutions are eliminated.
All of the above is taken into account equally in the two methods for identifying evaluations of the effectiveness of decisions. These include theoretical or a priori, as well as actual or a posteriori.
Based on the theoretical method, alternatives are put forward, from which the best are chosen. For this, we suggest using SWOT analysis. This is not a new tool familiar to anti-crisis managers and marketers, but which is not described as a mechanism for evaluating
the adoption of objective and effective decisions. We consider it as an effective method for evaluating any decision. A detailed diagram makes it possible to take into account everything: the influence of the external environment, the resistance of the internal environment and performers, as well as to monitor the implementation.
We also attribute the matrix method to new methods of theoretical assessment, which consists in the simultaneous evaluation of several solutions according to given parameters.
The actual evaluation method is used to complete the implementation of the decision, when you can talk about the results [14]. There are several criteria for evaluating the effectiveness of management decisions by the actual method:
• target;
• costly;
• strategic;
• tactical.
The target criterion shows how well the organization has achieved its goals. The costly estimates the ratio of the cost of resources spent and the result. Strategic and tactical criteria are directly related to the first
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two. The strategy involves the adoption of short-term, medium-term and long-term goals, the measure of achievement of which is assessed by the target method.
The tactical criterion is used to select the most successful technological solution, which will save resources on production. This is an associated tactical criterion with a costly one [13].
To give a correct assessment of the effectiveness of management decisions, it is necessary to take into account the specifics of the organization, because each business has its own types of decisions. Accordingly, the types of effectiveness are also different:
• organizational effectiveness;
• economic efficiency;
• social efficiency;
• technological efficiency;
• legal effectiveness;
• ecological effectiveness;
Accordingly, decisions can be organizational, economic, social, technological, legal and environmental. For a competent assessment of each decision, it is recommended to characterize each of the items listed.
Organizational efficiency implies that a certain goal of an organization or its structural part was achieved due to lesser efforts [12]. That is, fewer employees were involved, less time was spent, etc. At the same time, economic indicators are not taken into account. Under organizational effectiveness, we can consider the issue of employee motivation.
It is believed that organizational achievements with high efficiency are associated with improving the working conditions of workers and reaching a new level of functional organization or department (which may have material manifestations). For example, the expression of efficiency can be called the optimization of the organization structure, the reorganization of the managerial body, improving safety, improving working conditions, creating new departments, creating an HR department and motivating staff, reorganizing the number of employees, creating new rules, etc.
It is believed that if an organizational decision led to one of the above results, then it was effective.
The solution can be considered cost-effective when the cost of the surplus product is higher than the cost of its implementation. This takes into account the individual goals of the organization. Economic decisions are associated not only with the sale and production of goods and services, but also with the following issues: profit, costs (their optimization or reduction), crisis and stagnation (crisis management methods), lending and the implementation of other financial needs of the company.
Goals can be social in nature and in order to evaluate effectiveness from this point of view, it is necessary to consider efficiency as a result of achieving social goals [5]. Social goals can be understood as those that are aimed for the good of society, as well as employee-oriented organizations. The social sphere is connected with providing conditions for self-expression, rest, communication. The company is considered effective in this aspect when it interacts with
consumers and satisfies the demand of the population for goods and services. For example, makes a social product, reduces cost, provides affordable jobs. It is also important to reduce staff turnover, develop an organizational culture, create a pleasant microclimate in the team.
To evaluate technological effectiveness, it is necessary to correlate the technologies in the organization with the corresponding achievements at the industry, national or world production level. A detailed description and the best results can be obtained after analysis of direct competitors. A solution is considered effective from the point of view of technology if it leads to a decrease in the complexity and monotony of work, and reduction of time and labor costs in production. An expression may be financial indicators [5]. A positive step in technological efficiency is the reorganization of production with the aim of introducing modern equipment and technologies. The quality of goods, labor and services is growing, as well as their competitiveness in the market.
Legal effectiveness is associated with the degree of achievement of legal goals while reducing the finances involved, persons and time. Legal goals include ensuring security, order, legal and social security, and compliance with labor law requirements. Successes in this direction are expressed through reduction of fines, work in the legal field of the state, order in tax deductions, protection of employees from administrative offenses.
Ecological effectiveness is the result of achieving the organization's goals in the field of ecology. Mainly related to the protection of the environment and public health, employees. The organization is obliged to reduce the degree of negative impact on nature, as well as to increase the level of safety of its products [5].
All of the above factors make it possible to visually evaluate the effectiveness of the solution from the actual point of view, that is, focusing on the result after implementation. But there are ways that allow us to evaluate the effectiveness "before," for example, this applies to the development and implementation of management decisions.
To evaluate the development of solutions are used qualitative and quantitative assessment options [5].
There are quality score criteria:
• timeliness;
• validity (both current argumentation and scientific validity are taken into account);
• how many solution options are provided;
• what technical means were used in the development process;
• what experience (foreign or domestic) the developers focused on.
Quantitative assessment is often biased, since the development of a solution requires a creative approach and innovative thinking, which is difficult to express using the numbers needed for quantitative analysis. In addition, management is primarily about the relationship between people (manager and performers, several performers among themselves), which is accompanied
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by social and psychological manifestations. They are also not amenable to rationing and accounting. With the help of quantitative characteristics, it is almost impossible to display the interaction of workers. Quantitative characteristics may not be used during the SWOT analysis [9].
Instead of them, you can evaluate the objective indicators inherent in planning:
• number of performers,
• speed of implementation, deadlines;
• the number of working hours that will be spent on work;
• estimated economic consequences.
It is useful to take these points into account in a SWOT analysis in order to execute a decision sequentially, on time, without exceeding the budget and labor costs.
The paradox of evaluating the effectiveness of management decisions is that implementation is often more difficult than adoption [8]. Therefore, a less effective solution at the development stage may be better due to simple implementation. To predict such a development of events, theoretical methods for evaluating options are used, one of which is SWOT analysis.
An equally important role is assigned to the analysis of the external and internal environment.
There are environmental factors by the method of T.E.M.P.L.E.S .:
• technology;
• economics;
• market;
• policy;
• legislation;
• environment;
• society.
The environmental factors are the following:
• competence, recognition, qualifications of the person who made the decision;
• degree of managerial awareness;
• degree of collegiality in the process of developing a solution;
• how much the execution of the decision is controlled;
• degree of participation of decision makers in the process of its implementation;
Having analyzed the possible options, we select A1 as the most promising. Next, we proceed to the SWOT analysis.
Stage 2. SWOT analysis for option A1 according to the standard scheme: strengths and weaknesses, threats and advantages.
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• motivation of performers;
• qualification of performers;
• completeness of information available to performers;
• the degree of responsibility of managers for the results of the decision.
It is important to consider the degree of resistance of the external and internal environment.
Despite the fact that there are a lot of points for the analysis of each solution option in the theoretical method for evaluating effectiveness, the practical implementation is simple due to the SWOT analysis. As an analogue, it can use the matrix method.
Suppose there are n number of prototype solutions. Everyone needs to be evaluated on the parameters that we have already indicated in the article (external and internal environment, all areas of effectiveness, etc.). To do this, a plan is drawn up with control questions, and the answers will be recorded in a table where each area is reserved for a specific solution.
Further, when the manager chooses one or two of the many solutions, it is recommended to do a SWOT analysis to assess the strengths and weaknesses, threats and opportunities for making such a decision.
The field for SWOT analysis is four equal squares, in each of which it is necessary to write:
• strengths;
• weaknesses;
• opportunities and threats
The methodological recommendations indicate that for effective analysis it is necessary to specify a minimum of 100 points in each and four fields [7].
For an effective assessment, we propose combining the matrix and SWOT analysis methods. This will allow you to consider many solutions and choose the best among them.
Description of the stages of assessment.
Stage 1. The matrix method. The task at this stage is to leave 1-3 among the many solutions. Prototypes of solutions are developed in any way, after which they are analyzed using a table. A - these are solutions, and B - these are control questions. It is understood that the assessment team will itself recreate a list that will meet the individual needs of the company.
Table №1
Advantages of phased analysis using a matrix and SWOT analysis:
• Speed: there is no need to do complex SWOT analysis for each option. Ineffective methods are screened out using a matrix, and SWOT analysis is done only for 1-2 prototypes.
Control questions A1 A2 A3 A4
B1: deadline 1 2 1 3
B2: the number of employees 1 1 3 1
B3: do I need additional finance yes yes yes yes
B4: what environmental factors affect efficiency actions of competitors public reaction economic situation economic situation
B5: what factors of the internal environment affect efficiency qualification of performers qualification of performers qualification of performers qualification of performers
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• The list of control questions is compiled by the control group or the manager himself.
• Ability to adjust the matrix to your individual needs.
• Only important arguments are included in the checklist.
• You can evaluate effectiveness without including quantitative indicators.
• Matrix and SWOT tables reflect subjective and objective characteristics.
• Unlike conventional SWOT analysis, it is possible to take into account not only factors of the internal and external environment, but also any others.
The advantage of this method is that it takes a minimum of time, can be implemented without the help of specialists, but exclusively by power of specialists. A detailed analysis of weaknesses and threats will help to avoid making deliberately ineffective decisions and eliminate unreasoned ideas at the decision-making stage.
Conclusions. Evaluation of the effectiveness of managerial decisions is necessary for the adequate development and functioning of the organization, achieving goals in all given areas: the organizational sphere, technological, industrial, economic, social, environmental and not only. Due to the preliminary analysis, all factors of the external and internal environment that can have an impact in the implementation of the solution are taken into account. The matrix method and SWOT analysis are necessary for the theoretical analysis of each solution option and the selection of the correct option among many analogues.
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