Management decisions directly affect the performance of labor, production or management. Based on these indicators, it is possible to assess how correct this or that decision made by the manager was.
What criteria affect the assessment of effectiveness
Making a managerial decision is an intermediate stage between the decision itself and the impact, i.e. implementation of this decision. Its effectiveness is evaluated together with the effectiveness of the solution development and its implementation.
The exact formula for calculating efficiency is rather complicated, it takes into account more than sixty economic indicators. Profitability, labor productivity, return on financial investments, the ratio of the growth rate of average wages and labor productivity, turnover of funds - these are the most important of them.
Efficiency can be assessed both from the point of view of the work of the management apparatus of the organization as a whole, and from the point of view of a separate decision. The main criterion for such an assessment is the ratio of the costs of organizational and technical measures carried out as a result of the decision-making and the results obtained, that is, profit.
To reliably assess the effectiveness of the management apparatus, it is necessary to keep separate records of the organization's income and expenses for each product group. In practice, such accounting is difficult to perform, therefore the analysis of efficiency is carried out on the basis of more general indicators: an increase in the volume and speed of goods turnover, a decrease in the amount of stocks of goods allow us to draw correct conclusions. After all, the goal of any management decision is to minimize costs and increase the revenues of the organization.
What allows you to evaluate the analysis of effectiveness
For an adequate assessment of the effectiveness of management decisions, economic and mathematical methods are used that allow you to look at the current tasks of the enterprise from the practical side. It becomes possible to develop a production plan and evaluate its possible benefits. Efficiency analysis may indicate the need to redistribute and optimize the production program, equipment, resources. It may be necessary to revise existing standards, establish a new range of manufactured goods, rationalize transport routes, assess the technical condition of equipment and possible losses.
Thus, the efficiency of the enterprise as a whole depends on the management decisions taken. Therefore, it is very important for a manager to have the necessary theoretical knowledge and practical skills in the development and implementation of management decisions that are effective for each specific enterprise.
